Hymas Investment Management Inc. - ss. 74(1)

UPON the application of Hymas Investment Management Inc. (the "Applicant") to the Ontario Securities Commission (the "Commission") for: (i) a ruling pursuant to subsection 74(1) of the Act that certain trades in units ("Units") of pooled investment trusts to be stablished and managed by the Applicant are not subject to sections 25 or 53 of the Act; (ii) an order of the Commission pursuant to section 147 of the Act that the trades in Units are not subject to subsection 72(3) of the Act and Rule 45-501 Exempt Distribution ("Rule 45-501") with respect to the filing of a Form 45-501 F1 in respect of trades in Units of such pooled investment trusts, provided a Form 45-501F1 and the prescribed fee are filed within 30 days of the financial year end of each pooled investment trust and (iii) an order pursuant to section 233 of the Regulation exempting the Applicant from sections 223, 226, 227 and 228 of the Regulation in respect of the distribution of the Units; AND UPON considering the application and the recommendation of the 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 the Province of Ontario and is registered under the Act as an adviser in the categories of investment counsel and portfolio manager and as a dealer in the category of limited market dealer. 2. In order to service its present and future private and institutional clients, the Applicant intends to establish two pooled investment trusts and it may establish additional investment trusts from time to time (individually, a "Fund" and collectively, the "Funds"). 3. Each Fund will be established pursuant to a Master Declaration of Trust and a separate Regulation thereto (collectively, in respect of each Fund, a "Trust Agreement") pursuant to which the Applicant will be appointed as the trustee of the Funds. 4. The Commission has approved the proposal that the Applicant act as the trustee of the Funds pursuant to the authority conferred upon the Commission in clause 213(3)(b) of the Loan and Trust Corporation Act (Ontario). 5. Each Fund will be a "mutual fund in Ontario" as defined in subsection 1(1) of the Act and, as such, is required to comply with the requirements of subsection 77(2) and sections 78 and 79 of the Act with respect to the preparation, mailing to securityholders and filing with the Commission of interim and annual financial statements. 6. The assets of each of the Funds will be invested from time to time upon the advice of the Applicant based on the objectives, policies and restrictions set out in each Fund's respective Trust Agreement. 7. Units of the Fund will be issued on a continuous basis at the net asset value per Unit on each valuation date set out in each Fund's respective Trust Agreement. No sales charges or deferred sales charges are charged when an investor buys Units of a Fund. 8. Units of the Funds will be redeemable without charge upon the request of a holder of Units of a Fund at the net asset value per Unit on the Fund's valuation date, provided that a redemption fee of 1% will be charged on redemptions of Units held for less than one year. The redemption fee will not be charged on Units acquired on automatic reinvestment of dividends. 9. Units of the Funds will be non-transferable. 10. None of the Funds is expected to become a reporting issuer under the Act. 11. The fiscal year end of each Fund will be December 31. 12. Investors are not permitted to subscribe for Units of a Fund unless such investor makes, or has made, an initial purchase of Units of such Fund (an "Initial Investment") at a subscription price of not less than $150,000. The Applicant proposes that, for the purposes of calculating an investor's Initial Investment in a Fund, an investor may aggregate purchases made by the investor, his or her registered retirement savings plan or registered retirement income fund, and his or her wholly-owned companies, or any combination of the foregoing (a "Unitholder"). 13. Without the relief granted herein, an Initial Investment in a Fund may not be made in reliance upon the registration and prospectus exemptions contained in paragraph 35(1)5 and clause 72(1)(d) of the Act, as amended by section 3.1 of Rule 45-501, where an investor calculates his or her Initial Investment in a Fund as described in paragraph 12 above. 14. Following an Initial Investment in a Fund, it is proposed that a Unitholder be permitted to subscribe for additional units of such Fund (the "Additional Units") by: (a) automatically reinvesting distributions otherwise receivable by the Unitholder which are attributable to outstanding units, unless otherwise requested by a Unitholder; or (b) subscribing and paying for Additional Units. 15. The issuance of Additional Units to Unitholders pursuant to the reinvestment as contemplated in paragraph 14(a) above will be made by the Fund in reliance upon the registration and prospectus exemptions contained in Rule 81-501 Mutual Fund Reinvestment Plans. 16. It is proposed that Unitholders be permitted to purchase Additional Units of a Fund in increments of less than $150,000, as contemplated in paragraph 14(b) above, provided that at the time of such subsequent acquisition, the Unitholder holds Units of the same Fund having either an aggregate acquisition cost or an aggregate net asset value of at least $150,000. 17. The Applicant is subject to the provisions of Part XIII of the Regulation with respect to the Funds, including sections 223 to 228 of the Regulation. 18. The Applicant acts in a similar capacity with respect the Units of the Funds as a mutual fund dealer, or as a fully registered dealer in respect of "associated mutual fund securities", as such term is defined in Rule 33-502 Exceptions to Conflict Rules in the Sale of Mutual Fund Securities. AND UPON the Commission being satisfied that to grant this ruling and order would not be prejudicial to the public interest; IT IS RULED pursuant to subsection 74(1) of the Act that trades by the Applicant of Units or Additional Units of a Fund to a Unitholder as described in paragraphs 12 and 16 of this ruling and order will not be subject to sections 25 and 53 of the Act, provided that: A. the aggregate acquisition cost of the Initial Investment to the Unitholder is not less than $150,000; B. at the time of the acquisition of Additional Units of a Fund, the Unitholder then owns Units of that Fund having either an aggregate acquisition cost or net asset value of not less than $150,000; C. at the time of the acquisition of Units or Additional Units of a Fund, the Applicant is registered under the Act as an adviser in the categories of investment counsel and portfolio manager and as a dealer in the category of limited market dealer and such registrations are in good standing; and D. this ruling will terminate 90 days after the publication in final form by the Commission of any rule regarding trades in securities of pooled funds; AND IT IS ORDERED pursuant to section 147 of the Act that trades in Units and Additional Units of a Fund are not subject to subsection 72(3) of the Act and Rule 45-501 provided that within 30 days after the financial year of such Fund, the Fund files a report in accordance with Form 45-501F1 in respect of all trades in Units and Additional Units of the Fund during such financial year and pays the fee prescribed by section 7.3 of Rule 45-501; AND IT IS FURTHER ORDERED pursuant to section 233 of the Regulation that the Applicant is exempt from the requirements of sections 223, 226 and 228 of the Regulation in respect of distributions of Units and Additional Units of the Funds; AND IT IS FURTHER ORDERED pursuant to section 233 of the Regulation that the Applicant is exempt from the requirements of section 227 of the Regulation in respect of distributions of Units and Additional Units of the Funds, provided that the Applicant, before acquiring discretionary authority, secures the specific and informed written consent of the client to the exercise of the discretionary authority in respect of the Units of the Funds. March 13, 2001. J. A. Geller, Robert W. Davis