Galaxy Capital Management Inc.

Headnote

Subsection 74(1) - Trades by pooled funds of additional units to existingunitholders (having made an initial investment of at least $150,000 andholdings units having an aggregate acquisition cost or aggregate netasset value of not less than $150,000) exempt from sections 25 and 53 ofthe Act - Trades in units of funds also exempted from subsection 72(3) asamended by Section 7.1 of Rule 45-501 - Exempt Distributions providedthat, within 30 days after its financial year end, the fund: (i) files a report,prepared in accordance with Form 45-501F1 in respect of such tradesduring the financial year; and (ii) remits with the report the correspondingfee - Portfolio manager exempt from sections 223, 224(1)(a), 226, 227and 228 of the Regulations under the Act in respect of distributions ofunits - Relief subject to "sunset" provision.

Statutes Cited

Securities Act, R.S.O. 1990, c.S.5, as am. 1(1), 25, 35(1)5, 53, 72(1)(d),72(3), 74(1) and 147.

Regulations Cited

Regulation made under the Securities Act, R.R.O. 1990, Reg. 1015, asam., 219, 223, 224, 225, 226, 227, 228 and 233.

Rules Cited

Ontario Securities Commission Rule 33-502 - Exceptions to Conflict Rulesin the Sale of Mutual Fund Securities

Ontario Securities Commission Rule 45-501 - Exempt Distributions.

Ontario Securities Commission Rule 85-501 - Mutual Fund ReinvestmentPlans

UPON the application of Galaxy Capital Management Inc. (the"Applicant"), the manager of certain pooled investment funds to beestablished from time to time by the Applicant (individually, a "Fund" andcollectively, the "Funds"), to the Ontario Securities Commission (the"Commission") for:

(i) a ruling pursuant to subsection 74(1) of the Act that certain trades inUnits (as hereinafter defined) of the Funds are not subject to sections25 and 53 of the Act, provided that when such Units are acquired, theholder of the Units (the "Unitholder") then holds Units of such Fundhaving an aggregate acquisition cost or an aggregate net asset valueof not less than $150,000;

(ii) an order pursuant to section 147 of the Act that trades in Units of theFunds are not subject to subsection 72(3) of the Act, provided a Form45-501F1 is filed and any required fees are paid within 30 days of thefinancial year end of each Fund; and

(iii) an exemption pursuant to section 233 of the Regulation exemptingthe Applicant from sections 223, 224(1)(a), 226, 227 and 228 of theRegulation in respect of Units of the Funds.

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

AND UPON the Applicant having represented to the Commission asfollows:

1. The Applicant was incorporated under the Canada BusinessCorporations Act (the "CBCA") on May 7, 1998 and is registeredunder the Act as a limited market dealer and as an adviser in thecategories of "investment counsel" and "portfolio manager". TheApplicant is not a reporting issuer under the Act and is not in defaultof any of the requirements of the Act or the regulations madethereunder.

2. The Applicant has established the following open-end pooledinvestment trusts:

(i) Galaxy Capital Canadian Equity Fund;

(ii) Galaxy Capital Canadian Fixed Income Fund;

(iii) Galaxy Capital Canadian Balanced Fund; and

(iv) Galaxy Capital American Equity Fund.

Each Fund was established under the laws of the Province of Ontarioand is governed by separate trust documents consisting of the MasterTrust Agreement dated March 26, 1999 and a separate FundDeclaration of even date. Additional Funds may subsequently beestablished from time to time by a Fund Declaration as part of theGalaxy Capital group of Funds.

3. Each Fund is divided into units ("Units") of one class. Each Unit of aFund ranks equally with every other Unit of that Fund, except withrespect to management fee distributions and with respect to holdersof a fraction of a Unit who will not be entitled to vote at meetings ofUnitholders. Units of the Funds are not transferable.

4. Units will be offered pursuant to a confidential offering memorandumin Ontario predominantly on a private placement basis (i.e., pursuantto paragraph 35(1)5 and clause 72(1)(d) of the Act as amended byPart 3 of Ontario Securities Commission Rule 45-501 - ExemptDistributions (the "Exempt Distributions Rule"), as applicable). EachFund is or will be a "mutual fund in Ontario" as defined in subsection1(1) of the Act, none of the Funds currently intends to become a"reporting issuer" as such term is defined in the Act, and the Units willnot be listed on any stock exchange.

5. The minimum initial investment by an investor in a Fund is $150,000.

6. Subject to the Commission issuing the Ruling, Order and Exemptionrequested herein, it is proposed that investors be able to purchaseadditional Units ("Additional Units") of a Fund in increments of lessthan $150,000, provided the Unitholder holds Units of the Fund withan aggregate acquisition cost or an aggregate net asset value of atleast $150,000.

7. The Applicant will act as the manager of each Fund. The TrustCompany of Bank of Montreal will act as the trustee (the "Trustee")of each Fund and as the custodian of the assets of each Fund will beresponsible for the safekeeping of such assets, all as set forth in theMaster Trust Agreement and individual Fund Declarations.

8. The assets of each Fund will be invested from time to time upon theadvice of the Applicant or upon the advice of an investment adviserappointed by the Applicant based on the objectives of such Fund asset out in its Fund Declaration and the Master Trust Agreement.

9. Units of each Fund will be issued on a continuous basis to investorsin Ontario at a price per Unit equal to the net asset value per Unit(the "Net Asset Value Per Unit") of such Fund determined on eachbusiness day on which The Toronto Stock Exchange is open fortrading, and, where the last day of the Fund's taxation year is not abusiness day, on such last day (each a "Valuation Day"). TheManager reserves the right to accept or reject orders for Units of aFund.

10. No sales commissions or deferred sales commissions will be chargedwhen an investor buys or redeems Units of a Fund.

11. A Unitholder may redeem by written request all or a portion of itsUnits as at any Valuation Day by giving a written request to theApplicant at least five (5) business days in advance of such ValuationDay. Units will be redeemed at the Net Asset Value Per Unit togetherwith any undistributed net income and net realized capital gains orother distributions payable in respect of such Units as of suchValuation Day, less any taxes required to be withheld under anyapplicable law.

12. Investors will be provided with a copy of a confidential offeringmemorandum of the Funds prior to their investment in a Fund. Theconfidential offering memorandum describes the investmentobjectives and restrictions of each Fund, how Units may bepurchased and redeemed, the risks involved, certain taxconsiderations and all applicable fees and expenses. In addition,Unitholders will be provided with a monthly statement setting out thenumber and value of the Units they hold in a Fund and anytransactions they have made since the last report they received fromsuch Fund. Unitholders will also be provided with a quarterlyinvestment report discussing Fund performance, investment outlook,the composition of the portfolio and the reason for changes in thesecurities held within it. Unitholders will be provided with a copy ofthe Fund's annual financial statements with the auditor's reportthereon within 120 days of the fiscal year-end of such Fund.

13. The fiscal year-end of each Fund will be December 31.

14. The distribution of additional Units of a Fund to Unitholders of thatFund on the automatic reinvestment of distributions of income, capitalor capital gains will be exempt from the requirements of sections 25and 53 of the Act pursuant to Ontario Securities Commission Rule 81-501 entitled "Mutual Fund Reinvestment Plans".

15. The Applicant is subject to the provisions of Part XIII of theRegulation with respect to the Funds, including sections 223,224(1)(a), 226, 227 and 228 of the Regulation.

16. The Applicant acts in a similar capacity with respect to the Units ofthe Funds as a mutual fund dealer or as a fully registered dealer inrespect of "associated mutual fund securities" (as defined in OntarioSecurities Commission Rule 33-502 - Exceptions to Conflict Rules inthe Sale of Mutual Fund Securities).

AND UPON the Commission being satisfied that to do so would notbe prejudicial to the public interest;

IT IS RULED, pursuant to subsection 74(1) of the Act that trades inAdditional Units of any of the Funds, by or on behalf of the Funds, other thana trade of Units in respect of the reinvestment of distributions, are notsubject to sections 25 and 53 of the Act provided that:

(a) at the time of the acquisition of such Additional Units, the Unitholdermaking the acquisition then owns Units of that Fund having anaggregate acquisition cost or an aggregate net asset value of not lessthan $150,000;

(b) at the time of the acquisition of such Additional Units, the Applicantis registered under the Act as a limited market dealer and as anadviser in the categories of investment counsel and portfoliomanager,

and provided that this Ruling will terminate 90 days after the publication infinal form of any rule respecting trades in securities of pooled funds,managed by a portfolio manager, that are made by the portfolio manager toportfolio-managed clients or client accounts of the portfolio manager;

AND IT IS ORDERED, pursuant to section 147 of the Act that a tradein Units of a Fund shall not be subject to subsection 72(3) of the Act, asamended by section 7.1 of the Exempt Distributions Rule, provided that:

(a) within 30 days after the financial year end of the Fund, the Fund filesa report in accordance with Form 45-501F1 referred to in section 7.1of the Exempt Distributions Rule in respect of trades in Units andAdditional Units of the Fund during such financial year; and

(b) within 30 days after the financial year end of the Fund, the Fund paysthe fee prescribed by the Exempt Distributions Rule for reports filedin Form 45-501F1;

AND, pursuant to Section 233 of the Regulation, that the Applicantis exempt from sections 223, 224(1)(a), 226 and 228 of the Regulation inrespect of distributions of Units and Additional Units;

AND, pursuant to Section 233 of the Regulation, that the Applicant isexempt from the requirements of Section 227 of the Regulation in respect ofdistributions of Units and Additional Units, provided that the Applicant,before acquiring discretionary authority, secures the specific and informedwritten consent of the client to the exercise of the discretionary authority inrespect of the Units and Additional Units.

February 25^th, 2000.

"Howard I. Wetston"     "J. F. Howard"