BMO Nesbitt Burns Inc.

Decision

Headnote

NP 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions – Exemptive relief granted to permit a non-redeemable investment fund to invest in American non-redeemable investment funds, relief subject to certain conditions – National Instrument 81-102 Investment Funds.

Applicable Legislative Provisions

National Instrument 81-102 Investment Funds, ss. 2.5(2)(a.1), 2.5(2)(c.1), 19.1.

December 21, 2016

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO

(the “Jurisdiction”)

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

BMO NESBITT BURNS INC.

(the “Filer”)

DECISION

Background

The securities regulatory authority or regulator in the Jurisdiction (the “Decision Maker”) has received an application from the Filer for a decision under the securities legislation of the Jurisdiction (the “Legislation”) exempting the Fund (defined below) from paragraphs 2.5(2)(a.1) and (c.1) of National Instrument 81-102 Investment Funds (“NI 81-102”) to permit the Fund to purchase securities of certain investment funds in the United States (the “Exemption Sought”).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):

(a)           the Ontario Securities Commission is the principal regulator for this application; and

(b)           the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (“MI 11-102”) is intend-ed to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, Que-bec, New Brunswick, Newfoundland and Labrador, Nova Scotia, Prince Edward Island, Northwest Territories, Nunavut and Yukon.

Interpretation

Terms defined in National Instrument 14-101 Definitions or MI 11-102 have the same meaning if used in this decision, unless otherwise defined herein.

Representations

This decision is based on the following facts represented by the Filer:

1.             The Filer is planning to launch a new investment fund, tentatively called RiverNorth U.S. CEF Income Fund (the “Fund”). The Fund will be a non-redeemable investment fund governed by the laws of the province of Ontario pursuant to a trust declaration (the “Declaration of Trust”) to be dated on or about the date of the Fund’s final prospectus. The Filer will provide all administrative services required by the Fund.

2.             The Filer will be the manager of the Fund and RiverNorth Capital Management LLC (the “Portfolio Advisor”) will be the portfolio advisor of the Fund. The Filer is not in default of any of the requirements of securities legislation applicable to it.

3.             The Fund will be subject to NI 81-102, subject to any exemptions therefrom that have been or may be granted by securities regulatory authorities, and a reporting issuer under the laws of all of the provinces and territories of Canada.

4.             Subject to fulfilling all of the requirements of the Toronto Stock Exchange (the “TSX”), the Fund will list at least one class of its securities for trading on the TSX.

5.             The Portfolio Advisor will allocate the Fund’s assets primarily among closed-end funds and exchange-traded mutual funds in the United States (collectively, the “Underlying Funds”), and business development companies in the United States.

6.             The Underlying Funds will be subject to the continuous disclosure and other requirements applicable to investment funds of the Investment Company Act of 1940 (the “1940 Act”) in the United States.

7.             As with investing in United States publicly traded securities of individual companies, the Underlying Funds in the United States are highly regulated and subject to rigorous continuous disclosure obligations.

8.             The 1940 Act imposes a strict regulatory regime on the Underlying Funds that is as rigorous as the regulatory regime applicable to the Fund.

9.             The securities of the Underlying Funds invested in by the Fund will be exchange traded and will not be illiquid assets, as defined in NI 81-102.

10.          Absent the Exemption Sought, the Fund would be prohibited from investing in Underlying Funds because the Underlying Funds are not (i) subject to NI 81-102, or (ii) reporting issuers in any province or territory of Canada.

Decision

The Decision Maker is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.

The decision of the Decision Maker under the Legislation is that the Exemption Sought is granted provided that:

(a)           The Underlying Funds are public invest-ment funds subject to the continuous disclosure and other requirements of the 1940 Act.

(b)           The Fund’s investment in any one Underlying Fund does not exceed 10% of the Fund’s net asset value at the time of the investment.

(c)           Securities of the Underlying Funds are purchased on a stock exchange.

(d)           Other than with respect to paragraphs 2.5(2)(a.1) and (c.1), the Fund's invest-ment in an Underlying Fund complies with section 2.5 of NI 81-102.

“Darren McKall”

Manager,

Investment Funds and Structured Products Branch

Ontario Securities Commission