Emerging Europe Private Equity Fund III, L.P.

Headnote

Section 74 - order pursuant to section 74 of the Securities Act (Ontario) exempting thegeneral partners of the Fund from the registration requirement under clause 25(1)(c) ofthe Securities Act (Ontario)

Statutes Cited

Securities Act (Ontario) R.S.O. 1990, C.S.5, as am., ss.25(1)(c), 74.

Rules Cited

Ontario Securities Commission Proposed Rule 35-502 "Non-Resident Advisers" (2000)23 O.S.C.B 4393.

UPON the application (the "Application") of Emerging Europe Private EquityFund III, L.P. (the "Fund") to the Ontario Securities Commission (the "Commission") fora order pursuant to section 74 of the Act exempting the general partners of the Fund(the "General Partners") from the registration requirement under clause 25(1)(c) of theAct;

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

AND UPON the Fund having represented to the Commission as follows:

1. The Fund is a Cayman Islands exempted limited partnership whose objective isto achieve long-term capital appreciation through investments primarily in equityand equity-related securities of issuers based in or with significant operations inemerging European countries such as Poland, Hungary and the Czech Republic;

2. Each of the General Partners is a Cayman Islands exempted company;

3. The General Partners will be responsible for all aspects of operating andmanaging the Fund, including investment decisions, monitoring investments andadministrative activities.

4. Neither of the General Partners is registered as a dealer or adviser in Ontario;

5. The Fund is offering limited partnership interests in the Fund (the "Interests") toinvestors in the United States and internationally on a private placement basis.

6. The offering will be extended to investors in the provinces of Ontario, Québec,British Columbia, Alberta, Saskatchewan and Manitoba (the "Private PlacementProvinces");

7. It is anticipated that fewer than 10% of the Interests will be offered or sold topurchasers in the Private Placement Provinces;

8. The Fund will engage a fully-registered dealer, CIBC World Markets Inc. (the"Canadian Placement Agent"), as its exclusive agent with respect to offers andsales of the Interests in the Private Placement Provinces.

9. The Canadian Placement Agent is an affiliate of one of the General Partners,CIBC Emerging Europe Ventures;

10. The confidential private placement memorandum used by the Fund inconnection with the offering of the Interests in the Private Placement Provincesincludes notification in bold face type of the relationship between the CanadianPlacement Agent and one of the General Partners, and disclosure regarding thepotential for conflicts of interest between the General Partners and their affiliatesand the Fund.

11. Although the Interests are being offered primarily abroad and are only beingdistributed in Ontario through a registered dealer on a private placement basis,the General Partners are unable to rely on an exemption from the registrationrequirement under clause 25(1)(c) of the Act and paragraph 3 of Part II of theInternational Adviser Rule, because the Canadian Placement Agent is anaffiliate of a principal distributor or manager of the Fund.

12. The Commission has published a proposed rule (Rule 35-502 - InternationalAdvisers) (the "Proposed Rule") which would supercede the InternationalAdviser Rule.

13. The Proposed Rule would maintain the existing registration exemption foradvisers of privately placed investment funds which are offered primarily abroad,but would remove the requirement that the registered dealer offering thesecurities in Ontario be independent of the investment fund.

14. If the Proposed Rule were in force, the offering of the Interests would meet theconditions set forth in section 7.10 of the Proposed Rule and the GeneralPartners would have an available exemption from the adviser registrationrequirement under Ontario securities law.

AND UPON the Commission being satisfied that to do so would not beprejudicial to the public interest;

IT IS ORDERED, pursuant to section 74 of the Act, that the General Partners areexempt from the requirements of clause 25(1)(c) of the Act in respect of advising theFund provided that the securities of the Fund are

(a) primarily offered outside of Canada;

(b) only distributed in Ontario through one or more registrants; and

(c) distributed in Ontario in reliance upon an exemption from the prospectusrequirements of the Act.

September 12^th, 2000.

"J. A. Geller"      "K. D. Adams"