Bridgewater Associates, LP

Headnote

MI 11-102 -- relief granted from margin rate applicable to U.S. money market mutual funds in calculation of market risk in Form 31-103F1 -- margin rate for funds qualified for distribution in Canada is 5%, while funds qualified for distribution in U.S. is 100% -- similar regulation of money market funds -- NI 31-103.

Applicable Legislative Provisions

Multilateral Instrument 11-102 Passport System, s. 4.7.

National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations, ss. 12.1, 15.

December 14, 2012

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO

(the Principal Jurisdiction)

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

BRIDGEWATER ASSOCIATES, LP

(the Filer)

DECISION

Background

The Principal Regulator (as defined below) in the Principal Jurisdiction has received an application from the Filer for a decision under section 15.1 of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103) for relief from the requirement in section 12.1 of NI 31-103 that the Filer calculate its excess working capital using Form 31-103F1 (Form F1) only to the extent that the Filer be permitted to apply the same margin rate to its investments in money market mutual funds qualified for sale by prospectus in the United States of America (the U.S.) as applies to investments in money market mutual funds qualified for sale by prospectus in a province or territory of Canada when calculating market risk pursuant to Line 9 of Form F1 (the Exemption Sought).

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

(a) the Ontario Securities Commission is the principal regulator (the OSC or 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 each of British Columbia and Québec (together with Ontario, the Jurisdictions).

Interpretation

Defined terms contained in NI 31-103 and MI 11-102 have the same meanings in this decision (the Decision) unless they are otherwise defined in this Decision.

Representations

This Decision is based on the following facts represented by the Filer.

1. The Filer is a limited partnership established under the laws of the State of Delaware in the U.S. with its head office located in Westport, Connecticut.

2. The Filer is registered as an adviser in the category of portfolio manager in each of the Jurisdictions and is not a reporting issuer in any Jurisdiction.

3. The Filer is engaged in advising in respect of the buying and selling of securities, primarily to institutional investors. The Filer is registered with the U.S. Securities and Exchange Commission (the SEC) as an investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the 1940 Act), a commodity trading adviser and commodity pool operator with the U.S. Commodity Futures Trading Commission. The Filer also provides financial services in Australia, and relies on an exemption from the requirement to hold an Australian financial services license under the Australian Financial Services licensing regime in respect of the financial services it provides. In Canada, the Filer is registered as an adviser in the category of portfolio manager in Ontario, British Columbia and Québec and as an adviser in the category of commodity trading manager in Ontario.

4. The Filer may invest certain of its cash balances in money market mutual funds qualified for sale by prospectus in the U.S., specifically money market mutual funds which are registered investment companies under the Investment Company Act of 1940, as amended (the Investment Company Act) and which comply with Rule 2a-7 thereunder (Rule 2a-7).

5. Under Schedule 1 of Form F1, the margin rate required for an investment in the securities of a money market mutual fund qualified for sale by prospectus in a province or territory of Canada is 5% of the market value of such investment for the purposes of Line 9 of Form F1.

6. Under Schedule 1 of Form F1, the margin rate required for an investment in the securities of a money market mutual fund qualified for sale by prospectus only in the U.S. is 100% of the market value of such investment for the purposes of Line 9 of the Form F1.

7. From a cash management perspective, it would not be prudent for the Filer to invest its cash balances directly in U.S. money market instruments instead of investing in money market mutual funds qualified for sale by prospectus in the U.S. and, therefore, be subject to a lower margin rate because of the following reasons:

(i) the Filer would have to invest in a multitude of money market instruments to achieve the diversity that the money market mutual funds it invests in provides;

(ii) money market instruments have varying degrees of liquidity and penalties may be incurred if an instrument is disposed of before it matures; and

(iii) directly investing in money market instruments is more time consuming and most likely, more costly, than investing in money market funds, without any meaningful benefit.

8. It would also not be prudent for the Filer to invest its cash balances in money market mutual funds qualified for sale by prospectus in a province or territory of Canada because of the following reasons:

(i) there are only a limited number of U.S. money market mutual funds that are qualified by prospectus for sale by prospectus in a province or territory of Canada;

(ii) the Filer is a U.S. entity and cannot access U.S. money market mutual funds that are qualified for sale by prospectus in a province or territory of Canada as directly and as easily as U.S. money market mutual funds that are qualified for sale by prospectus in the U.S.;

(iii) the Filer would need to develop the necessary relationships with Canadian money market fund issuers;

(iv) investment in U.S. money market mutual funds that are qualified for sale by prospectus in a province or territory of Canada would be more costly than investment in U.S. money market mutual funds that are qualified for sale by prospectus in the U.S; and

(v) the Filer could be subject to cross-border tax issues if it were to invest in U.S. money market mutual funds that are qualified for sale by prospectus in a province or territory of Canada as a U.S. entity.

9. The regulatory oversight and the quality of investments held by a money market mutual fund qualified for sale by prospectus in each of the U.S. and a province or territory of Canada is similar. In particular, Rule 2a-7 sets out requirements dealing with portfolio maturity, quality, diversification and liquidity, which are similar to requirements under National Instrument 81-102 Mutual Funds (NI 81-102).

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 Exemption Sought is granted so long as:

(a) any money market mutual fund invested in by the Filer is qualified for sale by prospectus in the U.S. as a result of being a registered investment company under the Investment Company Act, and complies with Rule 2a-7;

(b) the requirements for money market mutual funds under Rule 2a-7 or any successor rule or legislation are similar to the requirements for Canadian money market funds qualified for sale by prospectus under NI 81-102 or any successor rule or legislation; and

(c) the Filer is registered with the SEC as an investment adviser under the 1940 Act.