CFG Commodity Management, Inc. & Trilogy Capital Management LLC - ss. 38(1) of CFA

Order

IN THE MATTER OF THE

COMMODITY FUTURES ACT, R.S.O. 1990 c. 20

AND

IN THE MATTER OF

CFG COMMODITY MANAGEMENT, INC. and
TRILOGY CAPITAL MANAGEMENT LLC

ORDER

(Subsection 38(1))

UPON the application of CFG Commodity Management Ltd. ("CFG") and Trilogy Capital Management LLC ("Trilogy") (jointly the "Applicants") to the Ontario Securities Commission (the "Commission") for a ruling under subsection 38(1) of the Commodity Futures Act, R.S.O. 1990, c.20 (the "CFA") that the Applicants and its officers, partners and directors are not subject to the requirement of paragraph 22(1)(b) of the CFA;

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

AND UPON the Applicants having represented to the Commission that:

1. CFG is a corporation organized under the laws of the Province of Manitoba and is resident in Manitoba. CFG does not have an address in Ontario.

2. CFG is the General Partner of the BFI Commodity Fund Limited Partnership (the "Fund"), a Manitoba limited partnership intending to offer Limited Partnership Units in Ontario pursuant to a prospectus which has been filed in British Columbia, Manitoba, Ontario and Nova Scotia, with Manitoba as its principal jurisdiction pursuant to National Policy 43-201. The Fund does not have an address in Ontario. The Fund intends to hold a portfolio of commodities acquired through commodities futures exchanges in the United States so as to follow a recognized commodities index, the Barclay Futures Index.

3. CFG is currently registered under The Commodity Futures Act of Manitoba (the "CFA (Manitoba)") as an Advisor restricted to providing advice to the Fund and is entitled in that regard to provide discretionary portfolio management services to the Fund. CFG will provide all such advice outside Ontario.

4. Trilogy is incorporated under the laws of Delaware and is resident in New Jersey. Trilogy is a registered commodity pool operator and commodity trading advisor registered with the Commodity Futures Trading Commission under the U.S. Commodity Exchange Act, is a member of the National Futures Association and is a registered investment advisor under the United States Investment Advisors Act of 1940, which permits Trilogy to advise in respect of future and forward contracts and options on futures and forward contracts in the United States. All advice given by Trilogy will be given outside Ontario. The obligations and duties of Trilogy are set out in a written agreement between CFG and Trilogy.

5. CFG has entered into an investment sub-advisory agreement with Trilogy, whereby CFG is to act as the portfolio adviser to the Fund and Trilogy is to act as the sub-adviser to CFG, in respect of purchases and sales of commodity futures contracts traded on commodity futures exchanges in the United States and cleared through acceptable clearing corporations (collectively the "Proposed Advisory Services"), all as disclosed in the Prospectus.


6. CFG has contractually agreed with the Fund to be responsible for any loss that arises out of the failure of Trilogy to (i) exercise the powers and discharge the duties of its office honestly, in good faith and in the best interests of the Fund and (ii) exercise the degree of care, diligence and skill that a reasonably prudent person would exercise in the circumstances (the "Standard of Care") and that this responsibility cannot be waived.

7. Trilogy will only provide advice to CFG in connection with the Fund, the offering documents for which disclose (i) that CFG is responsible for any loss that arises out of the failure of Trilogy to meet the Standard of Care in providing advice to the Fund, (ii) the difficulty in enforcing legal rights against Trilogy and (iii) that all or substantially all of Trilogy's assets are situated outside of Canada.

8. Both CFG and Trilogy would be exempt from registration under the mutual reliance principles of OSC Rule 35-502, were CFG registered as an adviser under The Securities Act (Manitoba) and were compliance under the Securities Act required, rather than CFG being registered under the CFA (Manitoba) and compliance with the CFA required.

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

IT IS ORDERED pursuant to subsection 38(1) that the Applicants, their officers, partners and directors are not subject to the requirements of paragraph 22(1) (b) of the CFA in respect of the Proposed Advisory Services provided that:

(a) the obligations and duties of Trilogy remain as set out in the written agreement with CFG;

(b) all advice is given outside Ontario and each of CFG, the Fund and Trilogy continues not to have an address in Ontario;

(C) CFG contractually agrees with the Fund to be responsible for any loss to the fund that arises out of the failure of Trilogy to meet the Standard of Care in providing advice to the fund and that this responsibility cannot be waived;

(d) the prospectus for the fund discloses that CFG is responsible for any loss that arises out of the failure of Trilogy to meet the Standard of Care in providing advice to the Fund, discloses that there may be difficulty enforcing any legal rights against Trilogy because it is resident outside Canada and discloses that all or a substantial portion of Trilogy's assets are situated outside Canada;

(f) CFG remains a registrant under the CFA (Manitoba), in a category which permits CFG to provide discretionary management services, so long as the Proposed Advisory Services are provided by CFG and Trilogy; and

(g) this order shall terminate three years from March 30, 2001.

March 30, 2001

J.A. Geller, K.D. Adams