Cartier Mutual Funds Inc.

Headnote

Representatives of mutual fund dealer exempted from the prohibition against paymentof commission/fee rebates to clients who switch investments from one mutual fund toanother mutual fund related to the dealer, subject to specified conditions.

National Instrument Cited

NI 81-105, ss. 4.2(1), ss. 7.1(1)(a) & (b), 9.1 (1) and Part 8

WHEREAS the local securities regulatory authority or regulator (the "DecisionMaker") in each of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, NewBrunswick, Nova Scotia, Prince Edward Island and Newfoundland, NorthwestTerritories, Yukon Territory and Nunavut (the "Jurisdictions") has received anapplication (the "Application") from Cartier Mutual Funds Inc. ("Cartier") on its on behalfand on behalf of its Affiliated Dealers and their representatives from time to time for adecision pursuant to Section 9.1 of National Instrument 81-105 ("NI 81-105") that theprohibition contained in clause 7.1(1)(b) of NI 81-105 against certain rebates ofredemption commissions or fees ("Rebate" or "Rebates") shall not apply to Rebatespaid by representatives of Affiliated Dealers (the "Representatives") to clients whoswitch their investments from third party mutual funds to mutual funds managed byCartier.

AND WHEREAS pursuant to the Mutual Reliance Review System for ExemptiveRelief Applications (the "System"), Québec was selected as the original principalregulator for this application, but Cartier has since withdrawn its application fromQuébec.

AND WHEREAS Ontario has been selected as the new principal regulator forthis application;

AND WHEREAS it has been represented by Cartier to the Decision Makers that:

1. Cartier is a subsidiary of BRM Capital Corporation ("BRM"). The head office ofCartier is located in the Province of Quebec. The Commission des valeursmobilières du Québec declared its lack of jurisdiction over this application.Ontario was selected as the new principal regulator on the basis that it is thejurisdiction, among all jurisdictions outside of Québec, with which Cartier has thenext most significant connection.

2. As of the date hereof, the following dealers are wholly-owned subsidiaries ofBRM:

Great Pacific Asset Management Co. Ltd.

Great Pacific Management Co. Ltd.

Heritage Financial Services Limited

Balanced Planning Investments Corporation

The Investment Centre Financial Corporation

Valeurs Mobiliéres Courvie Inc.

Valeurs Mobiliéres Dubeau Ltée.

(such dealers, together with any dealers that subsequently may becomeaffiliates of Cartier being herein referred to as the "Affiliated Dealers").

3. Cartier manages various mutual funds which as of the date hereof consist of thefollowing :

Cartier Bond Fund

Cartier Canadian Equity Fund

Cartier Canadian Asset Allocation fund

Cartier Global Equity Fund

Cartier Money Fund

Cartier Small Cap Canadian Equity Fund

Cartier U.S. Equity Fund

(such funds and any new mutual funds as may be managed by Cartier are hereinreferred to as the "Cartier Funds").

4. BRM is a subsidiary of Cartier Mutual Funds Limited Partnership.

5. The Affiliated Dealers are principal distributors of the Cartier Funds as well asparticipating dealers of unrelated mutual funds ("Third Party Products"). TheCartier Funds are primarily distributed through the Affiliated Dealers.

6. The Affiliated Dealers do not provide any incentive to the Representatives forrecommending to their clients securities of the Cartier Funds over those ofanother mutual fund family.

7. No Representative has an equity interest (as defined in NI 81-105) in any ofCartier Mutual Funds Limited Partnership, BRM, Cartier or an Affiliated Dealer.

8. This relief is being applied for in order to permit Rebates to be paid by theRepresentatives to clients who are switching from Third Party Products to CartierFunds.

AND WHEREAS pursuant to the System this MRRS Decision Documentevidences the decision of each Decision Maker (collectively, the "Decision");

AND WHEREAS each of the Decision Makers is satisfied that the test containedin the legislation that provides the Decision Maker with the jurisdiction to make theDecision has been met;

The Decision of the Decision Makers pursuant to section 9.1 of NI 81-105 is thatthe Representatives are exempt from the prohibitions on payment of Rebates containedin clause 7.1(1)(b) of NI 81-105 to the extent necessary to allow Representatives to payRebates to clients upon redemption of Third Party Products when the clients wish toswitch from Third Party Products to Cartier Funds.

PROVIDED IN RESPECT OF EACH SUCH PAYMENT THAT:

1. Cartier, the relevant Affiliated Dealer and the relevant Representative, as thecase may be, complies with the informed written consent provisions of section7.1(1)(a) and the disclosure and consent provisions of Part 8 of NI 81-105;

2. The Representatives will advise each client in advance that each such paymentproposed to be made available (i) will be available to the client regardless ofwhich mutual fund the client invests in; (ii) the amount of the payment may beonly to a maximum of the commission earned by the Representative on thepurchase; and (iii) Rebates will not be conditional on a purchase of securities ofa Cartier Fund;

3. The Representatives will not be subject to quotas (either express or implied) inrespect of the distribution of Cartier Funds; the Representatives will continue tobe entitled to offer other mutual funds to their clients; the Affiliated Dealers willcomply with the principal distributor practices set out in Section 4.2(1) of NI 81-105 and Cartier and the Affiliated Dealers will not provide an incentive (eitherexpress or implied) to any Representative or any Affiliated Dealer to recommendCartier Funds over other mutual funds;

4. The Representatives who are shareholders either of Cartier or of the AffiliatedDealers are expressly permitted by contract to sell other mutual funds withoutinfluence from Cartier or any affiliate, and other Representatives are and will inthe future be able to offer third party products without influence from Cartier orany affiliate;

5. The Representatives that provide Rebates will not be reimbursed directly orindirectly by Cartier or its affiliates in respect of Rebates on Cartier Funds; and

6. The Representatives are employed by or on contract with an Affiliated Dealerthat is registered in the jurisdiction in which the Rebate is paid.

AND PROVIDED FURTHER that this Decision shall cease to be operative withrespect to a Decision Maker following the entry into force of a rule of that DecisionMaker which replaces or amends section 7.1 of NI 81-105.

March 7^th, 2000.

"Howard I. Wetston"      "J. F. Howard"