Spectrum RRSP European Growth Fund et al.

Headnote

Investment by RSP fund in securities of another mutual fund that is under commonmanagement for specified purpose exempted from the reporting requirements and self-dealing prohibitions of clauses 111(2)(a), 111(3) and clauses 117(a) and (d).

Investment by the RSP Fund in forward contracts issued by related counterparties or itsaffiliates exempted from the requirements of clause 111(2)(c) and 118(2)(a), subject ofspecified conditions.

Status Cited

Securities Act (Ontario), R.S.O. 1990 c.S.5, as am., 111(2)(b), 111(2)(c), 117(1)(a),1117(1)(d), 118(2)(a) and 121(2)(a).

WHEREAS the local securities regulatory authority or regulator (the "DecisionMaker") in each of the provinces of British Columbia, Alberta, Saskatchewan, Ontario,Nova Scotia and Newfoundland (the "Jurisdictions") has received an application (the"Application") from Spectrum Investment Management Limited ("SIM"), the RSP Fundsand Managers Fund (collectively, the "Top Funds") and the Bottom Funds (definedbelow) for a decision pursuant to the securities legislation of the Jurisdictions (the"Legislation") that:

1. the restrictions contained in the Legislation prohibiting a mutual fund fromknowingly making and holding an investment in a person or company in whichthe mutual fund, alone or together with one or more related mutual funds, is asubstantial securityholder shall not apply in respect of certain investments to bemade by the Top Funds in their corresponding Bottom Funds;

2. the requirements contained in the Legislation requiring a management companyto file a report relating to a purchase or sale of securities between the mutualfund and any related person or company, or any transaction in which, byarrangement other than an arrangement relating to insider trading in portfoliosecurities, the mutual fund is a joint participant with one or more of its relatedpersons or companies, shall not apply in respect of certain investments to bemade by the Top Funds in their corresponding Bottom Funds; and

3. the requirements contained in the Legislation prohibiting the portfolio manager(or in the case of the Securities Act (British Columbia), the mutual fund orresponsible person) from knowingly causing an investment portfolio managed byit (the mutual fund) to invest in the securities of an issuer in which a responsibleperson is an officer or director unless the specific fact is disclosed to the client, ifapplicable, and the written consent of the client to the investment is obtainedbefore the purchase shall not apply in respect of certain investments to be madeby the Top Funds in their applicable Bottom Funds.

The Legislation outlined above in paragraphs 1, 2 and 3 will be referred to in thisDecision Document as the "Applicable Legislation";

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 throughout this Decision Document, the term "ReferenceFund(s)" shall mean Spectrum European Growth Fund when used in connection withSpectrum RRSP European Growth Fund, Spectrum Global Financial Services Fundwhen used in connection with Spectrum RRSP Global Financial Services Fund, andSpectrum Global Health Sciences Fund when used in connection with Spectrum RRSPGlobal Health Sciences Fund;

AND WHEREAS throughout this Decision Document, the term "UnderlyingFunds" shall mean Spectrum American Growth Fund, Spectrum European GrowthFund, Spectrum Global Growth Fund, Spectrum Asian Dynasty Fund, SpectrumEmerging Market Fund, Spectrum Global Financial Services Fund, Spectrum GlobalHealth Sciences Fund, Spectrum Global Telecommunications Fund and such otherfunds established by SIM as may be designated from time to time;

AND WHEREAS throughout this Decision Document, the Reference Funds andUnderlying Funds are collectively referred to as the "Bottom Funds";

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

1. Each of the Top Funds and Bottom Funds is or will be an open-ended mutualfund trust established under the laws of the Province of Ontario. SIM is acorporation established under the laws of the Province of Ontario and for each ofthe Top Funds and Bottom Funds will be the manager and promoter. The headoffice of SIM is in Toronto, Ontario.

2. Certain officers and/or directors of SIM are also individual trustees and/orofficers of the Bottom Funds.

3. The Top Funds and Bottom Funds are or will be reporting issuers. Thesecurities of each of the Top Funds and Bottom Funds are or will be qualifiedunder a simplified prospectus and annual information form (collectively, the"Prospectus") filed in all provinces and territories.

4. The Prospectus will disclose the investment objectives, investment strategies,risks and restrictions of the Top Funds and Bottom Funds.

5. Each of the RSP Funds seeks to achieve its investment objective while ensuringthat securities of the RSP Fund do not constitute "foreign property" for registeredretirement savings plans, registered retirement income funds, deferred profitsharing plans and similar plans ("Registered Plans").

6. To achieve its investment objective, each of the RSP Funds invests its assets insecurities such that its units will, in the opinion of tax counsel to the RSP Funds,be "qualified investments" for Registered Plans and will not constitute foreignproperty in a Registered Plan. This will primarily be achieved through theimplementation of a derivative strategy. However, the RSP Funds also intend toinvest a portion of their assets in securities of the Reference Funds or, in thecase of Spectrum RRSP World Growth Managers Fund (the "RSP ManagersFund"), in securities of the Underlying Funds. This investment by the RSPFunds will at all times be below the maximum foreign property limit prescribed forRegistered Plans (the "Permitted Limit").

7. The investment objectives of the Reference Funds, Underlying Funds and theManagers Fund are achieved through investment primarily in foreign securities.

8. The direct investments by the RSP Funds in the Reference Funds or UnderlyingFunds, as the case may be, will be within the Permitted Limit (the "PermittedRSP Fund Investment"). SIM and the RSP Funds will comply with the conditionsof this Decision in respect of such investments. The amount of direct investmentby each RSP Fund, except the RSP Managers Fund, in its correspondingReference Fund will be adjusted from time to time so that, except for transitionalcash, the aggregate of derivative exposure to, and direct investment in, theReference Fund will equal 100% of the assets of the RSP Fund. The amount ofdirect investment by the RSP Managers Fund in the Underlying Funds will beadjusted from time to time so that, except for transitional cash, the aggregate ofderivative exposure to, and direct investment in, the Underlying Funds, will equal100% of the assets of the RSP Managers Fund.

9. To achieve their investment objectives, the Managers Fund intends to investdirectly in, and the RSP Managers Fund intends to obtain direct and indirectexposure to, the securities of the Underlying Funds at a disclosed weighting("Target Weighting"), subject to a variation of 2.5% above or below such TargetWeighting to account for market fluctuations. SIM, the Managers Fund and theRSP Managers Fund will comply with the conditions of this Decision in respectof such investments.

10. The Bottom Funds are not currently invested in other mutual funds. The TopFunds will not invest in any mutual fund whose investment objective includesinvesting in other mutual funds.

11. Except to the extent evidenced by this Decision and specific approvals grantedby the Canadian securities administrators pursuant to National Instrument 81-102 Mutual Funds ("NI 81-102"), the investments by the Top Funds in theBottom Funds have been structured to comply with the investment restrictions ofthe Legislation and NI 81-102.

12. In the absence of the Decision, pursuant to the Legislation, each of the TopFunds is prohibited from (a) knowingly making an investment in a person orcompany in which the mutual fund, alone or together with one or more relatedmutual funds, is a substantial securityholder; and (b) knowingly holding aninvestment referred to in subsection (a) hereof. As a result, in the absence ofthis Decision a Top Fund would be required to divest itself of any investmentsreferred to in subsection (a) hereof.

13. In the absence of the Decision, the Legislation requires SIM to file a report onevery purchase or sale of securities of the Bottom Funds by the Top Funds.

14. In the absence of the Decision, SIM is prohibited from causing the Top Funds toinvest in the Bottom Funds, unless the fact that certain officers and/or directorsof SIM are also individual trustees and/or officers of the Bottom Funds isdisclosed to the Top Funds and, if applicable, the written consent of the TopFunds is obtained before the purchase of the Top Funds' securities.

15. The investment in, or redemption of, securities of the Bottom Funds by a TopFund represents the business judgment of "responsible persons" (as defined inthe Legislation) uninfluenced by considerations other than the best interests ofthe Top Fund.

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 the Legislation is that theApplicable Legislation shall not apply so as to prevent the Top Funds from investing in,or redeeming the securities of, the Bottom Funds and such investments do not requirefurther consent from or notice to securityholders of the Top Funds or the DecisionMakers.

PROVIDED IN EACH CASE THAT:

1. this 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 thatDecision Maker dealing with the matters in section 2.5 of NI 81-102; and

2. the foregoing Decision shall only apply in respect of investments in, ortransactions with, the Bottom Funds that are made by the Top Funds incompliance with the following conditions:

(a) the Top Funds and the Bottom Funds are under common managementand the Bottom Funds' securities are offered for sale in the jurisdiction ofthe Decision Maker pursuant to a prospectus which has been or will befiled with and accepted by the Decision Maker;

(b) each RSP Fund restricts its aggregate direct investment in itscorresponding Reference Fund or Underlying Funds, as the case may be,to a percentage of its assets that is within the Permitted Limit;

(c) the Managers Fund restricts its direct investment in, and the RSPManagers Fund restricts its direct and indirect exposure to, theUnderlying Funds to the Target Weightings, subject to a permittedvariation of 2.5% above or below such Target Weightings to account formarket fluctuations (the "Permitted Ranges");

(d) the Target Weightings which are disclosed in the Prospectus may not bechanged unless the Prospectus is amended or a new prospectus is filedand the securityholders of the Managers Fund and the RSP ManagersFund have either been given at least 60 days notice of the change or theprior approval of securityholders has been given to the change at ameeting of securityholders of the Managers Fund or the RSP ManagersFund called for that purpose;

(e) if at any time the Managers Fund's direct investment in, or the RSPManagers Fund's direct and indirect exposure to, the Underlying Fundsdeviate from the Permitted Ranges, the necessary changes are made inthe Managers Fund's or the RSP Managers Fund's investment portfolioas at the next valuation date in order to bring the Managers Fund's or theRSP Managers Fund's investment portfolio into conformity with the TargetWeightings;

(f) the investments by the Top Funds in the Bottom Funds are compatiblewith the fundamental investment objectives of the Top Funds;

(g) the Prospectus will describe the intent of the RSP Funds to invest in aspecified Reference Fund or the Underlying Funds, as applicable, theintent of the Managers Fund to invest in specified Underlying Funds, thenames of the Bottom Funds, the Target Weightings and the PermittedRanges;

(h) the RSP Funds may change the Permitted RSP Fund Investments only ifthey change their fundamental investment objectives in accordance withthe Legislation;

(i) no sales charges are payable by the Top Funds in relation to theirpurchases of securities of the Bottom Funds;

(j) there are compatible dates for the calculation of the net asset value of theTop Funds and the Bottom Funds, for the purpose of the issue andredemption of the securities of such mutual funds;

(k) no redemption fees or other charges are charged by the Bottom Funds inrespect of the redemption by the Top Funds of securities of the BottomFunds owned by the Top Funds;

(l) the arrangements between or in respect of the Top Funds and the BottomFunds are such as to avoid the duplication of management fees;

(m) no fees or charges of any sort are paid by a Top Fund or Bottom Fund orby the manager or principal distributor of such funds or by any affiliate orassociate of any of the foregoing entities to anyone in respect of a TopFund's purchase, holding or redemption of the securities of a BottomFund;

(n) in the event of the provision of any notice to securityholders of the BottomFunds, as required by the constating documents of the Bottom Funds orby the laws applicable to the Bottom Funds, such notice will also bedelivered to the securityholders of the Top Funds; all voting rightsattached to the securities of the Bottom Funds that are owned by the TopFunds will be passed through to the securityholders of the Top Funds; inthe event that a securityholders' meeting is called for a Bottom Fund, allof the disclosure and notice material prepared in connection with suchmeeting will be provided to the securityholders of the applicable Top Fundand such securityholders will be entitled to direct a representative of theTop Fund to vote that Top Fund's holding in the Bottom Funds inaccordance with their direction; and the representative of the Top Fundwill not be permitted to vote the Top Fund's holdings in the Bottom Fundexcept to the extent the securityholders of the Top Fund so direct;

(o) in addition to receiving the annual and, upon request, the semi-annualfinancial statements of the Top Funds, securityholders of the Top Fundswill receive the annual and, upon request, the semi-annual financialstatements of the Bottom Funds, as applicable, in either a combinedreport, containing the financial statements of both the Top Funds and theBottom Funds, or in a separate report containing the Bottom Funds'financial statements; and

(p) to the extent that the Top Funds and the Bottom Funds do not use acombined simplified prospectus and annual information form and financialstatements containing disclosure about the Top Funds and the BottomFunds, copies of the simplified prospectus, annual information form andannual and semi-annual financial statements relating to the Bottom Fundsmay be obtained upon request by a securityholder of a Top Fund asapplicable.

September 11th, 2000.

"Howard I. Wetston"      "Theresa McLeod"