Nova Canadian Equity Fund et al.

Headnote

MRRS for Exemptive Relief Applications - Extension of lapse date to permit theintegration of the operation and administration of three groups of mutual funds and theconsolidation of the disclosure materials of such funds.

Statutes Cited

Securities Act, R.S.O. 1990, c. S. 5, as am., ss 62(1), 62(2), and 62(5)

WHEREAS the Canadian securities regulatory authority or regulator (the"Decision Maker") in each of the Provinces of British Columbia, Alberta, Saskatchewan,Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island andNewfoundland (the "Jurisdictions") has received an application from Nova BancorpInvestment Management Ltd. (the "Applicant") on behalf of the Nova Funds for adecision pursuant to the securities legislation of the Jurisdictions (the "Legislation") thatthe time limits prescribed by the Legislation for filing a simplified prospectus and annualinformation form in respect of the Nova Funds be extended;

AND WHEREAS pursuant to the Mutual Reliance Review System for ExemptiveRelief Applications (the "System"), the Ontario Securities Commission is the principalregulator for this application:

AND WHEREAS the Applicant has represented to the Decision Makers that:

1. The Applicant is the manager of the Nova Funds and is an indirect subsidiary ofNova Bancorp Group (Canada) Ltd.

2. The Nova Funds comprise five open-end mutual fund trusts, each of which wasestablished under the laws of the Province of Ontario.

3. Each of the Nova Funds is a reporting issuer in the Jurisdictions, and is not indefault of any requirements of the Legislation or the rules or regulations madethereunder.

4. Navigator Fund Company Ltd. ("Navigator"), an affiliate of the Applicant, is themanager of the Navigator Funds (hereinafter defined) which comprise ten open-end mutual fund trusts, some of which were established under the laws of theProvince of Manitoba and some of which were established under the laws of theProvince of British Columbia. The funds are the Navigator American ValueInvestment Fund, Navigator Asia-Pacific Fund, Navigator Canadian FocusedGrowth Portfolio, Navigator Canadian Growth Fund, Navigator Canadian IncomeFund, Navigator Canadian Technology Fund, Navigator European Equity Fund,Navigator Japan Fund, Navigator Money Market Fund and Navigator SAMI Fund(collectively, the "Navigator Funds").

5. On June 8, 2000, the arrangement among Strategic Value Corporation, NovaBancorp Wealth Management Inc. and Nova Bancorp Group (Canada) Ltd. wascompleted, as a result of which StrategicNova Funds Management Inc. (thennamed SVC O'Donnell Funds Management Inc.) became an indirect subsidiaryof Nova Bancorp Group (Canada) Ltd. and an affiliate of the Applicant.

6. StrategicNova Funds Management Inc. ("StrategicNova"), an affiliate of theApplicant, is the manager of the SVC O'Donnell Funds (hereinafter defined)which comprise thirty open-end mutual funds of which five are mutual fundcorporations incorporated under the federal laws of Canada and twenty-five aretrusts established under the laws of the Province of Ontario. The funds areStrategic Value American Equity Fund Ltd., Strategic Value Asia and EmergingMarkets Fund, Strategic Value Canadian Balanced Fund, Strategic ValueCanadian Equity Fund Ltd., Strategic Value Canadian Equity Value Fund,Strategic Value Canadian Small Companies Fund, Strategic ValueCommonwealth Fund Ltd., Strategic Value Dividend Fund Ltd., Strategic ValueEurope Fund, Strategic Value Europe RSP Fund, Strategic Value GlobalBalanced RSP Fund, Strategic Value Government Bond Fund, Strategic ValueIncome Fund, Strategic Value International Fund Ltd., Strategic Value MoneyMarket Fund, Strategic Value World Balanced Fund, Strategic Value WorldBalanced RSP Fund, O'Donnell American Sector Growth Fund, O'DonnellBalanced Fund, O'Donnell Canadian Emerging Growth Fund, O'DonnellCanadian Large-Cap Fund, O'Donnell Growth Fund, O'Donnell High IncomeFund, O'Donnell Money Market Fund, O'Donnell U.S. High Income Fund,O'Donnell U.S. Mid-Cap Fund, O'Donnell U.S. Mid-Cap RSP Fund, O'DonnellWorld Equity Fund, O'Donnell World Equity RSP Fund, O'Donnell WorldPrecious Metals Fund.

7. Each of the Nova Funds is qualified for distribution in the Jurisdictions by meansof a simplified prospectus and an annual information form dated June 15, 1999(the "Prospectus").

8. Pursuant to the Legislation and an MRRS Decision Document dated May 12,2000 in respect of the Nova Funds, the lapse date in the Jurisdictions for thedistribution of units under the Prospectus for the Nova Funds is August 24,2000.

9. Nova Bancorp Group (Canada) Ltd. and the Applicant, together with its otheraffiliates, Navigator and StrategicNova, are in the process of integrating theoperation and administration of the Nova Funds, the Navigator Funds and theSVC O'Donnell Funds and propose to consolidate the disclosure materials of theNova Funds with those of the Navigator Funds and the SVC O'Donnell Funds.The changes proposed to the operation and administration of such funds, whichare anticipated to make the Part A sections of the simplified prospectuses for thefunds substantially similar thus permitting the simplified prospectuses to beconsolidated under National Instrument 81-101, Mutual Fund ProspectusDisclosure include the change of managers of the Nova Funds and theNavigator Funds from the Applicant and Navigator, respectively, in each case totheir affiliate StrategicNova, the manager of the SVC O'Donnell Funds. In thecase of the Nova Funds, it is anticipated that such change will be effected on orabout August 15, 2000. In the case of the Navigator Funds, such change ofmanager requires not less than 90 days prior notice to unitholders under theconstating documents of the Navigator Funds. It is anticipated that such changeof manager will occur on or about November 4, 2000 upon the expiry of thenotice period to unitholders, unless the constating documents of the NavigatorFunds are amended with the approval of the unitholders to abridge such timeperiod. A proposed amendment to the constating documents of the NavigatorFunds to permit the manager of the Navigator Funds to be changed toStrategicNova without the expiry of the 90 day notice period is to be voted uponby unitholders of the Navigator Funds at meetings of such unitholders scheduledfor August 28, 2000. The relevant results of the unitholder meetings scheduledfor August 28, 2000 will be included in the renewal prospectus and annualinformation form for the Nova Funds.

10. The Applicant seeks to extend the lapse date for the Prospectus for the NovaFunds to October 31, 2000 in order to facilitate the simultaneous renewal of thesimplified prospectuses and annual information forms for all of the Nova Funds,the Navigator Funds and the SVC O'Donnell Funds, and thereby allow theunitholders of the Nova Funds, the Navigator Funds and the SVC O'DonnellFunds to benefit from the reduced costs attributable to the economies of scaleassociated with such a renewal.

11. A press release has been issued disclosing the forthcoming change of themanager of the Nova Funds and the matters that would be significant changes(as defined in National Instrument 81-102 Mutual Funds) for the Nova Fundsthat are being voted upon at unitholders meetings of the Nova Funds scheduledfor August 28, 2000. An amendment to the Prospectus for the Nova Funds willshortly be filed describing such matters. There have been no other significantchanges to the affairs of the Nova Funds since the date of the Prospectus whichrequires an amendment to the Prospectus and in respect of which anamendment to the simplified prospectus has not been prepared and filed inaccordance with the Legislation.

12. The Applicant will comply with the requirements in connection with theoccurrence of a significant change with respect to changes in the affairs of theNova Funds.

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

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

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

THE DECISION of the Decision Makers pursuant to the Legislation is that thetime limits provided by the Legislation as they apply to the distribution of units underthe Prospectus for the Nova Funds are hereby extended to the time limits that would beapplicable if the lapse date for the distribution of units under the Prospectus wasOctober 31, 2000.

August 21st, 2000.

"William R. Gazzard"