BMO Investments Inc. et al. - MRRS Decision

Headnote

Exemption from the reporting requirements ofclause 117(1)(c) of the Securities Act (Ontario) provided thatcertain disclosure is made in the statement of portfolio transactionsfor each mutual fund.

Statutes Cited

Securities Act (Ontario), R.S.O. 1990 c. S.5,as am., 117(1)(c) and 117(2).

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

BMO INVESTMENTS INC.

GUARDIAN GROUP OF FUNDS LTD.

BMO HARRIS INVESTMENT MANAGEMENTINC.

BMO NESBITT BURNS INC.

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 "Application") fromBMO Investments Inc., Guardian Group of Funds Ltd., BMO HarrisInvestment Management Inc., and BMO Nesbitt Burns Inc. (the"BMO Group of Companies") for a decision (the "Decision")pursuant to the securities legislation of the Jurisdictions(the "Legislation") that the provisions of the Legislationrequiring a management company, or in British Columbia a mutualfund manager, to file a report, within thirty days after eachmonth end and in respect of each mutual fund to which it providesservices, relating to every purchase or sale effected by suchmutual fund through any related person or company with respectto which the related person or company received a fee eitherfrom the mutual fund or from the other party to the transactionor both (the "Reporting Requirement") not apply topurchases and sales effected by the Funds (as defined below)through BMO Nesbitt Burns Inc. ("BMONB") or BMO InvestorLineInc." ("BMOILI") and each Other Dealer (as definedbelow);

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 byeach of the BMO Group of Companies to the Decision Makers that:

1. Each of the BMO Group of Companies is acorporation established under the laws of Canada with itshead office in Toronto, Ontario. Members of the BMO Groupof Companies act as managers of a group of mutual funds thatcurrently consists of the funds set out in Appendix "A"hereto (such funds, together with such other funds managedby a member of the BMO Group of Companies from time to time,being herein referred to as the "Funds").

2. The Funds are open-ended investment trustsor mutual fund corporations established under the laws ofthe Province of Ontario or the laws of Canada. Other thanas set out in Appendix "A", each Fund is a reportingissuer in each of the provinces and territories of Canadawhere units (the "Units") of the Fund are sold pursuantto a prospectus accepted by the decision maker in such jurisdictions.

3. Each of the BMO Group of Companies, includingBMONB and BMOILI, is a direct or indirect subsidiary of Bankof Montreal. BMONB and BMOILI are related companies to theFunds under the Legislation;

4. BMONB is a federal corporation and is registeredas a broker and investment dealer (equities, options, managedaccounts and futures). BMOILI is a federal corporation andis registered as an investment dealer (equities and options).

5. As disclosed in the annual informationforms of the Funds, portfolio transactions of the Funds maybe executed by BMONB or by BMOILI, provided such transactionsare made on terms and conditions comparable to those offeredby unrelated brokers and dealers. The BMO Group of Companiesmay enter into similar arrangements with other related registeredinvestment dealers (upon entering into such arrangement witha member of the BMO Group of Companies, such dealer is referredto as an "Other Dealer").

6. The individual portfolio advisors of eachof the Funds have discretion to allocate brokerage businessin any manner that they believe to be in a Fund's best interests.The purchase or sale of securities effected through BMONB,BMOILI or an Other Dealer (each a "Related Company")represents the business judgement of responsible persons uninfluencedby considerations other than the best interests of the Funds.In allocating brokerage, consideration is given to commissionrates and to research, execution and other services offered.

7. Each of the BMO Group of Companies havedisclosed and will continue to disclose in the Funds' annualfinancial statements the amount of brokerage commissions paidby each Fund on trades with Related Companies.

8. In the absence of this Decision, the Legislationrequires each of the BMO Group of Companies to file a reporton a monthly basis in respect of every purchase or sale ofsecurities effected through a Related Company stating theissuer of the securities purchased or sold, the class or designationof the securities, the amount or number of securities, theconsideration, the name of the related company receiving thefee, the name of the person that paid the fee to the relatedcompany and the amount of the fee received by the relatedcompany.

9. Through inadvertence, the BMO Group ofCompanies have not filed the reports required by the Legislationregarding the portfolio transactions executed through RelatedCompanies.

10. It would be costly and time consumingfor the BMO Group of Companies to provide the informationrequired by the Legislation on a monthly and segregated basis.

AND WHEREAS pursuant to the System thisMRRS Decision Document evidences the decision of each DecisionMaker;

AND UPON each of the Decision Makersbeing 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 pursuantto the Legislation is that effective as of the date of thisDecision, the Reporting Requirement shall not apply so as torequire the BMO Group of Companies to file a report on a monthlybasis in respect of every purchase and sale of securities bya Fund which is effected through a Related Company and withrespect to which a Related Company received a fee either fromthe Fund or from the other party to the transaction or both,

PROVIDED THAT the Decision shall onlyapply if the statement of portfolio transactions prepared andfiled for each Fund in accordance with the Legislation discloses,in respect of every class or designation of securities of anissuer bought or sold during the period to which the statementof portfolio transactions relates:

(a) the name of each Related Company;

(b) the amount of fees paid to each RelatedCompany; and

(c) the person or company that paid the fees.

August 6, 2002.

"Howard I. Wetston"                    "RobertW. Korthals"

APPENDIX "A"

FUNDS

{*}reportingissuers in each of the provinces only and not the territories