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

Headnote

Section 80 of the Commodity Futures Act (Ontario) -- Renewal of previous order (granted April 2, 2004) providing an exemption from the adviser registration requirements of subsection 22(1)(b) of the CFA in respect of acting as an adviser to certain mutual funds, non-redeemable investment funds and similar investment vehicles primarily offered outside of Canada in respect of trades in commodity futures contracts and commodity futures options primarily traded on commodity futures exchanges outside Canada and primarily cleared through clearing corporations outside Canada, subject to certain terms and conditions.

Fees waived as application only required because amendments to or a rule under the CFA that would have a similar effect as section 7.10 of Rule 35-502 -- Non Resident Advisers have not yet been adopted.

Statutes Cited

Commodity Futures Act, R.S.O. 1990, c. C.20, as am., ss. 22(1)(b), 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, renewing the exemption order granted by the Commission on April 2, 2004, that the Applicant (including its directors, partners, officers and employees), be exempt, for a period of three years, from the requirements of paragraph 22(1)(b) of the CFA in respect of acting as an adviser to certain non-Canadian mutual funds, non-redeemable investment funds and similar investment vehicles (the Funds, as defined below) primarily offered outside of Canada in respect of trades in commodity futures contracts and commodity futures options primarily traded on commodity futures exchanges outside Canada and primarily cleared through clearing corporations 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 limited liability company organized under the laws of the state of Delaware.

2. The Applicant is not registered in any capacity under the CFA or the Securities Act (Ontario) (the OSA).

3. The Applicant acts as an adviser to King Street Capital, Ltd. (the Existing Fund). The Applicant may in the future establish or advise certain other non-Canadian mutual funds, non-redeemable investment funds or similar investment vehicles (collectively, together with the Existing Fund, the Funds).

4. The Funds advised by the Applicant are or will be established outside of Canada. Securities of the Funds are or will be primarily offered outside of Canada to institutional investors and high net worth individuals. Securities of the Funds are or will be offered to certain Ontario residents who are, at the time of their investment, institutional investors or high net worth individuals that qualify as an "accredited investor" under National Instrument 45-106 -- Prospectus and Registration Exemptions, and will only be distributed in Ontario through one or more registrants under the OSA, in reliance upon 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 (Privately Placed Funds Offered Primarily Abroad) of OSC Rule 35-502 -- Non Resident Advisers (Rule 35-502).

5. The Funds may, as a part of their investment program, invest in commodity futures contracts and commodity futures options primarily traded on commodity futures exchanges outside Canada and primarily cleared through clearing corporations outside Canada.

6. The Applicant is, or in the future may be, an investment adviser for the Funds. As the investment adviser for the Funds, the Applicant is or will be 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.

7. Paragraph 22(1)(b) of the CFA prohibits a person or company from acting as an adviser unless the person or company is registered as an adviser under the CFA, or is registered as a partner or an officer of a registered adviser and is acting on behalf of a registered adviser. Under the CFA, "adviser" means a person or company engaging in or holding himself, herself or itself out as engaging in the business of advising others as to trading in "contracts", and "contracts" means commodity futures contracts and commodity futures options.

8. By acting as an adviser to the Funds directly on investing in commodity futures contracts and commodity futures options primarily traded on commodity futures exchanges outside Canada and primarily cleared through clearing corporations outside Canada, the Applicant will be providing advice to Ontario investors with respect to commodity futures contracts and commodity futures options and, in the absence of being granted the requested relief, would be required to register as advisers under the CFA.

9. There is presently no rule under the CFA that provides an exemption from the adviser registration requirement in paragraph 22(1)(b) of the CFA for a person or company acting as an adviser in respect of commodity futures options and commodity futures contracts that is similar to the exemption from the adviser registration requirement in section 25(1)(c) of the OSA for acting as an adviser (as defined in the OSA) in respect of securities that is provided under section 7.10 of Rule 35-502.

10. As would be required under section 7.10 of Rule 35-502, securities of the Funds are, or will be:

(a) primarily offered outside of Canada;

(b) only distributed in Ontario through one or more registrants under the OSA; and

(c) distributed in Ontario in reliance upon an exemption from the prospectus requirements of the OSA.

11. The Applicant, where required, is or will be appropriately 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. In particular, the Applicant is not currently registered, and is not required to be registered, with the U.S. Securities and Exchange Commission (the SEC), the U.S. Commodity Futures Trading Commission (the CFTC), the National Futures Association (the NFA) or under any applicable legislation of its principal jurisdiction.

12. All of the Funds issue securities which are offered primarily abroad. None of the Funds has any intention of becoming a reporting issuer in Ontario or in any other Canadian jurisdiction.

13. Prior to purchasing any securities in one or more of the Funds, all 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 relevant Fund or the Applicant (or the individual representatives of the Applicant) advising the relevant Fund, because such entity is resident outside of Canada and all or substantially all of its assets are situated outside of Canada; and

(ii) a statement that the Applicant advising the relevant Fund is not, or will not be, registered with or licensed by any regulatory authority in Canada and, accordingly, the protections available to clients of a registered adviser under the OSA and the CFA will not be available to purchasers of securities of the relevant Fund.

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 is exempted from the requirements of paragraph 22(1)(b) of the CFA in respect of acting as an adviser in connection with any one or more of the Funds, for a further period of three years, provided that at the relevant time that such activities are engaged in:

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

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

(c) securities of the Funds are:

(i) primarily offered outside of Canada,

(ii) only distributed in Ontario through one or more registrants under the OSA; and

(iii) 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 7.10 of Rule 35-502; and

(d) prior to purchasing any securities in one or more of the Funds, all investors in the Funds who are Ontario residents received disclosure that includes:

(i) a statement that there may be difficulty in enforcing any legal rights against the relevant Fund or the Applicant (or the individual representatives of the Applicant) advising the relevant Fund, because such entity is resident outside of Canada and all or substantially all of its assets are situated outside of Canada; and

(ii) a statement that the Applicant advising the relevant Fund is not, or will not be, registered with or licensed by any regulatory authority in Canada and, accordingly, the protections available to clients of a registered adviser under the OSA and the CFA will not be available to purchasers of securities of the relevant Fund.

March 30, 2007

Fees waived as application only required because amendments to or a rule under the CFA that would have a similar effect as section 7.10 of Rule 35-502 -- Non Resident Advisers have not yet been adopted.

Statutes Cited

Commodity Futures Act, R.S.O. 1990, c. C.20, as am., ss. 22(1)(b), 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, renewing the exemption order granted by the Commission on April 2, 2004, that the Applicant (including its directors, partners, officers and employees), be exempt, for a period of three years, from the requirements of paragraph 22(1)(b) of the CFA in respect of acting as an adviser to certain non-Canadian mutual funds, non-redeemable investment funds and similar investment vehicles (the Funds, as defined below) primarily offered outside of Canada in respect of trades in commodity futures contracts and commodity futures options primarily traded on commodity futures exchanges outside Canada and primarily cleared through clearing corporations 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 limited liability company organized under the laws of the state of Delaware.

2. The Applicant is not registered in any capacity under the CFA or the Securities Act (Ontario) (the OSA).

3. The Applicant acts as an adviser to King Street Capital, Ltd. (the Existing Fund). The Applicant may in the future establish or advise certain other non-Canadian mutual funds, non-redeemable investment funds or similar investment vehicles (collectively, together with the Existing Fund, the Funds).

4. The Funds advised by the Applicant are or will be established outside of Canada. Securities of the Funds are or will be primarily offered outside of Canada to institutional investors and high net worth individuals. Securities of the Funds are or will be offered to certain Ontario residents who are, at the time of their investment, institutional investors or high net worth individuals that qualify as an "accredited investor" under National Instrument 45-106 -- Prospectus and Registration Exemptions, and will only be distributed in Ontario through one or more registrants under the OSA, in reliance upon 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 (Privately Placed Funds Offered Primarily Abroad) of OSC Rule 35-502 -- Non Resident Advisers (Rule 35-502).

5. The Funds may, as a part of their investment program, invest in commodity futures contracts and commodity futures options primarily traded on commodity futures exchanges outside Canada and primarily cleared through clearing corporations outside Canada.

6. The Applicant is, or in the future may be, an investment adviser for the Funds. As the investment adviser for the Funds, the Applicant is or will be 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.

7. Paragraph 22(1)(b) of the CFA prohibits a person or company from acting as an adviser unless the person or company is registered as an adviser under the CFA, or is registered as a partner or an officer of a registered adviser and is acting on behalf of a registered adviser. Under the CFA, "adviser" means a person or company engaging in or holding himself, herself or itself out as engaging in the business of advising others as to trading in "contracts", and "contracts" means commodity futures contracts and commodity futures options.

8. By acting as an adviser to the Funds directly on investing in commodity futures contracts and commodity futures options primarily traded on commodity futures exchanges outside Canada and primarily cleared through clearing corporations outside Canada, the Applicant will be providing advice to Ontario investors with respect to commodity futures contracts and commodity futures options and, in the absence of being granted the requested relief, would be required to register as advisers under the CFA.

9. There is presently no rule under the CFA that provides an exemption from the adviser registration requirement in paragraph 22(1)(b) of the CFA for a person or company acting as an adviser in respect of commodity futures options and commodity futures contracts that is similar to the exemption from the adviser registration requirement in section 25(1)(c) of the OSA for acting as an adviser (as defined in the OSA) in respect of securities that is provided under section 7.10 of Rule 35-502.

10. As would be required under section 7.10 of Rule 35-502, securities of the Funds are, or will be:

(a) primarily offered outside of Canada;

(b) only distributed in Ontario through one or more registrants under the OSA; and

(c) distributed in Ontario in reliance upon an exemption from the prospectus requirements of the OSA.

11. The Applicant, where required, is or will be appropriately 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. In particular, the Applicant is not currently registered, and is not required to be registered, with the U.S. Securities and Exchange Commission (the SEC), the U.S. Commodity Futures Trading Commission (the CFTC), the National Futures Association (the NFA) or under any applicable legislation of its principal jurisdiction.

12. All of the Funds issue securities which are offered primarily abroad. None of the Funds has any intention of becoming a reporting issuer in Ontario or in any other Canadian jurisdiction.

13. Prior to purchasing any securities in one or more of the Funds, all 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 relevant Fund or the Applicant (or the individual representatives of the Applicant) advising the relevant Fund, because such entity is resident outside of Canada and all or substantially all of its assets are situated outside of Canada; and

(ii) a statement that the Applicant advising the relevant Fund is not, or will not be, registered with or licensed by any regulatory authority in Canada and, accordingly, the protections available to clients of a registered adviser under the OSA and the CFA will not be available to purchasers of securities of the relevant Fund.

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 is exempted from the requirements of paragraph 22(1)(b) of the CFA in respect of acting as an adviser in connection with any one or more of the Funds, for a further period of three years, provided that at the relevant time that such activities are engaged in:

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

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

(c) securities of the Funds are:

(i) primarily offered outside of Canada,

(ii) only distributed in Ontario through one or more registrants under the OSA; and

(iii) 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 7.10 of Rule 35-502; and

(d) prior to purchasing any securities in one or more of the Funds, all investors in the Funds who are Ontario residents received disclosure that includes:

(i) a statement that there may be difficulty in enforcing any legal rights against the relevant Fund or the Applicant (or the individual representatives of the Applicant) advising the relevant Fund, because such entity is resident outside of Canada and all or substantially all of its assets are situated outside of Canada; and

(ii) a statement that the Applicant advising the relevant Fund is not, or will not be, registered with or licensed by any regulatory authority in Canada and, accordingly, the protections available to clients of a registered adviser under the OSA and the CFA will not be available to purchasers of securities of the relevant Fund.

March 30, 2007