Fidelity Investments Canada Limited - MRRS Decision

Headnote

Headnote

Mutual Reliance Review system for Exemptive Relief Application -- exemptive relief from the prospectus and registration requirements in connection with automatic conversion of securities of mutual funds previously sold on a deferred sales charge basis to securities sold on an initial sales charge (ISC) basis to permit investors to benefit from the lower fee schedule on ISC securities.

Applicable Ontario Statutory Provisions

Securities Act R.S.O 1990, c. S.5, as am., ss, 25, 53 and 74(1).

December 23, 2004

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

BRITISH COLUMBIA, ALBERTA, SASKATCHEWAN, MANITOBA, ONTARIO,

NEW BRUNSWICK, NOVA SCOTIA, PRINCE EDWARD ISLAND,

NEWFOUNDLAND AND LABRADOR, NORTHWEST TERRITORIES, YUKON AND

NUNAVUT

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEW SYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

FIDELITY INVESTMENTS CANADA LIMITED

("FIDELITY")

MRRS DECISION DOCUMENT

WHEREAS the securities regulatory authority (the "Decision Maker") in each of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, Northwest Territories, Yukon Territory and Nunavut Territory (the "Jurisdictions") has received an application from Fidelity as manager of the mutual funds listed in Schedule "A" hereto (the "Funds") for a decision by each Decision Maker (collectively, the "Decision") under the securities legislation of the Jurisdictions (the "Legislation") that the following provisions of the Legislation (the "Applicable Legislation") shall not apply to the Funds or Fidelity in respect of the automatic conversion of securities of the Funds sold prior to January 10, 2005 on a deferred sales charge ("DSC") basis to securities sold on an initial sales change ("ISC") basis:

1. the restrictions contained in the Legislation that prohibit a company from trading in a security unless it is registered as a dealer; and

2. the restrictions contained in the Legislation that prohibit a trade in a security unless a preliminary prospectus and a prospectus have been filed and a receipt therefore obtained.

AND WHEREAS pursuant to the Mutual Reliance Review System for Exemptive Relief applications (the "System"), the Ontario Securities Commission is the principal regulator for this application;

AND WHEREAS Fidelity has represented to the Decision Makers that:

1) Fidelity is a corporation amalgamated under the laws of the Province of Ontario and having its head office in Toronto, Ontario.

2) Fidelity is the trustee, manager and principal distributor of those Funds which were established as mutual fund trusts (the "Trust Funds") and the manager and principal distributor of those Funds that are classes of shares of Fidelity Capital Structure Corp. (the "Corporate Funds").

3) Fidelity is registered as a mutual funds dealer (or the equivalent) and as an advisor in the categories of investment counsel and portfolio manager (or the equivalent) in each of the Jurisdictions. Fidelity is also registered as a commodity trading manager under the Commodity Futures Act (Ontario).

4) The Funds are qualified for distribution in all of the Provinces and Territories of Canada pursuant to simplified prospectuses and annual information forms dated May 28, 2004 and October 18, 2004 as amended and restated on December 3, 2004.

5) The Funds are reporting issuers in each of the Provinces and Territories of Canada where such status exists and are not in default of any requirements of the securities act or regulations in each of the Provinces and Territories of Canada.

6) The Trust Funds offer Series A, F and O securities and, in respect of some of the Trust Funds, also Series T securities. The Corporate Funds only offer Series A and Series F securities.

7) The Series A and Series T securities of the Funds are offered on a DSC and ISC basis. Under the ISC purchase option investors pay a commission to their dealer at the time they purchase securities, while under the DSC purchase option no commission is paid by the investor at the time of purchase, but investors are required to pay a redemption fee if they redeem their securities within 6 years from the date of purchase.

8) Commencing January 10, 2005 (the "Implementation Date"), Fidelity is making changes ("Changes") to the Funds. The Changes include:

(a) a reduction in the management fees and operating expenses charged on securities sold on an ISC basis (which will be lower than those charged on securities sold on a DSC basis), and

(b) the redesignation of DSC securities to ISC securities after investors have held them for a period of 7 years so that investors in the DSC securities will also receive the benefit of the lower fees and expenses of the ISC securities.

9) For purposes of implementing the Changes, effective from the Implementation Date:

(a) new Series B and Series S securities will be available for purchase and will be sold only on an ISC basis;

(b) existing Series A and Series T securities, sold on an ISC basis, will be redesignated as Series B and Series S securities, respectively;

(c) Series A and Series T securities will only be available for purchase on a DSC basis, other than for Series A securities issued to members of employer specified group savings plans; and

(d) the attributes of the Series A and Series T securities purchased prior to the Implementation Date will be changed by making them automatically convertible to Series B and Series S securities, respectively, of the same Funds once investors have held their investments for a period of 7 years. These conversions are referred to as "Automatic Conversions".

10) Notice of the Changes were contained in a Press Release and Material Change Report issued and filed by Fidelity on November 24, 2004 and details will be included with the December 31, 2004 Fidelity client account statements. Fidelity is consulting with dealers about the Changes in anticipation of the Implementation Date and they will be in a position to advise investors of the Changes. The Changes are also reflected in the amended and restated simplified prospectuses and annual information forms of the Funds dated December 3, 2004.

11) There will be no increase in charges to investors who continue to hold Series A and Series T securities that were purchased on a DSC basis as a result of the Changes.

12) Implementation of the Changes will have no adverse tax consequences on investors.

13) In the absence of this Decision, the Automatic Conversions are not capable of being implemented without compliance with the Applicable Legislation.

AND WHEREAS pursuant to the system this MRRS decision document evidences the Decision of each Decision Maker;

AND WHEREAS each of the Decision Makers is satisfied that the test contained in the Legislation that provides the Decision Maker with Jurisdiction to make the Decision has been met;

AND WHEREAS the Decision Makers are of the opinion that it would not be prejudicial to the public interest to make the Decision;

THE DECISION of the Decision Makers pursuant to the Legislation is that the Funds and Fidelity are exempt from the registration and prospectus requirements set out in the Applicable Legislation in connection with the Automatic Conversions.

SCHEDULE A

FIDELITY FUNDS

Trust Funds:

Corporate Funds: