King Street Capital Management, L.L.C. - s. 80 of the CFA

Headnote

Section 80 of the Commodity Futures Act (Ontario) (the CFA) - Relief from the adviser registration requirement of paragraph 22(1)(b) of the CFA granted to a non-resident adviser, for a term of 3 years, in respect of advising a certain non-Canadian mutual funds, non-redeemable investment funds or similar investment vehicles, regarding trades in commodity futures contracts and commodity futures options traded on commodity futures exchanges located primarily outside of Canada and cleared through clearing corporations located primarily outside of 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.

IN THE MATTER OF THE

COMMODITY FUTURES ACT, R.S.O. 1990,

CHAPTER C. 20, AS AMENDED (THE "CFA")

AND

IN THE MATTER OF

KING STREET CAPITAL MANAGEMENT, L.L.C.

ORDER

(Section 80 of the CFA)

UPON the application (the "Application") of King Street Capital Management, L.L.C. (the "Applicant") to the Ontario Securities Commission (the "Commission") for an order pursuant to section 80 of the CFA that the Applicant and its respective members, directors, officers, and employees, are exempt, for a period of three years, from the requirements of paragraph 22(1)(b) of the CFA in respect of advising King Street Capital, Ltd. (the "Existing Fund") and certain other mutual funds, non-redeemable investment funds or similar investment vehicles (the "Future Funds", the Existing Fund and the Future Funds are collectively referred to herein as the "Funds"), in respect of trades in commodity futures contracts and commodity futures options traded on commodity futures exchanges located primarily outside of Canada and cleared through clearing corporations located primarily outside of 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 limited liability company organized under the laws of the state of Delaware. The Applicant may also include affiliates of, or entities organized by, the Applicant which may subsequently execute and submit to the Commission a verification certificate referencing the Application confirming the truth and accuracy of the information set out in the Application with respect to that particular Applicant.

2. The Existing Fund is, and the Future Funds will be, established outside of Canada. Securities of the Existing Fund are, and securities of the Future Funds will be, primarily offered outside of Canada to institutional investors and high net worth individuals. Securities of the Existing Fund are, and securities of the Future Funds will be, offered to certain Ontario residents who are institutional investors or high net worth individuals and will be offered and distributed in Ontario in reliance upon an exemption from the prospectus requirements of the Securities Act (Ontario) (the "OSA"), and in reliance upon an exemption from the adviser registration requirement of the OSA under section 7.1 or section 7.10 of Commission Rule 35-502 Non-Resident Advisers ("Rule 35-502").

3. The Applicant is responsible for, in addition to other things, providing certain administrative services, investment advice and other investment management services to the Funds and arranging for the execution of the Funds' securities transactions. The Applicant currently provides advice with respect to commodity futures contracts and commodity futures options to the Existing Fund and may in the future provide similar advice to the Future Funds.

4. The Applicant is not currently registered, and is not required to be registered, as an investment adviser under the U.S. Investment Advisers Act of 1940, as amended, or any other applicable regulations.

5. The Applicant filed a claim of exemption from registration as a commodity pool operator with the United States Commodity Futures Trading Commission on September 17, 2003, which became effective upon the filing of the claim of exemption.

6. The Applicant, where required, is or will be registered or licensed or is or will be entitled to rely on appropriate exemptions from such registrations or licences to provide advice to the Funds pursuant to the legislation applicable to the Funds, the Applicant or those who invest in the Funds. In particular:

(a) The Applicant is not registered in any capacity under the CFA or the OSA.

(b) Securities of the Funds will be offered primarily abroad. The Funds will not seek to become a reporting issuer in Ontario or in any other Canadian jurisdiction.

(c) The Funds may, as part of their investment program, invest in commodity futures contracts and commodity futures options principally traded on organized exchanges outside of Canada and cleared through clearing corporations located outside of Canada.

(d) Prospective investors who are Ontario residents will receive disclosure (the "Statement") that includes (i) a statement that there may be difficulty in enforcing legal rights against the Funds or the Applicant which advises the Funds, because such entities are resident outside of Canada and all or substantially all of their assets are situated outside of Canada; and (ii) a statement that the Applicant advising the Funds is not registered with or licensed by any securities regulatory authority in Canada and, accordingly, the protections available to clients of a registered adviser will not be available to purchasers of securities of the Funds.

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 each of the Applicants and their respective members, directors, officers, and employees 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 Funds, for a period of three (3) years, provided that at the time that such activities are engaged in:

(a) any such Applicant, where required, is or will be registered or licensed, or is or will be entitled to rely on appropriate exemptions from such registrations or licences, to provide advice to the Funds pursuant to the applicable legislation of its principal jurisdiction;

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

(c) securities of the Funds will be offered primarily outside of Canada and will only be distributed in Ontario 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 7.1 or section 7.10 of Rule 35-502;

(d) prospective investors who are Ontario residents will receive the Statement;

(e) any Applicant whose name does not specifically appear in this Order and who proposes to rely on the exemption granted under this Order, shall, as a condition to relying on such exemption, have executed and filed with the Commission a verification certificate referencing this Order and confirming the truth and accuracy of the Application with respect to that particular Applicant; and

(f) the Applicant shall, as a condition to relying on this Order, file with the Commission notice of the name, date of creation, jurisdiction of formation and investment fund manager of any Future Fund that the Applicant wishes to advise.

April 2, 2004.