Emerald Canadian Equity Fund et al. - MRRS Decision

MRRS Decision

IN THE MATTER OF

THE SECURITIES LEGISLATION OF
BRITISH COLUMBIA, ALBERTA, SASKATCHEWAN, ONTARIO, QUEBEC
NOVA SCOTIA AND NEWFOUNDLAND

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEW SYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

EMERALD CANADIAN EQUITY FUND, TD CANADIAN INDEX FUND, TD BALANCED FUND, TD BALANCEDGROWTH FUND, TD DIVIDEND INCOME FUND, TD DIVIDEND GROWTH FUND, TD CANADIAN EQUITY FUND,TD CANADIAN BLUE CHIP EQUITY FUND, TD CANADIAN VALUE FUND, TD CANADIAN STOCK FUND, CTPRIVATE CANADIAN DIVIDEND FUND, CT PRIVATE CANADIAN EQUITY/GROWTH FUND, CT PRIVATECANADIAN EQUITY/INCOME FUND, CT PRIVATE NORTH AMERICAN EQUITY/GROWTH FUND, CT PRIVATENORTH AMERICAN EQUITY/INCOME FUND, EMERALD CANADIAN LARGE CAP POOLED FUND TRUST,EMERALD CANADIAN SMALL CAP POOLED FUND TRUST, EMERALD CANADIAN MID CAP POOLED FUNDTRUST, EMERALD CANADIAN 300 POOLED FUND TRUST, EMERALD ENHANCED CANADIAN EQUITYPOOLED FUND TRUST, EMERALD CANADIAN EQUITY 300 POOLED FUND TRUST II, EMERALD CANADIAN300 CAPPED POOLED FUND TRUST, EMERALD CANADIAN EQUITY 299 POOLED FUND TRUST, ANDEMERALD ENHANCED CANADIAN 300 POOLED FUND TRUST (COLLECTIVELY, THE "FUNDS")

MRRS DECISION DOCUMENT

WHEREAS the local securities regulatory authority or regulator (the "Decision Maker") in each of the provincesof British Columbia, Alberta, Saskatchewan, Ontario, Quebec, Nova Scotia and Newfoundland, (the "Jurisdictions") hasreceived an application (the "Application") from TD Asset Management Inc. ("TDAM"), on behalf of the Funds, for adecision pursuant to the securities legislation of the Jurisdictions (the "Legislation") that the provisions in the Legislationthat prohibit a mutual fund from investing in or holding an investment in an issuer in which any person or company whois a substantial security holder of the management company or the distribution company of the mutual fund has asignificant interest or, in Quebec, in securities that a registered person or an affiliate of a registered person owns or isunderwriting (the "Applicable Requirements") shall not apply in respect of an investment by the Funds in securities issuedby TD TSE 300 Index Fund or TD TSE 300 Capped Index Fund (the "ETFs");

AND WHEREAS pursuant to the Mutual Reliance Review System for Exemptive Relief Applications (the"System"), the Ontario Securities Commission is the principal regulator for the Application;

AND WHEREAS it has been represented to the Decision Maker that:

1. Each of the Funds is a "mutual fund in Ontario", within the meaning of section 1(l) of the Securities Act Ontario(the "Act"), either because it is organized under the laws of Ontario or because it is a "reporting issuer", withinthe meaning of the Act, and the Funds which are "reporting issuers", within the meaning of the Legislation ofa Jurisdiction, other than Ontario, are "mutual funds in" such Jurisdiction. The Funds which are "reportingissuers" are subject to National Instrument 81-102 ("NI 81-102").

2. TD Securities Inc. (the "Dealer"), an affiliate of TDAM, acts as an underwriter and a designated broker of theETFs in respect of the distributions (the "Offerings") of securities of the ETFs.

3. The ETFs are mutual funds that are listed and posted for trading on the Toronto Stock Exchange and each ofthe Offerings by the ETFs is or will be a continuous distribution of securities of the ETFs in the Jurisdictions.

4. Each of the ETFs is a mutual fund which is a "reporting issuer" in each of the Jurisdictions and which is subjectto NI 81-102.

5. The Dealer, in acting as an underwriter and a designated broker, will receive no compensation from the Funds,the ETFs or TDAM.

6. The investment by a Fund in an ETF will only be made if it is consistent with the investment objectives of theFund and, in the view of TDAM, is in the best interests of the Fund.

7. It is anticipated by TDAM that an investment by a Fund in an ETF will be made with cash balances which theFund holds either to fund redemptions or pending direct investment in other securities.

8. It is anticipated by TDAM that a Fund will generally invest between 0.50% and 3.00% of its net asset value inan ETF, but in no event will a Fund invest greater than 5.00% of its net asset value at the time of the investmentin securities of the ETFs.

9. A Fund will not knowingly make or hold an investment in an ETF if, at the time of such investment, the Fund,alone or together with other Funds, is a substantial security holder of the ETF.

10. The investment by a Fund which is subject to NI 81-102 in an ETF will be made in compliance with all of therequirements of NI 81-102 other than section 4.1(1) of NI 81-102, in respect of which relief has been received,and in compliance with all the requirements of the Legislation other than the Applicable Requirements.

11. The investment by a Fund which is not subject to NI 81-102 in an ETF will be made in compliance with all ofthe requirements applicable to "mutual funds in" each Jurisdiction, other than the Applicable Requirements.

12. The Dealer, in its capacity as underwriter and as a designated broker of an ETF, may own, from time to time,more than 10% of the outstanding units of an ETF.

13. The Toronto-Dominion Bank is a substantial security holder of both the Dealer and TDAM and would bedeemed to have a significant interest in the ETFs at any time when the Dealer is holding more than 10% of theoutstanding units of the ETFs.

14. In the absence of this decision, pursuant to the Legislation, the Funds are prohibited from investing in or holdingthe securities of an ETF at any time when the Dealer holds more than 10% or, in Quebec, any of theoutstanding units of the ETF.

15. The investment by a Fund in securities of an ETF represents the business judgment of responsible personsuninfluenced by considerations other than the best interests of the Fund.

AND WHEREAS pursuant to the System this MRRS Decision Document evidences the decision of eachDecision Maker (collectively, the "Decision");

AND WHEREAS each of the Decision Makers is satisfied that the test contained in the Legislation that providesthe Decision Maker with the jurisdiction to make the Decision has been met;

THE DECISION of the Decision Makers pursuant to the Legislation is that the Applicable Requirements shallnot apply so as to prevent a Fund from investing in securities issued by an ETF in respect of which the Dealer has asignificant interest or, in Quebec, is an owner or an underwriter;

PROVIDED IN EACH CASE THAT:

1. the Decision will terminate one year after the date hereof; and

2. the Decision shall only apply if at the time a Fund makes an investment in an ETF:

(a) the investment in the ETF is consistent with the investment objective of the Fund;

(b) the Dealer, in acting as underwriter and designated broker of the securities of the ETF, receives nocompensation from the Fund, the ETF or TDAM; and

(c) the investments by a Fund in both ETFs do not exceed 5.00% of the net asset value of the Fund.

April 24, 2001.

"Paul Moore" "Robert W. Davis"