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Manion Wilkins & Associates Ltd. - s. 147
Headnote
Section 147 - relief from requirement to payfees in connection with trades in money market pooled fund unitswhich are exempt from prospectus and registration requirementsprovided fees calculated on based on net sales are filed.
Statute Cited
Securities Act, R.S.O. 1990, c. S.5 as am.,s. 147.
Applicable Ontario Rule
OSC Rule 45-501, s. 2.3, 2.12, 7.3(1).
IN THE MATTER OF
THE SECURITIES ACT,
R.S.O. 1990, CHAPTER S.5,AS AMENDED (the "Act")
AND
IN THE MATTER OF
MANION WILKINS & ASSOCIATESLTD.
ORDER
(Section 147 of the Act)
UPON the application (the "Application")of Manion Wilkins & Associates Ltd. (the "Applicant"),the administrator of the Manion Wilkins Short-Term InvestmentFund ("MW STIF"), to the Ontario Securities Commission(the "Commission") for a decision pursuant to section147 of the Securities Act (Ontario) (the "Act") thatany fees that would otherwise be payable under subsection 7.3(1)of OSC Rule 45-501 on the distribution of units ("Units")of the MW STIF and any other money market fund which may beestablished by the Applicant (individually and collectively,the "Fund"), made in reliance on the exemptions fromthe prospectus requirements of the Act, be calculated as a percentageof the net sales of Units of such Fund as opposed to being calculatedas a percentage of the aggregate gross proceeds realized and,paid to the Commission, within 30 days of the financial yearend of the Fund.
AND UPON considering the Applicationand the recommendation of the staff of the Commission;
AND UPON the Applicant having representedto the Commission that:
1. The Applicant is in the business of providingadministrative and consulting services to pension funds, healthand welfare plan funds, supplementary unemployment benefitplan funds and comparable pooled funds. The Applicant is nota "market Intermediary" as defined in section 204(1)of the Regulation.
2. The Applicant has established MW STIF inconjunction with The Royal Trust Company. The MW STIF wasestablished by a declaration of trust and is proposed to begoverned by a master services agreement. Additional Fundsmay be established by the Applicant from time to time to betterservice the Applicant's clients.
3. The Applicant is, or will be, the administrator,principal distributor and promoter of each Fund. The RoyalTrust Company, or similar trust corporation, is or will bethe trustee, custodian, registrar and transfer agent of eachFund. Jarislowsky, Fraser Limited, or a similar registeredportfolio manager, is, or will be, the management companyof the Funds.
4. Each Fund is, or will be, a "mutualfund" as defined in subsection 1(1) of the Act.
5. Each Fund does not intend to become reportingissuers, as such term is defined in the Act, and the Unitswill not be listed on any stock exchange.
6. The Units will be distributed on a continuousbasis to persons in Ontario in reliance on the exemptionsprovided for in sections 2.3 (accredited investor) and 2.12(certain trades in a security of a mutual fund or non-redeemableinvestment fund) in OSC Rule 45-501 - Exempt Distributions.
7. Each Fund will from time to time pay outand not automatically reinvest any net income and capitalgains of the Fund to the unitholders of the Fund.
8. Units of each Fund are, or will be, offeredon a continuous basis to investors in Ontario and may be acquiredonly on the first day of business of the trustee at its Torontooffice in each month (or on such other day as the trusteemay from time to time determine) (a "Trading Day").The price per Unit shall be equal to the net asset value perUnit of the Fund on the last day of business of the trusteeat its Toronto office in the preceding month (a "ValuationDay").
9. No sales commissions or deferred salescommissions will be charged when an investor buys or redeemsUnits. Each of the administrator, trustee and portfolio managerof each Fund shall earn fees on the basis of multiplying anannounced number of basis points by the net asset value ofthe Fund.
10. A unitholder of each Fund may redeem bywritten request all or a portion of the unitholder's Unitson any Trading Day at the net asset value per Unit of theFund on the preceding Valuation Day. A redemption requestreceived after a Trading Day will be processed on the nextTrading Day.
11. An investor will be provided with a copyof a term sheet in respect of the Funds prior to the investor'sinvestment in a Fund (the "Term Sheet"). The TermSheet describes the investment objectives and restrictionsof the Fund, how Units may be purchased and redeemed and allapplicable fees. In addition, unitholders of the Fund willbe provided with a monthly statement setting out the numberand the value of the Units they hold, any transactions theyhave made since the last report they received and any otherrelevant information. The Funds will be audited on an annualbasis.
12. The fiscal year-end of the MW STIF iscurrently December 31st.
13. Each Fund is, or will be, a "moneymarket fund" as defined in section of 1.1 of NationalInstrument 81-102 Mutual Funds.
14. The investment policy of the MW STIF isas follows:
(a) all of the assets of the fund shallbe invested in cash, cash equivalents and indebtedness issuedor guaranteed by a Canadian federal or provincial government,or a Canadian chartered bank, commercial paper which hasan approved credit rating or demand loans to Canadian investmentdealers fully secured by any of the foregoing investments;
(b) no investment will have a term to maturityin excess of 365 days, unless the principal amount of theobligation will continue to have a market value of approximatelypar at the time of each change in the rate to be paid tothe holder of the indebtedness;
(c) the investment portfolio of the fundshall have a dollar-weighted average term to maturity notexceeding 90 days, calculated on the basis that the termof a floating rate obligation is the period remaining tothe date of the next rate setting; and
(d) the investment portfolio of the fundshall be denominated in Canadian dollars, or in foreigncurrency deposits (provided that such deposits are coveredby currency hedging transactions).
AND UPON the Commission being satisfiedthat to do so would not be prejudicial to the public interest;
IT IS ORDERED pursuant to Section 147of the Act that the requirement to remit the private placementfee prescribed by Subsection 7.3(1) of OSC Rule 45-501 withrespect to the sale of Units of a Fund shall not apply, providedthe Fund remits to the Commission, in accordance with eitherSubsection 7.5(8) or Section 7.7 of OSC Rule 45-501 a fee equalto 0.02% times the net sales of Units of the Fund in Ontarioduring a financial year, where net sales is the amount calculatedby the following formula:
X - Y
where
"X" is the aggregate gross proceedsrealized from the distribution of Units of a Fund in Ontarioduring the year, and
"Y" is the aggregate of the redemptionand repurchase prices paid to redeem or repurchase Units ofa Fund held by persons in Ontario during the year.
January 24, 2003.
"Howard I. Wetston" "RobertL. Shirriff"