Man Canada AHL Alpha Fund

Headnote

NP 11-203 -- Seed capital relief and Weekly NAV calculation relief from National Instrument 81-104 Commodity Pool and National Instrument 81-106 -- Investment Fund Continuous Disclosure for a commodity pool fund not to be subject to the seed capital requirement with conditions, and for the commodity pool fund to calculate its net asset value weekly with conditions, due to the nature of the fund's indirect exposure to another commodity pool that published its net asset value on a weekly basis.

Applicable Legislative Provisions

National Instrument 81-106 Investment Fund Continuous Disclosure, s. 14.2

National Instrument 81-104 Commodity Pools, ss. 3.2(2)(a) and 10.1.

April 30, 2009

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO (THE "JURISDICTION")

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

MAN CANADA AHL ALPHA FUND

(the "Filer")

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction of the principal regulator (the "Legislation") for exemptive relief from:

(a) section 14.2(3)(b) of NI 81-106, which requires the net asset value ("NAV") of an investment fund that uses specified derivatives to be calculated at least once every business day ("NAV Relief"); and

(b) section 3.2(2)(a) of NI 81-104, which requires a commodity pool to have invested in it at all times securities that were issued pursuant to paragraph 3.2(1)(a) of NI 81-104 and had an aggregate issue price of $50,000 ("Seed Capital Relief"),

(herein collectively referred to as the "Requested Relief").

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application),

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

(b) the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, Québec, New Brunswick, Nova Scotia, Newfoundland and Labrador, Prince Edward Island, Northwest Territories, Nunavut and the Yukon (the "Passport Jurisdictions").

Interpretation

Terms defined in National Instrument 14-101 Definitions and Ml 11-102 have the same meaning if used in this decision, unless otherwise defined.

Representations

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

1. The Filer is an investment trust established under the laws of the Province of Ontario pursuant to a declaration of trust.

2. Man Investments Canada Corp (the "Manager") is the manager, trustee and promoter of the Filer. The Manager will be responsible for providing or arranging for the provision of administrative services required by the Filer. The principal office of the Manager is located at Suite 1202, 70 York Street, Toronto, Ontario M5J 1S9.

3. The Filer filed the Preliminary Prospectus dated March 17, 2009 on SEDAR with respect to the Offering of Class A Units and Class F Units, a receipt for which was issued by the Commission on March 18, 2009.

4. The Filer is a commodity pool as such term is defined in section 1.1 of NI 81-104, in that the Filer has adopted fundamental investment objectives that permit the Filer to gain exposure to or use or invest in specified derivatives in a manner that is not permitted under National Instrument 81-102 -- Mutual Filers ("NI 81-102").

5. The Filer is subject to NI 81-102 and the Securities Act (Ontario), subject to any exemptions therefrom that may be granted by securities regulatory authorities and subject to the exemptions therefrom granted to commodity pools in NI 81-104.

6. Although the Filer will be a mutual fund trust for purposes of the Income Tax Act (Canada), its operation will differ from that of a conventional mutual fund as the Filer does not intend to continuously offer Units once the Filer is out of primary distribution.

7. The Filer's investment objective is to provide investors with the opportunity to realize capital appreciation through investment returns that have a low correlation to traditional forms of stock and bond securities. The investment objective of the Filer, as well as its investment strategy, is disclosed in the Preliminary Prospectus.

8. To pursue its investment objective, the Filer will obtain exposure to a diversified portfolio of financial instruments across a range of global markets including currencies, bonds, stocks, energy, metals and interest rates (the "AHL Portfolio") to be managed using a multi-strategy trading program that invests in futures, options and forward contracts, swaps and other financial derivative instruments both on and off-exchange.

9. The Filer will obtain exposure to the AHL Portfolio through one or more forward purchase and sale agreements (collectively, the "Forward Agreement") to be entered into with one or more Canadian chartered banks and/or their affiliates (collectively, the "Counterparty").

10. The AHL Portfolio will be held as a segregated portfolio of AHL Investment Strategies SPC (the "AHL SPC"), a segregated portfolio company incorporated with limited liability in the Cayman Islands and registered as a segregated portfolio company under the Companies Law (2007 Revision).

11. The return to the Filer, and consequently to holders of Units, will depend on the return of a series of Canadian dollar denominated redeemable notes (the "AHL SPC Notes") issued by the AHL SPC in respect of the segregated account holding the AHL Portfolio. The aggregate value at any time of the outstanding AHL SPC Notes will equal the aggregate net asset value of the AHL Portfolio.

12. The Filer will invest substantially all of the proceeds of the Offering in a portfolio of non-dividend paying common shares of Canadian public companies (the "Common Share Portfolio"). Pursuant to the Forward Agreement, the Counterparty will agree to pay to the Filer on the scheduled settlement date of the Forward Agreement, as the purchase price for the Common Share Portfolio, an amount equal to the net redemption proceeds of the AHL SPC Notes, subject to any applicable costs owing to the Counterparty under the Forward Agreement.

13. The return to the Fund, and consequently to holders of Units, will by virtue of the Forward Agreement depend on the redemption value of the AHL SPC Notes that is based on the performance of the AHL Portfolio, which calculates and reports NAV on a weekly basis. The NAV per Unit of each class will depend on the NAV of the AHL SPC Notes.

14. The Class F Units are designed for fee-based accounts. The only differences between Class A Units and Class F Units are the management fees payable to the Manager with respect to each class of Units, the redemption fee payable in connection with redemptions of Units and the service fee, being 0.50% per annum of the NAV per Class A Unit, plus applicable taxes, which is only payable in respect of Class A Units. The NAV per Unit of each class will not be the same as a result of the different fees allocable to each class of Units.

15. The Filer does not intend to list the Units on any stock exchange. Units of each class may be redeemed on a weekly basis for a redemption price equal to 100% of the NAV per Unit of that class less, if applicable, the redemption fee payable in connection with early redemptions of Units, subject to the Filer's right to suspend redemptions in certain circumstances.

16. Under section 14.2(3)(b) of NI 81-106, an investment fund that is a reporting issuer that uses or holds specified derivatives, such as the Filer intends to do, must calculate its net asset value on a daily basis.

17. The Filer proposes to calculate its net asset value as at the Monday (the "Valuation Date") of each week and as at December 31 in each year (if not otherwise a Valuation Date).

18. The Preliminary Prospectus discloses, and the final prospectus of the Filer will disclose, that the NAV per Unit of each class of Units will be calculated and made available to the financial press for publication on a weekly basis. The Manager will post the net asset value per Unit of each class of Units on its website at www.maninvestments.com.

Decision

The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.

The decision of the principal regulator under the Legislation is that the Requested Relief is granted provided that:

Seed Capital Relief

(a) the Manager may not redeem any of its initial investment of $50,000 in the Filer until $5.0 million has been received by the Filer from persons or companies other than the persons and companies referred to in paragraph 3.2(l)(a) of NI 81-104;

(b) the basis on which the Manager may redeem any of its initial investment of $50,000 from the Filer will be disclosed in the prospectus of the Filer;

(c) if, after the Manager redeems its initial investment of $50,000 in the Filer in accordance with condition (a) above, the value of the Units subscribed for by investors other than the persons and companies referred to in paragraph 3.2(l)(a) of NI 81-104 drops below $5.0 million for more than 30 consecutive days, the Manager will, unless the Filer is in the process of being dissolved or terminated, reinvest $50,000 in the Filer and maintain that investment until condition (a) is again satisfied;

(d) the Manager will at all times maintain excess working capital of a minimum of $100,000;

NAV Relief

(e) the NAV per Unit of each class of Units will be calculated and made available to the financial press for publication on a weekly basis. The Manager will post the net asset value per Unit of each class of Units on its website at www.maninvestments.com; and

(f) if the NAV of the AHL SPC Notes is published more frequently than weekly, the Filer must calculate its NAV on the same frequency.