Putnam Investments Inc. et al. - MRRS Decision

Headnote

Mutual Review Reliance System for Exemptive Relief Applications -- Approval of change of control of manager -- Funds and fund manager part of an impending change of control of manager involving its parent and other companies.

Applicable Legislative Provisions

National Instrument 81-102 Mutual Funds, ss. 5.7(1)(a), 5.5.(2).

May 18, 2007

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

BRITISH COLUMBIA, ALBERTA, SASKATCHEWAN,

MANITOBA, ONTARIO, QUÉBEC, NEW BRUNSWICK,

NOVA SCOTIA, PRINCE EDWARD ISLAND,

NEWFOUNDLAND AND LABRADOR,

YUKON TERRITORY, NORTHWEST TERRITORIES

AND NUNAVUT TERRITORY

(the "Jurisdictions")

AND

IN THE MATTER OF THE

MUTUAL RELIANCE REVIEW SYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

PUTNAM INVESTMENTS INC.,

PUTNAM CANADIAN BALANCED FUND,

PUTNAM CANADIAN BOND FUND,

PUTNAM CANADIAN EQUITY FUND,

PUTNAM CANADIAN EQUITY GROWTH FUND,

PUTNAM CANADIAN MONEY MARKET FUND,

PUTNAM GLOBAL EQUITY FUND,

PUTNAM U.S. VALUE FUND,

PUTNAM U.S. VOYAGER FUND AND

PUTNAM INTERNATIONAL EQUITY FUND

AND

GREAT-WEST LIFECO INC.

(the "Filer" or "GWL")

MRRS DECISION DOCUMENT

Background

The local securities regulatory authority or regulator (the "Decision Maker") in each of the Jurisdictions has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the "Legislation") for approval of the Putnam Change In Control (defined below) pursuant to subsection 5.5(2) of National Instrument 81-102 Mutual Funds ("NI 81-102").

Under the Mutual Reliance Review System for Exemptive Relief Applications:

(a) the Ontario Securities Commission is the principal regulator for this application; and

(b) this MRRS decision document evidences the decision of each Decision Maker.

Interpretation

Defined terms contained in National Instrument 14-101 - Definitions have the same meaning in this decision unless they are defined in this decision.

Representations

This decision is based on the following facts represented by the Filer:

1. Putnam Investments Inc. ("Putnam") is a corporation incorporated under the Business Corporations Act (Ontario) with its head office in Toronto, Ontario.

2. Putnam is manager, trustee and portfolio manager for Putnam Canadian Balanced Fund, Putnam Canadian Bond Fund, Putnam Canadian Equity Fund, Putnam Canadian Equity Growth Fund, Putnam Canadian Money Market Fund, Putnam Global Equity Fund, Putnam U.S. Value Fund, Putnam U.S. Voyager Fund and Putnam International Equity Fund (collectively the "Funds").

3. The Funds are: (i) mutual fund trusts created under the laws of Ontario under the provisions of a master declaration of trust dated March 14, 2002, as amended; (ii) reporting issuers in the Jurisdictions and distribute securities pursuant to a simplified prospectus and annual information form prepared in accordance with National Instrument 81-101 -- Mutual Fund Prospectus Disclosure; and (iii) subject to, among other laws and regulations, NI 81-102 and National Instrument 81-106 Investment Fund Continuous Disclosure.

4. On February 1, 2007, GWL (a subsidiary company of Power Financial Corporation ("Power Financial")) announced that it had signed an agreement (the "Proposed Transaction") to purchase Putnam Investments Trust ("Putnam Investments"). As Putnam is an indirect subsidiary company of Putnam Investments, there will occur a change in control of Putnam upon the closing of the Proposed Transaction when GWL becomes the new owner and parent company of Putnam Investments (the "Putnam Change In Control"). The expected closing date of the Proposed Transaction is May 31, 2007.

5. GWL, a TSX-listed company (TSX:GWO) and a member of the Power Financial group of companies, is a financial services holding company with interests in the life insurance, health insurance, retirement savings and reinsurance businesses. GWL and its subsidiaries carry on business primarily in Canada, the United States and Europe and have over C$197 billion in assets under management.

6. Power Financial is a holding company that holds substantial interests in the financial services industry through its controlling interest in GWL and in IGM Financial Inc. ("IGM"). IGM, in turn, owns Investment Planning Counsel Inc., Investors Group Inc. and Mackenzie Financial Corporation -- affiliated companies that, through various other subsidiary companies, have significant experience and market presence in Canada's mutual fund industry.

7. In connection with certain regulatory requirements applicable to the Funds:

a) a press release describing the Putnam Change in Control was issued by Putnam on February 9, 2007 and filed under SEDAR Project No. #1049701;

b) a material change report was filed on February 9, 2007 under SEDAR Project #1049700;

c) an amendment to the Funds' then current annual information form was filed on February 15, 2007 under SEDAR Project No. #891926; and

d) notice of the Putnam Change in Control was delivered to all unitholders of the Funds on or before March 31, 2007.

8. In respect of how the Proposed Transaction may affect the management and administration of the Funds:

a) there is no immediate plan to change the current officers and directors of Putnam or the individual members of Putnam's portfolio management team that is responsible for advising the Funds;

b) systems, back office, fund accounting and other administrative functions are expected to continue to be operated in the same manner as currently being used by the Funds; and

c) the management fees and operating expenses of the Funds will not change as a result of the Putnam Change In Control.

9. Officers and directors of GWL have the requisite integrity and experience as required under section 5.7(1)(a)(v) of NI 81-102.

Decision

Each of the Decision Makers is satisfied that the test contained in the Legislation that provides the Decision Maker with the jurisdiction to make the decision has been met.

The decision of the Decision Makers under the Legislation is that the Putnam Change In Control is hereby approved.