BMO Harris Investment Management Inc. - MRRS Decision
INTHE MATTER OF
THESECURITIES LEGISLATION OF
BRITISHCOLUMBIA, ALBERTA, SASKATCHEWAN, ONTARIO
NOVA SCOTIA AND NEWFOUNDLAND AND LABRADOR
AND
INTHE MATTER OF
THEMUTUAL RELIANCE REVIEW SYSTEM
FOREXEMPTIVE RELIEF APPLICATIONS
AND
INTHE MATTER OF
BMOHARRIS INVESTMENT MANAGEMENT INC. AND
THETRUST COMPANY OF BANK OF MONTREAL
MRRSDECISION DOCUMENT
WHEREASthe local securities regulatory authority or regulator(the "Decision Maker") in each of British Columbia, Alberta,Saskatchewan, Ontario, Nova Scotia and Newfoundland and Labrador(the "Jurisdictions") has received an application from BMO HarrisInvestment Management Inc. (the "Manager") and The Trust Companyof Bank of Montreal ("Trustco"), manager and trustee, respectively,of the Monogram Canadian Growth Equity Fund II, Monogram CanadianGrowth Equity Fund III, Monogram Canadian Growth Equity FundIV, Monogram Canadian Conservative Equity Fund II, MonogramCanadian Conservative Equity Fund III and Monogram CanadianIncome Equity Fund II (collectively, the "Terminating Funds")and Monogram Canadian Growth Equity Fund, Monogram CanadianConservative Equity Fund and Monogram Canadian Income EquityFund (collectively, the "Continuing Funds", the TerminatingFunds and Continuing Funds, collectively, the "Funds") for adecision (the "Decision") pursuant to the securities legislation(the "Legislation") of the Jurisdictions that, for the purposesof the mutual fund merger transactions described below (the"Mergers"), the Manager, Trustco and the Funds be exempt fromthe requirements provided for by the Legislation with respectto:
(a)the requirements contained in the Legislation requiring a managementcompany or a mutual fund manager to file reports in connectionwith every transaction of purchase or sale of securities betweena mutual fund and any related person or company; and (b)the restrictions contained in the Legislation prohibiting a portfoliomanager or where applicable, a mutual fund, from knowingly causinga mutual fund to purchase or sell the securities of any issuerfrom or to the account of a responsible person or any associateof a responsible person or the portfolio manager; ANDWHEREAS the above restrictions and requirements of theLegislation shall be referred to in this Decision Document asthe "Applicable Legislation"; ANDWHEREAS pursuant to the Mutual Reliance Review Systemfor Exemptive Relief Applications (the "System") the Ontario SecuritiesCommission is the Principal Jurisdiction for this application; ANDWHEREAS the Manager has represented to the Decision Makersthat: 1.Each Fund is an open-end mutual fund trust established under thelaws of Ontario by a declaration of trust. 2.The Funds are utilized by the Manager as part of its portfoliomanagement on behalf of discretionary account clients. To date,units of the Funds are distributed to investors in reliance onexemptions from the registration and prospectus requirements ofthe Legislation, including the exemption for purchasers purchasingas principal if the aggregate acquisition cost is not less thana prescribed amount. The Manager intends to qualify the securitiesof the Continuing Funds on or about the effective date of theMergers. Certain other mutual funds that are used by the Manageras part of its discretionary management program are already qualifiedby prospectus. 3.The Manager wishes to merge the Monogram Canadian Growth EquityFund II, Monogram Canadian Growth Equity Fund III and MonogramCanadian Growth Equity Fund IV into Monogram Canadian Growth EquityFund; merge the Monogram Canadian Conservative Equity Fund IIand Monogram Canadian Conservative Equity Fund III into the MonogramCanadian Conservative Equity Fund; and merge the Monogram CanadianIncome Equity Fund II into the Monogram Canadian Income EquityFund. 4.The Mergers would occur through the implementation of the followingsteps: (a)each Terminating Fund will transfer all of its assets (which wouldconsist of portfolio securities and cash), less an amount requiredto satisfy the liabilities of the Terminating Fund, to its correspondingContinuing Fund in exchange for units of that Continuing Fundhaving an aggregate value equivalent to the net value of the assetstransferred; (b)immediately following the above-noted transfer, each TerminatingFund will distribute to its unitholders its portfolio securities,which would consist solely of units of the applicable ContinuingFund, so that following such distribution the unitholders in eachTerminating Fund become direct unitholders in the applicable ContinuingFund; (c)thereafter, each Terminating Fund will be terminated. 5.Each Terminating Fund will merge with the appropriate ContinuingFund on February 28, 2002 (the "Merger Date") following whichthe merged Funds will be distributed in each province and territoryof Canada pursuant to a single combined prospectus and annualinformation form. 6.No sales charges will be payable in connection with the acquisitionby a Continuing Fund of the investment portfolio of the applicableTerminating Fund and all costs specifically relating to effectingthe Mergers will be borne by the Manager and will not be chargedto the Terminating Funds, the Continuing Funds or their respectiveunitholders. 7.The investment objectives of each of the Terminating Funds arethe same as or similar to those of the Continuing Fund with whichthe Terminating Fund is to merge. Therefore, the investment portfolioof the Terminating Funds that are to be acquired by the ContinuingFunds are appropriate investments for the Continuing Funds and,following completion of the Merger, the Continuing Funds willbe invested in accordance with the investment objectives. 8.The net asset value of each Terminating Fund and Continuing Fundis calculated on a daily basis for the purposes of issuing andredeeming securities of the Funds, and there are no material differencesin the valuation methods of each of the Funds. 9.Prior written notice of the Mergers has been provided to the unitholdersin the Funds. 10.The unitholders in each Terminating Fund and Continuing Fund willhave the right to redeem their units for cash up to the closeof business on the business day before the Merger Date. 11.In the absence of this Decision, the Applicable Legislation requiresthe Manager to file a report in connection with the purchase byeach Terminating Fund of units of its corresponding ContinuingFund as the Terminating Funds and Continuing Funds are "relatedpersons" pursuant to the Legislation. 12.In the absence of this Decision, the Manager is prohibited fromknowingly causing a Continuing Fund to buy the portfolio securitiesof its corresponding Terminating Fund as Trustco is a "responsibleperson" and the Continuing Funds are "associates" of Trustco pursuantto the Legislation. ANDWHEREAS under the System, this MRRS Decision Documentevidences the decision of each Decision Maker; 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; THEDECISION of the Decision Makers pursuant to the Legislationis that the Applicable Legislation does not apply to the Mergers,provided that immediately following the Mergers, all assets ofthe Terminating Funds, being units of the Continuing Funds, aredistributed to the unitholders in such Terminating Fund, and thatthe Terminating Fund is thereafter wound-up without further noticeto unitholders. February7, 2002. "RobertW. Korthals" "H. Lorne Morphy"