Fidelity Investments Canada Limited - Decision

Headnote

Section 5.1 of O.S.C. Rule 31-506 ­ SRO Membership ­ Mutual Fund Dealers ­ mutual fund manager exempted fromthe requirements of the Rule that it be a member of the Mutual Fund Dealers Association ("MFDA") and file with theMFDA an application and prescribed fees for the application for membership, provided that it complies with terms andconditions of registration and provided that it transfers trading activity with respect to group retirement clients to itsaffiliate, which will be registered as a mutual fund dealer and member of the MFDA.

Statutes Cited

Securities Act, R.S.O. 1990, c. S.5, as am.

Rules Cited

O.S.C. Rule 31-506 SRO Membership ­ Mutual Fund Dealers, ss. 2.1, 3.1, 5.1

Published Documents Cited

Letter Sent to The Investment Funds Institute of Canada and the Investment Counsel Association of Canada, December6, 2000, (2000) 23 OSCB 8467.

IN THE MATTER OF

THE SECURITIES ACT

R.S.O. 1990, CHAPTER S.5, AS AMENDED (the "Act")

AND

ONTARIO SECURITIES COMMISSION RULE 31-506 SRO MEMBERSHIP

­ MUTUAL FUND DEALERS (the "Rule")

AND

IN THE MATTER OF

FIDELITY INVESTMENTS CANADA LIMITED

AND FIDELITY RETIREMENT SERVICES COMPANY OF CANADA LIMITED

DECISION

(Section 5.1 of the Rule)

UPON The Director having received an application (the "Application) from Fidelity Investments Canada Limited(the "Registrant") for a decision, pursuant to section 5.1 of the Rule, exempting the Registrant from the requirementsin sections 2.1 and 3.1 of the Rule, which would otherwise require that the Registrant be a member of the Mutual FundDealers Association (the "MFDA") on and after July 2, 2002, and file with the MFDA, no later than May 23, 2001, anapplication and corresponding fees for membership;

UPON considering the Application and the recommendation of staff of the Ontario Securities Commission;

AND UPON the Registrant having represented to the Director that:

1. the Registrant is registered under the Act as a dealer in the category of mutual fund dealer and as an adviserin the categories of "investment counsel" and "portfolio manager";

2. the Registrant is the manager of a number of mutual funds that it has established and will be the manager ofother mutual funds it expects to establish in the future;

3. the securities of the mutual funds managed by the Registrant are generally sold to the public through otherregistered dealers;

4. currently, the Registrant sells securities of mutual funds that it manages to certain participants ("GroupRetirement Clients") in employer sponsored plans, which include: registered pension plans, deferred profitsharing plans, registered retirement savings plans, registered retirement income funds, registered educationsavings plans, other deferred income plans registered under the Income Tax Act (Canada) and other savingsplans;

5. Fidelity Retirement Services Company of Canada Limited (the "Registrant's Affiliate"), a wholly-ownedsubsidiary of the Registrant, has applied for registration under the Act as a mutual fund dealer and intends toobtain membership in the MFDA;

6. it is proposed that, after the Registrant's Affiliate is registered as a mutual fund dealer and is a member of theMFDA, the trading activity of the Registrant referred to in paragraph 4, above, will be transferred to andconducted by the Registrant's Affiliate;

7. the Registrant has requested that its registration as a mutual fund dealer permit it to continue to carry on thetrading activities referred to in paragraph 4, above, until July 2, 2002, without applying for membership in theMFDA, so as to ensure that the Group Retirement Clients are appropriately serviced pending the proposedtransfer of this trading activity to the Registrant's Affiliate after it becomes an MFDA member;

8. the Registrant's trading activities as a mutual fund dealer currently represent and will continue to representactivities that are incidental to its principal business activities;

9. the Registrant has agreed to the imposition of the terms and conditions on the Registrant's registration as amutual fund dealer set out in the attached Schedule "A", which outlines the activities the Registrant has agreedto adhere to in connection with its application for this Decision;

10. any person or company that is not currently a client of the Registrant on the effective date of this Decision, will,before they are accepted as a client of the Registrant, receive written notice from the Registrant that:

The Registrant is not currently a member, and does not intend to become a member of the MutualFund Dealers Association; consequently, clients of the Registrant will not have available to theminvestor protection benefits that would otherwise derive from membership of the Registrant in theMFDA;

11. upon the next general mailing to its account holders and in any event before May 23, 2002, the Registrant shallprovide, to any client that was a client of the Registrant on the effective date of this Decision, the written noticereferred to in paragraph 10, above;

AND UPON the Director being satisfied that to do so would not be prejudicial to the public interest;

IT IS THE DECISION of the Director, pursuant to section 5.1 of the Rule, that, effective May 23, 2001, theRegistrant is exempt from the requirements in sections 2.1 and 3.1 of the Rule;

PROVIDED THAT:

The Registrant complies with the terms and conditions on its registration under the Act as a mutual fund dealer set outin the attached Schedule "A".

"May 23, 2001"

"William R. Gazzard"

Schedule "A"

TERMS AND CONDITIONS OF REGISTRATION

OF

FIDELITY INVESTMENTS CANADA LIMITED

AS A MUTUAL FUND DEALER

Definitions

1. For the purposes hereof, unless the context otherwise requires:

(a) "Act" means the Securities Act, R.S.O. 1990, c. S.5, as amended;

(b) "Adviser" means an adviser as defined in subsection 1(1) of the Act;

(c) "Client Name Trade" means, for the Registrant, a trade to, or on behalf of, a person or company, insecurities of a mutual fund, that is managed by the Registrant or an affiliate of the Registrant,where the person or company is shown on the records of the mutual fund or of an other mutualfund managed by the Registrant or an affiliate of the Registrant as the holder of securities of suchmutual fund, and the trade consists of:

(A) a purchase, by the person or company, through the Registrant, of securities of the mutualfund; or

(B) a redemption, by the person or company, through the Registrant, of securities of themutual fund;

and where, the person or company is either a client of the Registrant that was not solicited by theRegistrant or was an existing client of the Registrant on the Effective Date;

(d) "Commission" means the Ontario Securities Commission;

(e) "Effective Date" means May 23, 2001;

(f) "Employee", for the Registrant, means:

(A) an employee of the Registrant;

(B) an employee of an affiliated entity of the Registrant; or

(C) an individual that is engaged to provide, on a bona fide basis, consulting, technical,management or other services to the Registrant or to an affiliated entity of the Registrant,under a written contract between the Registrant or the affiliated entity and the individualor a consultant company or consultant partnership of the individual, and, in thereasonable opinion of the Registrant, the individual spends or will spend a significantamount of time and attention on the affairs and business of the Registrant or an affiliatedentity of the Registrant;

(g) "Employee", for a Service Provider, means an employee of the Service Provider or an affiliatedentity of the Service Provider, provided that, at the relevant time, in the reasonable opinion of theRegistrant, the employee spends or will spend, a significant amount of time and attention on theaffairs and business of:

(A) the Registrant or an affiliated entity of the Registrant; or

(B) a mutual fund managed by the Registrant or an affiliated entity of the Registrant;

(h) "Employee Rule" means Ontario Securities Commission Rule 45-503 Trades To Employees,Executives and Consultants;

(i) "Executive", for the Registrant, means a director, officer or partner of the Registrant or of anaffiliated entity of the Registrant;

(j) "Executive", for a Service Provider, means a director, officer or partner of the Service Provider orof an affiliated entity of the Service Provider;

(k) "Exempt Trade", for the Registrant, means:

(i) a trade in securities of a mutual fund that is made between a person or company and anunderwriter acting as purchaser or between or among underwriters; or

(ii) any other trade for which the Registrant would have available to it an exemption from theregistration requirements of clause 25(1)(a) of the Act if the Registrant were not a "marketintermediary" as such term is defined in section 204 of the Regulation;

(l) "Fund-on-Fund Trade", for the Registrant, means a trade that consists of:

(i) a purchase, through the Registrant, of securities of a mutual fund that is made by anothermutual fund;

(ii) a purchase, through the Registrant, of securities of a mutual fund that is made by acounterparty, an affiliated entity of the counterparty or an other person or company,pursuant to an agreement to purchase the securities to effect a hedge of a liability relatingto a contract for a specified derivative or swap made between the counterparty andanother mutual fund; or

(iii) a sale, through the Registrant, of securities of a mutual fund that is made by anothermutual fund where the party purchasing the securities is:

(A) a mutual fund managed by the Registrant or an affiliated entity of the Registrant;or

(B) a counterparty, affiliated entity or other person or company that acquired thesecurities pursuant to an agreement to purchase the securities to effect a hedgeof a liability relating to a contract for a specified derivative or swap madebetween the counterparty and another mutual fund; and

where, in each case, at least one of the referenced mutual funds is a mutual fund that ismanaged by either the Registrant or an affiliated entity of the Registrant;

(m) an "In Furtherance Trade" means, for the Registrant, a trade by the Registrant that consists of anyact, advertisement, or solicitation, directly or indirectly in furtherance of an other trade in securitiesof a mutual fund, where the other trade consists of:

(i) a purchase or sale of securities of a mutual fund that is managed by the Registrant or anaffiliated entity of the Registrant; or

(ii) a purchase or sale of securities of a mutual fund where the Registrant acts as theprincipal distributor of the mutual fund; and

where, in each case, the purchase or sale is made by or through an other registered dealer if theRegistrant is not otherwise permitted to make the purchase or sale pursuant to these terms andconditions;

(n) "Mutual Fund Instrument" means National Instrument 81-102 Mutual Funds, as amended;

(o) "Permitted Client", for the Registrant, means a person or company that is a client of the Registrant,and that is, or was at the time the person or company became a client of the Registrant:

(i) an Executive or Employee of the Registrant;

(ii) a Related Party of an Executive or Employee of the Registrant;

(iii) a Service Provider of the Registrant or an affiliated entity of a Service Provider of theRegistrant;

(iv) an Executive or Employee of a Service Provider of the Registrant; or

(v) a Related Party of an Executive or Employee of a Service Provider of the Registrant;

(p) "Registered Plan" means a registered pension plan, deferred profit sharing plan, registeredretirement savings plan, registered retirement income fund, registered education savings plan orother deferred income plan registered under the Income Tax Act (Canada);

(q) "Registrant" means Fidelity Investment Canada Limited;

(r) "Regulation" means R.R.O. 1990, Reg. 1015, as amended, made under the Act;

(s) "Related Party", for a person, means an other person who is:

(i) the spouse of the person;

(ii) the issue of:

(A) the person,

(B) the spouse of the person, or

(C) the spouse of any person that is the issue of a person referred to insubparagraphs (A) or (B) above;

(iii) the parent, grandparent or sibling of the person, or the spouse of any of them;

(iv) the issue of any person referred to in paragraph (iii) above; or

(v) a Registered Plan established by, or for the exclusive benefit of, one, some or all of theforegoing;

(vi) a trust where one or more of the trustees is a person referred to above and thebeneficiaries of the trust are restricted to one, some, or all of the foregoing;

(vii) a corporation where all the issued and outstanding shares of the corporation are ownedby one, some, or all of the foregoing;

(t) "securities", for a mutual fund, means shares or units of the mutual fund;

(u) "Seed Capital Trade" means a trade in securities of a mutual fund made to a persons or companyreferred to in any of subparagraphs 3.1(1)(a)(i) to 3.1(1)(a)(iii) of the Mutual Fund Instrument;

(v) "Service Provider", for the Registrant, means:

(i) a person or company that provides or has provided professional, consulting, technical,management or other services to the Registrant or an affiliated entity of the Registrant;

(ii) an Adviser to a mutual fund that is managed by the Registrant or an affiliated entity of theRegistrant; or

(iii) a person or company that provides or has provided professional, consulting, technical,management or other services to a mutual fund that is managed by the Registrant or anaffiliated entity of the Registrant

2. For the purposes hereof, a person or company is considered to be an "affiliated entity" of an other person orcompany if the person or company would be an affiliated entity of that other person or company for thepurposes of the Employee Rule.

3. For the purposes hereof:

(a) "issue", "niece", "nephew" and "sibling" includes any person having such relationship throughadoption, whether legally or in fact;

(b) "parent" and "grandparent" includes a parent or grandparent through adoption, whether legally orin fact;

(c) "registered dealer" means a person or company that is registered under the Act as a dealer in acategory that permits the person or company to act as dealer for the subject trade; and

(d) "spouse", for an Employee or Executive, means a person who, at the relevant time, is the spouseof the Employee or Executive.

4. Any terms that are not specifically defined above shall, unless the context otherwise requires, have themeaning:

(a) specifically ascribed to such term in the Mutual Fund Instrument; or

(b) if no meaning is specifically ascribed to such term in the Mutual Fund Instrument, the samemeaning the term would have for the purposes of the Act.

Restricted Registration

Permitted Activities

5. Subject to paragraph 6, the registration of the Registrant as a mutual fund dealer under the Act shall be forthe purposes only of trading by the Registrant in securities of a mutual fund where the trade consists of:

(a) a Client Name Trade;

(b) an Exempt Trade;

(c) a Fund-on-Fund Trade;

(d) an In Furtherance Trade;

(e) a trade to a person who is a Permitted Client or who represents to the Registrant that he or she isa person included in the definition of Permitted Client; or

(f) a Seed Capital Trade;

provided that, in the case of all trades that are only referred to in clauses (a) or (e), the trades are limited andincidental to the principal business of the Registrant.

Permitted Activities for Transitional Period

6. For the purposes hereof, the trades listed in paragraph 5 shall also include trades in securities of mutualfunds that are managed by the Registrant or an affiliated entity of the Registrant where the trade is made toa participant in an employer-sponsored Registered Plan or other savings plan until the earlier of:

(i) the assumption of such trading activity by Fidelity Retirement Services Company ofCanada Limited (the "Registrant's Affiliate"), a wholly-owned subsidiary of the Registrant,and

(ii) July 2, 2002.

May 23, 2001.

"William R. Gazzard"