Investors Group Trust Co. Ltd (IGTC) as Trustee of Investors U.S. Large Cap Value RSP Fund, Investors European Growth RSP Fund, Investors Global RSP Fund, Investors Japanese Growth RSP Fund, Investors Global Science & Technology RSP Fund, IG AGF U.S. Grow

MRRS Decision

Headnote

Investment by the RSP Fund in forward contractsissued by a related counterparty exemfrom the restrictions andrequirements in sections 111(2)(b) and (c), 111(3), 117(1)(a)and 118(2)(a), subject to specified conditions.

Statutes Cited

Securities Act (Ontario), R.S.O. 1990 c. S.5,as am., 111(2)(b) and (c), 111(3), 117(1)(a), 117 (2), 118(2)(a)and 121(2)(a).

IN THE MATTER OF

THE SECURITIES LEGISLATIONOF

BRITISH COLUMBIA, ALBERTA,SASKATCHEWAN,

ONTARIO, NOVA SCOTIA AND

NEWFOUNDLAND

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEWSYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

INVESTORS GROUP TRUST CO.LTD ("IGTC") AS TRUSTEE OF

INVESTORS U.S. LARGE CAP VALUERSP FUND

INVESTORS EUROPEAN GROWTHRSP FUND

INVESTORS GLOBAL RSP FUND

INVESTORS JAPANESE GROWTHRSP FUND

INVESTORS GLOBAL SCIENCE &TECHNOLOGY RSP FUND

IG AGF U.S. GROWTH RSP FUND

 

MRRS DECISION DOCUMENT

WHEREAS the local securities regulatoryauthority or regulator (the "Decision Maker") in eachof the provinces of British Columbia, Alberta, Saskatchewan,Ontario, Nova Scotia and Newfoundland (the "Jurisdictions")has received an application (the AApplication') from IGTC inits own capacity and on behalf of Investors U.S. Large Cap ValueRSP Fund, Investors European Growth RSP Fund, Investors GlobalRSP Fund, Investors Japanese Growth RSP Fund, Investors GlobalScience & Technology RSP Fund and IG AGF U.S. Growth RSPFund (collectively, the "Global Series RSP Funds")and other mutual funds managed by IGTC or its affiliates) afterthe date of this Decision (defined herein) having an investmentobjective or strategy that is linked to the returns or portfolioof another specified mutual fund while remaining 100% eligiblefor registered plans (together with the Global Series RSP Funds,the "Funds") for a decision pursuant to the securitieslegislation of the jurisdictions (the "Legislation")that the following prohibitions or requirements under the Legislation(the "Applicable Requirements") shall not apply tothe Funds or IGTC, as the case may be, in respect of certaininvestments made by the Funds in forward contracts with MRSTrust Company ("MRS Trust" or the "Related Counterparty"):

1. the provision contained in the Legislationprohibiting a mutual fund from knowingly making and holdingan investment in an issuer in which any officer or directorof the mutual fund, its management company or distributioncompany or an associate of any of them has a significant interest;

2. the provision contained in the Legislationprohibiting a mutual fund from knowingly making and holdingan investment in an issuer in which any person or companywho is a substantial security holder of the mutual fund, itsmanagement company or distribution company has a significantinterest;

3. the provision contained in the Legislationprohibiting a mutual fund from knowingly making and holdingan investment in any person or company in which the mutualfund, alone or together with one or more related mutual funds,is a substantial security holder.

4. The requirements contained in the Legislationrequiring the management company or a mutual fund managerto file a report relating to a purchase or sale of securitiesbetween the mutual fund and any related person or company;and

5. The provision contained in the Legislationprohibiting a portfolio manager from knowingly causing anyinvestment portfolio managed by it to invest in any issuerin which a "responsible person" (as that term isdefined in the Legislation) or an associate of a responsibleperson is an officer or director.

AND WHEREAS pursuant to the Mutual RelianceReview System for Exemptive Relief Applications (the "System"),the Ontario Securities Commission is the principal regulatorfor this application;

AND WHEREAS it has been represented byIGTC to the Decision Makers that:

1. The Funds are or will be open-end mutualfunds established under the laws of the Province of Manitoba.IGTC is a corporation established under the laws of the Provinceof Manitoba. IGTC (or an affiliate) is or will be the managerof the Funds. A significant number, if not a majority, ofthe unitholders of the Global Series RSP Funds reside in Ontario.

2. MRS Trust is a trust and loan corporationwith its registered office located in Ontario, and is a subsidiaryof Mackenzie Financial Corporation and has applied to becomea federally registered trust company. Both Mackenzie FinancialCorporation and IGTC are, directly or indirectly, wholly ownedsubsidiaries of Investors Group Inc.

3. The Funds are or will be reporting issuers.The units of the Funds are or will be qualified under a simplifiedprospectus and annual information form (collectively, the"Prospectus") or the equivalent under the Legislation,which Prospectus will contain disclosure with respect to theinvestment objective, investment practices and restrictionsof the Funds. The Funds are not in default of the requirementsof the Legislation.

4. Each Fund seeks to achieve its investmentobjective while ensuring that its units do not constituteAforeign property' under the Income Tax Act (Canada)(the "Tax Act") for registered retirement savingsplans, registered retirement income plans, and deferred profitsharing plans ("Registered Plans").

5. To achieve its investment objective, eachGlobal Series RSP Fund invests its assets in securities ofa specified underlying fund (the corresponding "LinkedFund") such that its units will, in the opinion of taxcounsel to the Fund, be "qualified investments"for Registered Plans and do not constitute foreign propertyin a Registered Plan. This is primarily achieved by the GlobalSeries RSP Funds entering into derivative contracts with oneor more financial institutions ("Forward Contracts"),which may include the Related Counterparty, that link theirreturns to those of their corresponding Linked Funds. It isanticipated that any future "RSP Clone Funds" promotedby IGTC (or an affiliate) will likewise follow a similar strategy.

6. Each Fund may invest a portion of its assetsin securities of its corresponding Linked Funds. This investmentby any Fund will at all times be below the maximum foreignproperty limit prescribed under the Tax Act for RegisteredPlans.

7. Each of the Global Series RSP Funds haspreviously obtained exemptive relief from the Jurisdictionsin connection with its activities as an "RSP Clone Fund".

8. The Global Series RSP Funds originallyentered into Forward Contracts with certain financial institutions.However, MRS Trust, which is a subsidiary of Mackenzie FinancialCorporation and a related party of IGTC, may in the futurebe prepared to enter into Forward Contracts with some or allof the Funds.

9. Except for the transaction costs payableto MRS Trust in relation to any Forward Contracts, none ofthe Funds, the corresponding Linked Funds, IGTC or any affiliateor associate of any of the foregoing will pay any fees orcharges of any kind to MRS Trust in respect of the ForwardContracts.

10. The Investment Conduct and Review Committeeof IGTC (the "Independent Committee") a majorityof whom are themselves not officers or employees of IGTC,MRS Trust, or any affiliate of either of them, will reviewall proposed Forward Contracts between the Funds and the RelatedCounterparty to ensure that the Funds will receive terms andpricing that are at least as favourable as those agreed toby the Funds with arm's length counterparties from time totime, or as those available to the Funds from arm's lengthcounterparties from time to time.

11. The Prospectus and any renewal thereofwill disclose the involvement of the Related Counterpartyin the Forward Contracts, the review of the Forward Contractsby the Independent Committee as well as all applicable chargesin connection therewith.

12. So long as the debt of the Related Counterpartydoes not have the approved credit rating prescribed in NationalInstrument 81-102 ("NI 81-102"), the obligationsof the Related Counterparty will be unconditionally guaranteedby an affiliate which does have an approved credit rating.

13. In order to hedge its obligations underthe Forward Contracts, the Related Counterparty will likely,but is not required to, purchase units of the applicable correspondingLinked Funds.

14. Except to the extent evidenced by thisDecision and specific approvals granted or to be granted bythe Canadian securities administrators under NI 81-102, theinvestments by each Fund in a Forward Contract have been structuredto comply with the investment restrictions of the Legislationand NI 81-102.

15. The investments by the Funds in the ForwardContracts represent the business judgement of responsiblepersons uninfluenced by considerations other than the bestinterests of the Funds.

16. In the absence of this Decision, pursuantto the Legislation, the Funds are prohibited from making andholding an investment in the Forward Contracts issued by aRelated Counterparty.

17. In the absence of this Decision, pursuantto the Legislation, IGTC is: (a) prohibited from knowinglycausing any investment portfolio managed by it to invest inany issuer in which a "responsible person" is anofficer or director; and (b) required to file a report uponevery investment by the Funds in a Forward Contract with theRelated Counterparty.

AND WHEREAS pursuant to the System thisMRRS Decision Document evidences the decision of each DecisionMaker (collectively, the "Decision");

AND WHEREAS each of the Decision Makersare satisfied that the test contained in the Legislation thatprovides the Decision Maker with the jurisdiction to make theDecision has been met;

THE DECISION of the Decision Makers underthe Legislation is that the Applicable Requirements do not applyso as to prevent a Fund from entering into Forward Contractswith a Related Counterparty.

PROVIDED IN EACH CASE THAT:

(a) the pricing terms offered by the RelatedCounterparty to the Funds under the Forward Contracts areat least as favourable as the terms agreed to by the Fundswith arm's length counterparties from time to time, or asthe terms otherwise available to the Funds from the arm'slength counterparties from time to time;

(b) prior to the Funds entering into a ForwardContract with the Related Counterparty, the Independent Committeewill review the pricing terms offered by the Related Counterpartyto the Funds against the pricing terms agreed to by the Fundswith arm's length counterparties or the pricing terms otherwiseavailable to the Funds from arm's length counterparties toensure that the pricing is at least as favourable;

(c) the review by the Independent Committeewill be undertaken not less frequently than on an annual basis,and in addition on any renewal or pricing amendment to eachForward Contract with the Related Counterparty during theterm of such contract;

(d) The Funds' Prospectus, and any renewalthereof discloses the review of the Forward Contracts by theIndependent Committee, as well as the involvement of the RelatedCounterparty; and

(e) The Funds will enter into Forward Contractswith any Related Counterparty only once confirmation of favourablepricing is received from the Independent Committee.

August 2, 2002.

"Howard I. Wetston"                    "RobertL. Shirriff"