Scotiabank (Ireland) Limited and Gam Diversity Inc. - MRRS Decision

Headnote

ApplicableOntario Statute

INTHE MATTER OF

THESECURITIES LEGISLATION OF

THEPROVINCES OF ALBERTA, BRITISH COLUMBIA, ONTARIO,

QUÉBECAND SASKATCHEWAN

AND

INTHE MATTER OF

THEMUTUAL RELIANCE REVIEW SYSTEM

FOREXEMPTIVE RELIEF APPLICATIONS

AND

INTHE MATTER OF

SCOTIABANK(IRELAND) LIMITED

AND

GAMDIVERSITY INC.

MRRSDECISION DOCUMENT

WHEREAS the local securities regulatory authority orregulator (the "Decision Maker") in each ofAlberta, British Columbia, Ontario, Québec and Saskatchewan(the "Jurisdictions") has received an applicationfrom Scotiabank (Ireland) Limited ("SIL") fora decision under the securities legislation of the Jurisdictions(the "Legislation") that the requirements containedin the Legislation with respect to take-over bids (the "Take-OverBids Requirements") and the requirements containedin the Legislation to be registered to trade in a security andto file and obtain a receipt for a preliminary prospectus anda prospectus (the "Registration and Prospectus Requirements")shall not apply to SIL, and such third parties with whom SILmay syndicate the transaction described herein (collectively,the "Put Providers") in connection with theissuance of put options (the "Put Options")to the shareholders of Gam Diversity Inc. ("GD")from time to time whereby common shares of GD would be transferredto the Put Providers upon the exercise of the Put Options;

ANDWHEREAS under the Mutual Reliance Review System forExemptive Relief Applications (the "System"),the Commission des valeurs mobilières du Québecis the principal regulator for this application;

ANDWHEREAS SIL has represented to the Decision Makersthat:

1.SIL is a corporation incorporated under the laws of the Republicof Ireland on December 17, 1969 as amended December 24, 1990.Identification number 30350. SIL's registered office is locatedat IFSC House, Custom House Quay, Dublin, Ireland. SIL is awholly-owned subsidiary of The Bank of Nova Scotia (the "BNS").SIL is not a reporting issuer or the equivalent in any jurisdictionin Canada.

2.GD is a corporation incorporated under the laws of the BritishVirgin Islands and is registered as a "Public Fund" pursuantto the provisions of the British Virgin Islands Mutual FundsAct, 1996 (as amended). GD's registered office is locatedat Craigmuir Chambers, P.O. Box 71, Road Town, Tortola, BritishVirgin Islands. The common shares of GD are listed and postedfor trading on the London Stock Exchange. GD is not a reportingissuer or the equivalent in any other jurisdiction in Canada.

3.GD operates as an investment company and, as of this date, ownsapproximately US$2.0 billion of assets comprised of approximately40 separate investments in 40 hedge funds or mutual funds ("InvesteeFunds") administered by independent parties. SIL hasbeen advised by GD that the authorized share capital of GD consistsof an unlimited number of US$ common shares. As of October 15,2001 GD had 4,311,630.29 common shares issued and outstanding.SIL has been advised by GD that GD currently has 1,553 shareholdersof whom 101 are resident Canadians and 1,452 are non-residentCanadians and that Canadian shareholders of GD currently holdapproximately 49% of the common shares.

4.Currently, GD shareholders have the right to require GD to redeemall or a portion of their common shares on a monthly basis inconsideration of a payment equal to the proportionate amountof GD's net asset value (the "Redemption Right").

5.The Put Options are being granted pursuant to an arrangement(the "Arrangement"), whereby pursuant to anoverall plan of action, a separate fund ("GD II")will be created for the non-Canadian shareholders of GD andtheir interests reorganized so that they are no longer shareholdersof GD and instead carry on their investments through GD II.GD II will succeed to a pro rata portion of the Investee Fundsof GD as of the effective date of the Arrangement, which isanticipated to be on or about November 30, 2001. Pursuant toan asset transfer agreement (the "Asset Transfer Agreement"),the remaining Investee Funds (the "Remaining InvesteeFunds") will be sold and transferred to the Put Providersand one or more third parties to be designated by the Put Providers.

6.GD will use the consideration it receives for the RemainingInvestee Funds sold pursuant to the Asset Transfer Agreementto purchase a note pursuant to a note purchase agreement (the"Note Purchase Agreement") from Bank of NovaScotia International Limited (Bahamas) ("BNIL"),a Bahamian company and wholly-owned subsidiary of BNS (the "Note").The principal features of the Note are as follows: (i) the Noteis due at the end of 15 years from the issue date or an earlierdate in the event of an early termination (the "MaturityDate"); (ii) until the Maturity Date, no amount shallbe paid on, or in respect of, the Note; (iii) following maturity,BNIL will satisfy its obligations under the Note by paying anamount equal to the net asset value of the Remaining InvesteeFunds or the amount realized by the Put Providers upon liquidationof the Remaining Investee Funds; and (iv) BNS will guaranteeBNIL's obligations under the Note. The Note Purchase Agreementwill contain certain covenants of GD requiring GD to maintainthe nature of its business, comply with securities laws andnot undertake any fundamental corporate changes (the "Covenants").

7.The Arrangement requires the affirmative vote of the majorityof GD shares represented at a special meeting of shareholdersto be held on or about November 28, 2001. Shareholders of GDwho do not wish to take part in the Arrangement have the rightto exercise their Redemption Rights prior to the Effective Date.GD shareholders will be mailed an information circular in formsatisfactory to the London Stock Exchange that will set fortha description of the Arrangement and related transactions. BNILand BNS may syndicate the rights and obligations described aboverelating to the Note with a financial institution having a Standardand Poor's rating not inferior to that of BNS. Such syndicationwill be on substantially the same terms and conditions as thosedescribed above. The syndication may take the form of the otherfinancial institution replacing BNIL as issuer of part of theNote.

8.Upon completion of the Arrangement, GD will withdraw the listingof its common shares from the London Stock Exchange which willtake effect on or about December 3, 2001.

9.The Put Options will arise as a result of incorporating intoone or more contracts (the "Put Option Agreements")between Global Asset Management Limited ("GAM"),the global manager of the Investee Funds, or any successor thereof,and the Put Providers or affiliates thereof, "third party benefits"to GD shareholders in accordance with applicable laws of theUnited Kingdom. The Put Options are not transferable and aregranted only for the benefit of persons who are GD shareholderswhile such persons are GD shareholders. The Put Options willprovide continued liquidity for the shareholders of GD fromtime to time after the Arrangement, but in an altered form.As already noted, the Note due to GD would not pay anythinguntil the Maturity Date and, therefore, GD would not have fundsavailable to redeem its common shares pursuant to the RedemptionRights as presently constituted. In order to maintain the sameliquidity for GD shareholders had the Arrangement not takenplace, the Put Options will be granted and pursuant to the PutOptions GD shareholders will have the right to sell their commonshares of GD to the Put Providers for a price based upon thenet asset value of GD on a per share basis, which will dependmainly on the value of the Note, which, in turn, will dependon the net asset value of the Remaining Investee Funds whichprice shall be calculated as follows:

Total Assets of GD - Total Liabilities of GD

---------------------------------------------------------------

Number of Shares of GD Issued and Outstanding

10.The Put Providers will, pursuant to a voting agreement withGD, until the Maturity Date, abstain from voting on any matterthat comes before the shareholders of GD with the sole exceptionof matters which if passed would result in a breach of the Covenants.

ANDWHEREAS under the System, this MRRS Decision Documentevidences the decision of each Decision Maker (collectively,the "Decision");

ANDWHEREAS each of the Decision Makers is satisfied thatthe test contained in the Legislation that provides the DecisionMaker with the jurisdiction to make the Decision has been met;

The Decision of the Decision Makers under the Legislation isthat:

1.The Take-Over Bid Requirements shall not apply to the grantor exercise of Put Options by the Put Providers to the shareholdersof GD, from time to time, provided that at the time of the grantGD is not a reporting issuer in any Province of Canada and,after the delisting of the GD common shares from the LondonStock Exchange on or about December 3, 2001, there is no publishedmarket for its shares.

2.The Registration and Prospectus Requirements shall not applyto the grant or distribution of Put Options made by the PutProviders to GAM for the benefit of shareholders of GD, fromtime to time.

November30, 2001.

"GuyLemoine"       "Viateur Gagnon"