Gartmore Investment Limited - s. 80 of the CFA

Headnote

Section 80 of the Commodity Futures Act (Ontario) -- relief from the adviser registration requirements of subsection 22(1)(b) of the CFA in respect of advising certain mutual funds, non-redeemable investment funds and similar investment vehicles established outside of Canada in respect of trades in commodity futures contracts and commodity futures options traded on commodity futures exchanges primarily outside Canada and cleared through clearing corporations primarily outside Canada, subject to certain terms and conditions.

Statutes Cited

Commodity Futures Act, R.S.O. 1990, c. C.20, as am., s. 22(1)(b) and s. 80.

Securities Act, R.S.O. 1990, c. S.5, as am. -- Rule 35-502 -- Non Resident Advisers.

June 13, 2006

IN THE MATTER OF

THE COMMODITY FUTURES ACT,

R.S.O. 1990, CHAPTER C.20, AS AMENDED

(THE CFA)

AND

IN THE MATTER OF

GARTMORE INVESTMENT LIMITED

ORDER

(Section 80 of the CFA)

UPON the application (the Application) of Gartmore Investment Limited (the Applicant) to the Ontario Securities Commission (the Commission) for an order pursuant to section 80 of the CFA that the Applicant and its directors, officers and employees acting on its behalf as an adviser (collectively, the Representatives), be exempt, for a period of three years, from the requirements of paragraph 22(1)(b) of the CFA in respect of advising certain mutual funds, non-redeemable investment funds and similar investment vehicles established outside of Ontario in respect of trades in commodity futures contracts and commodity futures options traded on commodity futures exchanges primarily outside Canada and cleared through clearing corporations primarily outside Canada;

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

AND UPON the Applicant having represented to the Commission that:

1. The Applicant is a corporation incorporated under the laws of England and Wales, with its head office in London, England. The Applicant is a subsidiary of Gartmore Investment Management PLC of London, England.

2. The Applicant is registered under the Securities Act (Ontario) as an international adviser in the categories of investment counsel and portfolio manager and is not registered in any capacity under the CFA.

3. The Applicant is registered as an investment adviser with the U.S. Securities and Exchange Commission (the SEC) and as an investment manager with the U.K. Financial Services Authority.

4. The Applicant acts as an investment manager to certain private non-Canadian investment funds, including, but not limited to, The AlphaGen Octanis Fund Limited, The AlphaGen Absolus Fund Limited, The AlphaGen Aldebaran Fund Limited, The AlphaGen Altai Fund Limited, The Arrakis Fund Limited, The AlphaGen Avior Fund Limited, The AlphaGen Capella Fund Limited, The AlphaGen Crucis Fund Limited, The AlphaGen Eltanin Fund Limited, The AlphaGen Etacas Fund Limited, The AlphaGen Hokuto Fund Limited, The AlphaGen Perseus Fund Limited, The AlphaGen Pictor Fund Limited, The AlphaGen Pyxis Fund Limited, The AlphaGen Regulus Fund Limited, The AlphaGen RhoCas Fund Limited, The AlphaGen Tucana Fund Limited, The AlphaGen Velas Fund Limited, The AlphaGen Volantis Fund Limited (collectively, the Gartmore Funds). The Applicant may in the future manage certain other mutual funds, non-redeemable investment funds or similar investment vehicles (collectively, along with the Gartmore Funds, the Funds).

5. The Funds invest, or may in the future invest, in commodity futures contracts and commodity futures options traded on organized exchanges primarily outside Canada and cleared through clearing corporations primarily outside Canada.

6. The Applicant, as investment manager of the Funds, will make all decisions with respect to the Funds and as such will also provide all investment advice.

7. By advising the Funds directly on investing in commodity futures contracts and commodity futures options, the Applicant will be providing advice to the Funds with respect to commodity futures contracts and commodity futures options.

8. Any of the Funds advised by the Applicant are or will be established outside Canada. Securities of the Funds are or will be primarily offered outside Canada to institutional investors and high net worth investors. Securities of the Funds are or will be offered only to Ontario residents who qualify as an "accredited investor" under NI 45-106 Prospectus and Registration Exemptions or will be offered and distributed in Ontario only in reliance upon an exemption from the prospectus requirements of the Securities Act (Ontario) (the OSA) and an exemption from the adviser registration requirement of the OSA under section 7.10 of OSC Rule 35-502 Non-Resident Advisers (Rule 35-502).

9. Prospective investors in the Funds who are Ontario residents will receive disclosure that includes:

(a) a statement that there may be difficulty in enforcing any legal rights against the Applicant (or its directors, officers and employees) and the Funds (or their directors, officers and employees), because such entities are resident outside Canada and all or substantially all of their assets are situated outside Canada; and

(b) a statement that the Applicant is not, or will not be, registered with the Commission under the CFA and, accordingly, the protections available to clients of a registered adviser under the CFA will not be available to purchasers of securities of the Funds.

10. None of the Funds has any intention of becoming a reporting issuer in Ontario or in any other Canadian jurisdiction.

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

IT IS ORDERED pursuant to section 80 of the CFA that the Applicant and its Representatives responsible for advising the Funds are not subject to the requirements of paragraph 22(1)(b) of the CFA in respect of their advisory activities in connection with the Fund, for a period of three years, provided that at the time such activities are engaged in:

(a) the Applicant continues to be registered as an investment adviser with the SEC and registered as an investment manager with the U.K. Financial Services Authority or otherwise exempt from such registrations;

(b) the Funds invest, or may in the future invest, in commodity futures contracts and commodity futures options traded on organized exchanges primarily outside Canada and cleared through clearing corporations primarily outside Canada;

(c) securities of the Funds will be offered primarily outside Canada and will only be distributed in Ontario through one or more registrants (as defined under the OSA) in reliance on an exemption from the prospectus requirements of the OSA and upon an exemption from the adviser registration requirement of the OSA under section 7.10 of Rule 35-502; and

(d) prospective investors in the Funds who are Ontario residents will receive disclosure that includes: (i) a statement that there may be difficulty in enforcing any legal rights against the Applicant (or its Representatives) and the Funds (or its Representatives), because such entities are resident outside Canada and all or substantially all of their assets are situated outside Canada; and (ii) a statement that the Applicant is not, or will not be, registered with the Commission under the CFA and, accordingly, the protections available to clients of a registered adviser under the CFA will not be available to purchasers of securities of the Funds.