R American RSP Fund et al.

Headnote

Mutual Reliance Review System for Exemptive Relief Applications - Investment bymutual funds in securities of another mutual fund that is under common managementfor specified purposes excepted from the requirements of section 101, clause111(2)(b), and subsection 111(3), clauses 117(1)(a) and (d), subject to certainspecified conditions.

Statutes Cited

Securities Act (Ontario), R.S.O., c.S.5, as am. ss. 101, 104(2)(c), 111(2)(b), 111(3),113, 117(1)(a), 117(1)(d) and 117(2).

WHEREAS the Canadian securities regulatory authority or regulator (the "DecisionMaker") in each of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario andQuébec (the "Jurisdictions") has received an application from BLC-Edmond deRothschild Asset Management Inc. ("BLC-Rothschild"), as manager of the R AmericanRSP Fund, the R European RSP Fund, the R Asian RSP Fund, the R World Leaders RSPFund, the R Life & Health RSP Fund and the R Techno-Media RSP Fund (collectively, the"RSP Funds") and the R American Fund, the R European Fund, the R Asian Fund, theR World Leaders Fund, the R Life & Health Fund and the R Techno-Media Fund(collectively, the "Underlying Funds" and, together with the RSP Funds, the "Funds") fora decision pursuant to the securities legislation of the Jurisdictions (the "Legislation") thatthe following requirements and restrictions contained in the Legislation (the"Requirements") shall not apply in respect of certain investments to be made by the RSPFunds in the corresponding Underlying Funds:

1. the requirements contained in the Legislation for each RSP Fund and BLC-Rothschild (as manager) to issue a news release and file a report where theaggregate holdings by the RSP Fund of securities of its Underlying Fund exceedten percent of the outstanding securities of its Underlying Fund and the prohibitionto acquire or offer to acquire securities of its Underlying Fund pending the expiryof one business day from the date the report is filed;

2. the requirements contained in the Legislation for BLC-Rothschild to file a reportrelating to the purchase or sale of securities between an RSP Fund and any relatedperson or company, or transaction in which, by arrangement other than anarrangement relating to insider trading and portfolio securities, an RSP Fund is ajoint participant with one or more of its related persons or companies;

3. the prohibition contained in the Legislation for the RSP Funds to knowingly makeor hold an investment in a person or company in which the RSP Fund, alone ortogether with one or more related funds, is a substantial securityholder; and

4. the prohibition contained in the Legislation for the RSP Funds to knowingly makeor hold an investment in an issuer in which any company who is a substantialsecurityholder of the RSP Fund's management company, has a significant interest.

AND WHEREAS for the purpose of this Decision, reference to an Underlying Fundin relation to a particular RSP Fund shall mean the Underlying Fund bearing the samename, save for the addition of the acronym "RSP";

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 BLC-Rothschild has represented to the Decision Makers that:

1. BLC-Rothschild is a corporation incorporated under the laws of Canada. BLC-Rothschild will be the manager and promoter of each RSP Fund and eachUnderlying Fund. BLC-Rothschild's head office is located in Montreal, Québec.

2. The Underlying Funds and the RSP Funds are open-end mutual fund trustsestablished under the laws of Ontario and will be qualified for distribution in allJurisdictions under a simplified prospectus and annual information form(collectively, the "Prospectus").

3. Each Underlying Fund and each RSP Fund will be a reporting issuer under thesecurities laws of each of the Jurisdictions.

4. The Prospectus will contain disclosure with respect to the investment objective,investment practices and restrictions of each Fund. The investment objective ofeach RSP Fund is to achieve long term growth that is linked to the return of itsUnderlying Fund by investing in money market instruments, such as Bankers'Acceptances and Treasury Bills, and other securities, cash and bank deposits andby using forward contracts or other permitted derivatives based on the portfoliosecurities of its Underlying Fund or the units of its Underlying Fund. As part of itsinvestment practice, each RSP Fund intends to invest in units of its UnderlyingFund. All purchases of the Underlying Funds will be made through BLC-Rothschild.

5. Each RSP Fund will make investments such that its units will be "qualifiedinvestments" for registered retirement savings plans, registered retirement incomefunds and deferred profit sharing plans (collectively, the "Registered Plans") underthe Income Tax Act (Canada) (the "Tax Act") and will not constitute foreignproperty to a Registered Plan, based on the Funds' counsel's opinion.

6. The direct investment by an RSP Fund in units of its Underlying Fund (the"Permitted RSP Fund Investment") will be in an amount not to exceed the amountprescribed from time to time as the maximum permitted amount which may beinvested in foreign property under the Tax Act, without the imposition of tax underPart XI of the Tax Act (the "Foreign Property Maximum").

7. Except to the extent evidenced by this Decision and specific approvals grantedunder separate application by the Canadian securities administrators pursuant toNational Policy No. 39, the investments by an RSP Fund in its Underlying Fundhave been structured to comply with the investment restrictions of the Legislationand National Policy No. 39.

8. In the absence of this Decision, as soon as the aggregate holdings by an RSP Fundof securities of its Underlying Fund exceed 10% of the outstanding securities of theRSP Fund, BLC-Rothschild, and possibly the RSP Fund, would be required tocomply with the reporting and other requirements of the Legislation.

9. In the absence of this Decision, the Legislation would prohibit an RSP Fund from(a) knowingly making an investment in a person or company in which the mutualfund, alone or together with one or more related mutual funds, is a substantialsecurityholder; and (b) knowingly holding an investment referred to in subsection(a) above. As a result, in the absence of this Decision, an RSP Fund would berequired to divest itself of any investments referred to in subsection (a) above.

10. In the absence of this Decision, the Legislation would prohibit an RSP Fund from(a) knowingly making an investment in an issuer in which any company who is asubstantial security holder of the RSP Funds' management company, has asignificant interest; and (b) knowingly holding an investment referred to insubsection (a) above. As a result, in the absence of this Decision, an RSP Fundwould be required to divest itself of any investments referred to in subsection (a)above.

11. In the absence of this Decision, the Legislation would require BLC-Rothschild to filea report of every purchase or sale of units of an Underlying Fund by an RSP Fund.

12. Investments in and redemptions of securities of an Underlying Fund by an RSPFund will represent the business judgment of responsible persons uninfluenced byconsiderations other than the best interests of the RSP Fund.

AND WHEREAS, pursuant to the System, this Decision Document evidences thedecision of each Decision Maker (collectively, the "Decision").

AND WHEREAS each Decision Maker is satisfied that the test contained in theLegislation that provides the Decision Maker with the jurisdiction to make the Decision hasbeen met;

THE DECISION of the Decision Makers pursuant to the Legislation is that theRequirements shall not apply to the purchase and sale by each RSP Fund of units of itsUnderlying Fund provided:

That the Decision shall apply only to purchases and sales by the RSP Funds ofunits of the Underlying Funds made in compliance with the following conditions:

1. The RSP Funds and the Underlying Funds are under common management and theunits of the Underlying Funds are offered for sale in the jurisdiction of the DecisionMaker pursuant to a prospectus which has been filed with and accepted by theDecision Maker.

2. Each RSP Fund restricts the aggregate amount of its direct investment in units ofits Underlying Fund to a percentage of its assets that is within the Foreign PropertyMaximum.

3. The investment by an RSP Fund in units of its Underlying Fund is compatible withthe fundamental investment objectives of the RSP Fund.

4. The Prospectus discloses the intent of each RSP Fund to invest in units of itsUnderlying Fund.

5. Each RSP Fund may change the Permitted RSP Fund Investments if it changes itsfundamental investment objective in accordance with the Legislation.

6. The arrangements between or in respect of the Funds are such as to avoid theduplication of management fees.

7. No sales charges are payable by an RSP Fund in relation to the purchase of unitsof its Underlying Fund.

8. No redemption fees or other charges are charged by an Underlying Fund in respectof the redemption by an RSP Fund of units of the Underlying Fund owned by it.

9. No fees or charges of any sort are paid by the RSP Funds or by the UnderlyingFunds or by the manager or principal distributor of the RSP Funds or the UnderlyingFunds or by an affiliate or associate of any of the foregoing entities to anyone inrespect of the RSP Funds' investment in, or redemption of, the units of theUnderlying Funds.

10. In the event of the provision of any notice to unitholders of an Underlying Fund, asrequired by the constating documents of an Underlying Fund or by the lawsapplicable to an Underlying Fund, such notice will also be delivered to theunitholders of the applicable RSP Fund. All voting rights attached to the units of anUnderlying Fund which are owned by an RSP Fund will be passed through to theunitholders of that RSP Fund. In the event that a unitholders' meeting is called foran Underlying Fund, all of the disclosure and notice material prepared inconnection with such meeting will be provided to each unitholder of the applicableRSP Fund and each unitholder will be entitled to direct a representative of the RSPFund to vote that unitholder's proportion of the RSP Fund's holding in its UnderlyingFund in accordance with their direction. The representative of the RSP Fund willnot be permitted to vote the RSP Fund's holdings in its Underlying Fund, exceptto the extent the unitholders of the RSP Fund so direct.

11. There are compatible dates for the calculation of the net asset value of an RSPFund and its Underlying Fund for the purpose of the issue and redemption of thesecurities of such Funds.

12. To the extent that the RSP Funds and the Underlying Funds do not use a combinedreport containing both the RSP Funds and the Underlying Funds' financialstatements, in addition to receiving the annual and, upon request, the semi-annualfinancial statements of the RSP Funds, the unitholders of an RSP Fund will receivethe annual and, upon request, the semi-annual financial statements of theapplicable Underlying Fund.

13. To the extent that the RSP Funds and the Underlying Funds do not use a combinedsimplified prospectus and annual information form containing disclosure about theRSP Funds and the Underlying Funds, copies of the simplified prospectus andannual information form relating to an Underlying Fund may be obtained uponrequest by a unitholder of the applicable RSP Fund.

THE DECISION, as it relates to the jurisdiction of a Decision maker, will terminateone year after the publication in final form of any legislation or rule of that Decision makerdealing with matters in clause 2.04 (4)(b) of National Policy No. 39.

January 11^th, 2000.

"J. A. Geller"       "Robert W. Korthals"