BMO Nesbitt Burns Inc. - MRRS Decision

IN THE MATTER OF

THE CANADIAN SECURITIES LEGISLATION OF BRITISH COLUMBIA,

ALBERTA, SASKATCHEWAN, MANITOBA, ONTARIO, NEW BRUNSWICK,

NOVA SCOTIA, PRINCE EDWARD ISLAND, NEWFOUNDLAND,

NORTHWEST TERRITORIES, YUKON TERRITORY AND NUNAVUT TERRITORY

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEW SYSTEM FOR

EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

NATIONAL INSTRUMENT NI 81-105 MUTUAL FUND SALES PRACTICES (the "NATIONAL INSTRUMENT")

AND

IN THE MATTER OF

BMO NESBITT BURNS INC.

MRRS DECISION DOCUMENT

WHEREAS the Canadian securities regulatory authority or regulator (the "Decision Maker") in each of theprovinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince EdwardIsland and Newfoundland and the Northwest Territories, Yukon Territory and Nunavut Territory (the "Jurisdictions") hasreceived an application (the "Application") from BMO Nesbitt Burns Inc. ("Nesbitt") for a decision pursuant to Section 9.1of the National Instrument that Section 8.2(3) and 8.2(4) of the National Instrument shall not apply with respect to theacquisition and holding of an equity interest in Clarington Funds Inc. ("Clarington") by two registered representatives ofNesbitt in Alberta;

AND WHEREAS pursuant to the Mutual Reliance Review System for Exemptive Relief Applications (the"System"), the Ontario Securities Commission is the principal regulator for this application;

AND WHEREAS Nesbitt has represented to the Decision Makers that:

1. Nesbitt is registered as an investment dealer in Alberta, and is registered or may become registeredin the future, as an investment dealer in all other provinces and territories of Canada. Nesbitt has, ormay in the near future have, representatives at offices located in all such jurisdictions.

2. Two registered representatives of Nesbitt resident in Alberta and associated with a branch of Nesbittin Calgary (the "Alberta Representatives") wish to acquire, in the aggregate, less than 1.00% of theoutstanding shares of Clarington (the "Clarington Equity Interest"). The Alberta Representatives arenot officers, directors or branch managers of Nesbitt and do not otherwise have a position of influenceover other registered representatives of Nesbitt.

3. Clarington is a member of the organization (as that term is defined in the National Instrument) of theClarington group of mutual funds (the "Clarington Funds"). The Clarington Funds are sold in allprovinces and territories of Canada under a simplified prospectus.

4. No registered representative of Nesbitt holds units of Clarington or has an equity interest (as definedin the National Instrument) of any other member of the organization of the Clarington Funds. Uponcompletion of the proposed transactions the Alberta Representatives will hold shares of Clarington,but will not have an equity interest in any other member of the organization of the Clarington Funds.

5. Subsections 8.2(1) and (2) of the National Instrument require the Clarington Funds to disclose theClarington Equity Interest held by the Alberta Representatives in its next renewal simplifiedprospectus. The current simplified prospectus contains disclosure which complies with therequirements of the National Instrument and Clarington will ensure that the disclosure also appearsin any future simplified prospectuses for the Clarington Funds, subject to any changes as may berequired by any of the securities regulatory authorities as part of the prospectus review process.

6. Subsection 8.2(3) of the National Instrument would require each registered representative of Nesbittin all applicable jurisdictions of Canada to give those clients who wish to acquire securities of theClarington Funds a disclosure statement outlining each Alberta Representative's Clarington EquityInterest. Subsection 8.2(4) of the National Instrument would require each registered representativeof Nesbitt to obtain a consent from any client wishing to acquire securities of the Clarington Funds.

7. Nesbitt seeks an exemption from subsections 8.2(3) and (4) so that only the Alberta Representativesand Nesbitt itself will be required to give the required disclosure statement to clients of the AlbertaRepresentatives who wish to acquire securities of the Clarington Funds. Similarly, only the AlbertaRepresentatives and Nesbitt will obtain an applicable client's consent before finalizing any acquisitionby the client of securities of the Clarington Funds.

8. Having regard to the size of the Clarington Equity Interest, each Alberta Representative's employmentstatus with Nesbitt and the large number of representatives of Nesbitt located across Canada, Nesbittsubmits that compliance with subsections 8.2(3) and (4) would be unduly onerous and is notnecessary in order to meet the policy underpinning section 8.2.

AND WHEREAS pursuant to the System this MRRS Decision Document evidences the decision of eachDecision Maker (collectively, the "Decision");

AND WHEREAS each of the Decision Makers is satisfied that the test contained in the National Instrument thatprovides the Decision Maker with the jurisdiction to make the Decision has been met;

THE DECISION of the Decision Makers pursuant to section 9.1 of the National Instrument is that Nesbitt andits registered representatives are exempt from Sections 8.2(3) and 8.2(4) of the National Instrument with respect to theClarington Equity Interests, provided that:

(i) each Alberta Representative complies with the requirements of subsection 8.2(3) and subsection8.2(4) of the National Instrument;

(ii) Nesbitt complies with the requirements of subsection 8.2(3) and subsection 8.2(4) of the NationalInstrument in connection with clients of Nesbitt who deal with each Alberta Representative; and

(iii) in the event an Alberta Representative assumes a position of authority or supervision over otherregistered representatives of Nesbitt, those other registered representatives and Nesbitt comply withsubsection 8.2(3) and subsection 8.2(4) of the National Instrument.

April 26, 2001.

"Paul M. Moore" "Stephen N. Adams"