Baring Asset Management Limited - s. 80 of the CFA

Headnote

Subsection 80 of the Commodity Futures Act (Ontario) -- relief from the requirements of subsection 22(1)(b) of the CFA in respect of advising certain non-Canadian mutual funds related to commodity futures contracts and options traded on commodity futures exchanges outside Canada and cleared through clearing corporations outside Canada subject to certain terms and conditions.

IN THE MATTER OF

THE COMMODITY FUTURES ACT,

R.S.O. 1990, CHAPTER S.20, AS AMENDED

(THE CFA)

AND

IN THE MATTER OF

BARING ASSET MANAGEMENT LIMITED

ORDER

(Section 80 of the CFA)

UPON the application (the Application) of Baring Asset Management Limited (the Applicant) to the Ontario Securities Commission (the Commission) for an order pursuant to section 80 of the CFA that the Applicant and its directors, officers, partners, members and employees acting on its behalf as an adviser (collectively, the Representatives), be exempt, for a period of three years, from the registration requirements of clause 22(1)(b) of the CFA in respect of advising certain mutual funds, non-redeemable investment funds and similar investment vehicles (individually, a Fund and collectively, the Funds) established outside of Canada in respect of investments in investment vehicles that may invest in, commodity futures contracts and commodity futures options principally traded on commodity futures exchanges outside of Canada and cleared through clearing corporations outside of Canada, and, in certain cases, direct investments by the Funds in commodity futures contracts and commodity futures options principally traded on exchanges outside of Canada and cleared through clearing corporations outside of Canada, subject to certain terms and conditions;

AND UPON considering the Application and the recommendation of staff of the Commission;

AND UPON the Applicant having represented to the Commission that:

1. The Applicant is a company incorporated under the laws of England and authorized by and regulated in the conduct of its business in the United Kingdom by the Financial Services Authority of the United Kingdom. The Applicant may also include affiliates of, or entities organized by, the Applicant, which may provide advice to the Funds with respect to investments in commodity futures contracts and commodity futures options, who may subsequently execute and submit to the Commission a verification certificate confirming the truth and accuracy of the information set out in this Order with respect to that particular Applicant.

2. The Applicant is, or in the future may be, the investment manager and/or the investment advisor for the Funds. As the investment manager and/or the investment advisor for the Funds, the Applicant will be responsible for the day-to-day investment management of the Funds and/or the investment advice provided to the Funds.

3. The Funds advised by the Applicant are or will be established outside of Canada. Securities of the Funds are or will be primarily offered outside of Canada to institutional investors and high net worth investors. The Funds are or will be offered only to Ontario residents who qualify as an "accredited investor" under OSC Rule 45-501 Exempt Distributions or will be offered and distributed in Ontario only in reliance upon an exemption from the prospectus requirements of the Securities Act (Ontario) (the OSA) and an exemption from the adviser registration requirement of the OSA under section 7.10 of OSC Rule 35-502 Non-Resident Advisers (Rule 35-502).

4. The Funds as part of their investment mandate may invest in other offshore investment funds that are also established outside of Canada (individually, an Underlying Fund and collectively, the Underlying Funds).

5. Certain of the Underlying Funds may invest in commodity futures contracts and commodity futures options that are principally traded on exchanges outside of Canada and cleared through clearing corporations outside of Canada.

6. Certain of the Funds advised by the Applicant may also invest in commodity futures contracts and commodity futures options that are principally traded on exchanges outside of Canada and cleared through clearing corporations outside of Canada.

7. The Underlying Funds in which the Funds may from time to time invest are, or will be, managed by certain third party managers outside of Canada (the Managers) that are investing, or will invest, in investments selected by the Managers that may include commodity futures contracts and commodity futures options.

8. The Applicant has selected, or will select, the Underlying Funds in which the Funds have invested, or will invest, based on the investment strategies implemented by the Manager of the relevant Underlying Fund and the respective investment objectives and policies of the Fund that has invested, or will invest, in the Underlying Fund. The investment strategies implemented by the Managers may include investing in commodity futures contracts and commodity futures options.

9. By selecting an Underlying Fund based upon the Underlying Fund's investment strategy, where such strategy specifically involves investing in commodity futures contracts and commodity futures options, and by advising the Funds directly on investing in commodity futures contracts and commodity futures options, the Applicant currently provides, or will in the future provide, advice with respect to commodity futures contracts and commodity futures options to the Funds.

10. The Applicant and the Managers, where required, are or will be registered or licensed or are or will be entitled to rely on appropriate exemptions from such registrations or licences to provide advice to the Funds and the Underlying Funds, respectively, pursuant to the applicable legislation of its principal jurisdiction. In particular:

a. the Applicant is not registered in any capacity under the CFA or the OSA;

b. the Funds and the Underlying Funds currently, or in the future will, issue securities that are offered primarily outside of Canada. None of the Funds or the Underlying Funds is or has any current intention of becoming a reporting issuer in Ontario or in any other Canadian jurisdiction; and

c. the Funds and the Underlying Funds may, as part of their investment program invest in futures and options contracts principally traded on exchanges outside of Canada and cleared through clearing corporations located outside of Canada.

11. Prospective investors who are Ontario residents will receive disclosure that includes (i) a statement that there may be difficulty in enforcing legal rights against the Funds (or any of the Underlying Funds) and or the Applicant advising the relevant Funds (or the Manager advising the relevant Underlying Funds), because such entities are resident outside of Canada and as all or substantially all of their assets are situated outside of Canada; and (ii) a statement that the Applicant advising the applicable Funds (or the Manager advising the applicable Underlying Funds) is not registered with or licensed by any securities regulatory authority in Canada and, accordingly, the protections available to clients of a registered adviser will not be available to purchasers of securities of the Funds.

AND UPON being satisfied that it would not be prejudicial to the public interest for the Commission to grant the exemption requested on the basis of the terms and conditions proposed;

IT IS ORDERED pursuant to section 80 of the CFA that the Applicant and its Representatives are not subject to the requirements of clause 22(1)(b) of the CFA in respect of their advisory activities in connection with the Funds, for a period of three years, provided that:

(a) any such Applicant, where required, is or will be registered or licensed or is or will be entitled to rely on appropriate exemptions from such registrations or licences to provide advice to the Funds pursuant to the applicable legislation of its principal jurisdiction;

(b) the Funds and the Underlying Funds invest, or may in the future invest, in commodity futures and options contracts principally traded on organized exchanges outside of Canada and cleared through clearing corporations located outside of Canada;

(c) securities of the Funds and the Underlying Funds are and will be offered primarily outside of Canada and securities of the Funds will only be distributed in Ontario through one or more registrants under the OSA in reliance on an exemption from the prospectus requirements of the OSA and upon an exemption from the adviser registration requirement of the OSA under section 7.10 of Rule 35-502;

(d) prospective investors who are Ontario residents will receive disclosure that includes (i) a statement that there may be difficulty enforcing legal rights against the applicable Funds (or any of the Underlying Funds) or the Applicant advising the relevant Funds (or the Manager advising the relevant Underlying Funds), because they are resident outside of Canada and as all or substantially all of their assets are situated outside of Canada; and (ii) a statement that the Applicant advising the applicable Funds (or the Manager advising the applicable Underlying Fund) is not registered with or licensed by any securities regulatory authority in Canada and, accordingly, the protections available to clients of a registered adviser will not be available to purchasers of securities of a Fund; and

(e) any Applicant whose name does not specifically appear in this Order and who proposes to rely on the exemption granted under this Order, shall as a condition to relying upon such exemption, have executed and filed with the Commission a verification certificate referencing this Order and confirming the truth and accuracy of the Application with respect to that particular Applicant.

November 26, 2004.