First Asset Pipes & Power Income Fund and First Asset Investment Management Inc.

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Investment fund and its manager exempted from the dealer registration requirement for certain limited trading activities to be carried out by these parties in connection with rights offering by the investment fund -- The limited trading activities involve: i) the forwarding of a rights offering prospectus, and the distribution of rights to acquire securities of the fund, to existing holders of fund securities, and ii) the subsequent distribution of securities to holders of these rights, upon their exercise of the rights, through an appropriately registered dealer.

Applicable Legislative Provisions

Securities Act, R.S.O., c. S.5, as am., ss. 25(1), 74(1)

Multilateral Instrument 11-102 Passport System, s. 4.7(1)

National Instrument 45-106 Prospectus and Registration Exemptions, ss. 3.1, 3.42, 8.5.

February 10, 2012

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

FIRST ASSET PIPES & POWER INCOME FUND

(the Fund) AND

FIRST ASSET INVESTMENT MANAGEMENT INC.

(the Manager, together with the Fund, the Filers)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filers for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) exempting the Filers from the dealer registration requirement in the Legislation in respect of certain trades (the Rights Offering Activities) to be carried out by the Manager, on behalf of the Fund, in connection with a proposed distribution (theRights Offering) of rights (the Rights) to acquire trust units of the Fund (the Units), to be made in Ontario and each of the Passport Jurisdictions (as defined below) pursuant to a rights offering prospectus (the Rights Offering Prospectus).

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

1. the Ontario Securities Commission is the principal regulator for this application; and

2. each 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 by the Filers in British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador (collectively, thePassport Jurisdictions).

Interpretation

Terms defined in National Instrument 14-101 Definitions and MI 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 Filers:

1. The Fund is a closed-end investment trust established under the laws of the Jurisdiction. The Fund is an investment fund. The Fund is a reporting issuer in the Jurisdiction and in each of the Passport Jurisdictions. The Fund is not in default of the securities legislation of any jurisdiction.

2. The Manager acts as the investment fund manager for the Fund. The Manager is registered as an investment fund manager under the Legislation.

3. The head office of each of the Filers is located in Toronto, Ontario.

4. The authorized capital of the Fund consists of an unlimited number of Units. The Units are listed for trading on the Toronto Stock Exchange (the TSX).

5. The Fund is subject to certain investment restrictions that, among other things, limit the equity securities and other securities that may be acquired for its investment portfolio.

6. The investment objectives of the Fund are to provide holders of Units with the benefits of high monthly cash distributions together with the opportunity for capital appreciation by investing in an actively managed portfolio of issuers that derive their income from the distribution of oil, gas or natural gas, as well as those issuers that service and support such industries.

7. The Fund filed a final long form prospectus dated January 27, 2005, under the securities legislation of each of the Passport Jurisdictions for the initial issuance of Units. On September 28, 2006, the Fund completed a rights offering under which it issued additional Units pursuant to a rights offering circular dated August 15, 2006. The Fund also completed two warrant offerings on July 23, 2009 and July 23, 2010 under which it issued additional Units pursuant to two short form warrant offering prospectuses dated February 18, 2009 and February 10, 2010, respectively. On March 24, 2011, the Fund completed a rights offering under which it issued additional Units pursuant to a rights offering prospectus dated February 14, 2011.

8. The Fund does not engage in a continuous distribution of its securities.

9. Under the Rights Offering, each holder of Units, as at a specified record date, will be entitled to receive, for no consideration, one Right for each Unit held by the holder. Three Rights entitle the holder to subscribe for one Unit upon payment to the Fund of a subscription price, to be specified in the Rights Offering Prospectus, prior to the expiry of the Rights. Holders of Rights in Canada are permitted to sell or transfer their Rights instead of exercising their Rights to subscribe for Units. Holders of Rights who exercise their Rights may subscribe pro rata for additional Units pursuant to an additional subscription privilege. The term of the Rights is expected to be three months or less.

10. The Fund has applied, or will apply, to list on the TSX the Rights to be distributed under the Rights Offering, including the Units issuable upon the exercise thereof.

11. The Rights Offering Activities will consist of:

(a) the distribution of the Rights Offering Prospectus and the issuance of Rights to holders of Units (as at the record date specified in the Rights Offering Prospectus), after the Rights Offering Prospectus has been filed, and receipts obtained, under the Legislation and the securities legislation of each of the Passport Jurisdictions; and

(b) the distribution of Units to holders of the Rights, upon the exercise of the Rights by the holders, through a registered dealer that is registered in a category that permits the registered dealer to make such a distribution.

12. The Fund is in the business of trading by virtue of its portfolio investing and trading activities. As a result, the capital raising activities of the Fund, including the Rights Offering Activities, would require each of the Filers to register as a dealer in the absence of this decision (or another available exemption from the dealer registration requirement).

13. Section 8.5 of National Instrument 45-106 Prospectus and Registration Exemptions (NI 45-106) provides that, after March 26, 2010, the exemptions from the dealer registration requirements set out in sections 3.1 [Rights offering] and section 3.42 [Conversion, exchange, or exercise] of NI 45-106 no longer apply.

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 Fund, and the Manager acting on behalf of the Fund, are not subject to the dealer registration requirement in respect of the Rights Offering Activities.