Exemption from fees otherwise due under Rule45-501 on the distribution of units made by a private "underlying"fund arising in the context of a fund-of-fund structure.
Securities Act, R.S.O. 1990, c. S.5 as am.,ss. 147.
Applicable Ontario Rule
OSC Rule 45-501, s. 7.3.
IN THE MATTER OF
THE SECURITIES ACT
R.S.O. 1990, CHAPTER S.5,AS AMENDED (the "Act")
IN THE MATTER OF
BRANDYWINE SMALL/MID CAP U.S.VALUE EQUITY FUND
(Section 147 of the Act)
UPON the application (the "Application")of Perigee Investment Counsel Inc. ("Perigee"), themanager of the Brandywine Small/Mid Cap U.S. Value RP Fund (the"Top Fund"), and of the Brandywine Small/Mid Cap U.S.Value Fund (the "Underlying Fund"), to the OntarioSecurities Commission (the "Commission") for an orderpursuant to section 147 of the Act exempting the UnderlyingFund from paying duplicate filing fees on an annual basis inrespect of the distribution of units of the Underlying Fundto the Top Fund, the distribution of units of the UnderlyingFund to Counterparties (defined herein) with whom the Top Fundhas entered into forward contracts, and on the reinvestmentof distributions on such units;
AND UPON considering the Applicationand the recommendation of the staff of the Commission;
AND UPON Perigee having represented tothe Commission that:
1. The Top Fund and the Underlying Fund areboth part of the Perigee Pooled Funds and are each an open-endmutual fund trust established under the laws of Ontario. Perigeeand The Royal Trust Company are the manager and the trustee,respectively, of both the Top Fund and the Underlying Fund.Neither the Top Fund nor the Underlying Fund is, and neitherthe Top Fund nor the Underlying Fund intends to become, areporting issuer in any province of Canada. Units of the TopFund and the Underlying Fund are each offered on a privateplacement basis to sophisticated purchasers in all of theprovinces of Canada. Neither the Top Fund nor the UnderlyingFund provides investors with a confidential offering memorandum.
2. Perigee is a corporation established underthe laws of Canada. Perigee is the manager and promoter ofboth the Top Fund and the Underlying Fund. Perigee is registeredwith the Commission as a mutual fund dealer and adviser inthe categories of investment counsel and portfolio manager.
3. Neither the Top Fund nor the UnderlyingFund is in default of any requirement of the Act.
4. As part of its investment strategy, theTop Fund enters into forward contracts with one or more financialinstitutions (individually, a "Counterparty" andcollectively, the "Counterparties") that link thereturns to the Underlying Fund.
5. A Counterparty may hedge its obligationsunder the forward contracts by investing in units (the "HedgeUnits") of the Underlying Fund.
6. As part of its investment strategy, theTop Fund may purchase units of the Underlying Fund (the "Fundon Fund Investments").
7. Applicable securities regulatory approvalsfor the Fund on Fund Investments and the Top Fund's investmentstrategies are in the process of being obtained.
8. The Top Fund will, in accordance with thefiling fee requirements of section 7.3 of Ontario SecuritiesCommission Rule 45-501 - Exempt Distributions ("OSC Rule45-501"), pay any applicable private placement filingfees when any units of the Top Fund are sold to investors.
9. Annually, the Underlying Fund will be requiredto pay filing fees in respect of the distribution of unitsin Ontario, including units issued to the Top Fund and theHedge Units pursuant to section 7.3 of OSC Rule 45-501, andwill similarly be required to pay fees based on the distributionof its units in other relevant Canadian jurisdictions pursuantto the applicable securities legislation in each of thosejurisdictions.
10. A duplication of filing fees pursuantto section 7.3 of OSC Rule 45-501 will result when (a) assetsof the Top Fund are invested in units of the Underlying Fund(b) Hedge Units are distributed and (c) a distribution ispaid by the Underlying Fund on units of the Underlying Fundheld by the Top Fund or Hedge Units which are reinvested inadditional units of the Underlying Fund (the "ReinvestedUnits").
AND UPON the Commission being satisfiedto do so would not be prejudicial to the public interest,
IT IS ORDERED by the Commission pursuantto section 147 of the Act that the Underlying Fund is exemptfrom the payment of duplicate filing fees on an annual basispursuant to section 7.3 of OSC Rule 45-501 in respect of thedistribution of units of the Underlying Fund to the Top Fund,the distribution of Hedge Units to Counterparties and the distributionof Reinvested Units, provided that the Underlying Fund shallinclude in its annual Form 45-501F1 a statement of the aggregategross proceeds realized in Ontario as a result of the issuanceby the Underlying Fund of (1) units distributed to the Top Fund,(2) Hedge Units and (3) Reinvested Units; together with a calculationof the fees that would have been payable in the absence of thisOrder.
January 31, 2003.
"Paul M. Moore" "KerryD. Adams"