YMG Capital Management Inc. -ss. 74(1)

IN THE MATTER OF

THE SECURITIES ACT,

R.S.O. 1990, CHAPTER S.5, AS AMENDED

AND

IN THE MATTER OF

YMG CAPITAL MANAGEMENT INC.

RULING

(Subsection 74(1))

UPON the application of YMG Capital Management Inc. (the "Applicant"), on behalf of YMG Private WealthOpportunities Fund (the "Fund"), to the Ontario Securities Commission (the "Commission") for a ruling under subsection74(1) of the Securities Act, R.S.O. 1990, c. S.5, as amended, (the "Act"), that certain trades in securities on behalf ofaccounts that are fully managed by YMG Portfolio Managers (hereinafter defined) are not subject to section 53 of theAct;

AND UPON reading the application of the Applicant and the recommendation of the staff of the Commission;

AND UPON it being represented by the Applicant to the Commission that:

1. The Applicant is a corporation amalgamated under the Canada Business Corporations Act.

2. The Applicant is registered under the Act as an adviser in the categories of investment counsel and portfoliomanager and as a dealer in the categories of mutual fund dealer and limited market dealer and is not in defaultof any of its obligations as a registrant under the Act. The Applicant is also registered under the CommodityFutures Act as a commodity trading manager and is not in default of any of its obligations as a registrant underthe Commodity Futures Act.

3. The Applicant is the manager of the Fund pursuant to the Trust Agreement (hereinafter defined).

4. The Applicant, in its capacity as portfolio manager, fully manages the investment portfolios ("Fully ManagedAccounts") of certain clients, in Ontario, through the exercise of discretionary authority granted in writing bysuch clients, with full power, authority and discretion to, among other things, buy, sell or otherwise effecttransactions in securities as agent for the Fully Managed Accounts without requiring the client's expressconsent to a transaction. Responsibility for the Fully Managed Accounts is assigned by the applicant to certainpersons ("YMG Portfolio Managers") who are:

(a) officers of the Applicant; and

(b) registered under the Act as advisers in the category of portfolio manager.

5. The Fund is an unincorporated, open-end investment unit trust. The Fund has been established and isgoverned by a trust agreement made by the Applicant under Ontario law (the "Trust Agreement"), pursuant towhich The Royal Trust Company is the trustee and the Applicant is retained as the manager and is the principaldistributor of the units of the Fund (the "Fund Units").

6. The Fund is a "mutual fund in Ontario" as defined in subsection 1(1) of the Act and, as such, is required tocomply with the provisions of subsection 77(2) and sections 78 and 79 of the Act with respect to thepreparation, mailing to unitholders and filing with the Commission of interim and annual financial statements.

7. It is not intended that the Fund will become a "reporting issuer" as such term is defined in subsection 1(1) ofthe Act.

8. It is not intended that the Fund Units be listed on any exchange recognized by the Commission.

9. An investment in the Fund is represented by redeemable Fund Units, all of one class, which may be issued inunlimited number and each of which represents an undivided interest in the Fund's net assets.

10. Units of the Fund will be distributed as outlined in representation 4, above, on a continuous basis. Fund Unitsare non-transferable but may be redeemed at their net asset value upon the request of a unitholder inaccordance with the terms of the Trust Agreement.

11. In Ontario, the distribution of Fund Units is currently effected pursuant to statutory exemptions from the section53 prospectus requirement of the Act. Currently, in most cases, the statutory exemption relied upon forpurchases of Fund Units for Fully Managed Accounts is that contained in clause 71(1)(d) of the Act, whichrequires that an initial investment in Fund Units by a Fully Managed Account be in an amount not less than$150,000 (an "Initial Investment").

12. It is proposed that the YMG Portfolio Managers, when acting on behalf of any Fully Managed Account that hasmade an Initial Investment, be permitted to purchase additional Fund Units (the "Additional Units") without beingsubject to any minimum purchase amount.

AND UPON the Commission being satisfied that to so rule would not be prejudicial to the public interest;

IT IS RULED, pursuant to subsection 74(1) of the Act, that section 53 of the Act shall not apply to a distributionof Additional Units to a Fully Managed Account if the Additional Units being distributed have not previously been issued,provided that:

a. this ruling will terminate upon the publication in final form of any legislation, regulation or rule relatingto distributions of securities of pooled funds which applies to trades of Additional Units as describedin paragraph 12 above;

b. at the time of the acquisition of Additional Units, the Fully Managed Account holds Fund Units havingan aggregate acquisition cost or an aggregate net asset value of not less than $150,000;

c. at the time of the acquisition of Additional Units, the Applicant is registered under the Act as an adviserin the categories of investment counsel and portfolio manager and as a dealer in the categories ofmutual fund dealer and/or limited market dealer and such registrations are in good standing;

d. the YMG Portfolio Managers, at the time of acquisition of Additional Units, have full power, authorityand discretion, granted in writing, to buy, sell or otherwise effect transactions in securities as agentfor the Fully Managed Accounts managed by them; and

e. within 10 days following a trade in reliance on the exemption provided in this Ruling, the Applicantshall, on behalf of the Fund, file a report for the trade prepared in accordance with Form 45-501F1 toOntario Securities Commission Rule 45-501, and concurrently with the filing of the report pay the feethat would be payable under Rule 45-501 for the filing of that Form.

April 27, 2001.

"Paul M. Moore" "Robert W. Korthals"