Securities Law & Instruments

Headnote

Section 5.1 -- OSC Rule 31-506 -- exemptionto mutual fund dealer from the requirement to be a member ofthe Mutual Fund Dealers Association of Canada -- exemption fora limited period of time.

Applicable Ontario Securities CommissionRule

Rule 31-506 -- SRO Membership -- Mutual FundDealers.

IN THE MATTER OF

THE SECURITIES ACT

R.S.O. 1990, C. S.5, AS AMENDED(the "Act")

AND

IN THE MATTER OF

ONTARIO SECURITIES COMMISSIONRULE 31-506

SRO MEMBERSHIP - MUTUAL FUNDDEALERS (the "Rule")

AND

IN THE MATTER OF

McGEE CAPITAL MANAGEMENT LIMITED

EXEMPTION

(Section 5.1 of the Rule)

UPON the Director having received anapplication (the "Application") from McGee CapitalManagement Limited ("McGee") seeking a decision pursuantto section 5.1 of the Rule, to exempt McGee from the applicationof section 2.1 of the Rule, which would require McGee to bea member of the Mutual Fund Dealers Association of Canada (the"MFDA") by July 2, 2002 on the condition that McGeeor an affiliated entity is a member of the MFDA by July 2, 2003;

AND UPON considering the Applicationand the recommendation of staff of the Commission;

AND UPON McGee having represented tothe Director that:

1. McGee is registered under the Act as amutual fund dealer and investment counsel/portfolio managerand has its head office in Ontario;

2. McGee filed a membership application (the"MFDA Application") with the MFDA in 2001;

3. the MFDA advised McGee that a MFDA membermay not engage in portfolio management activities, as discretionarytrading is prohibited under MFDA Rule 2.3.4;

4. McGee has established an affiliated entity,McGee & Associates Inc., that will assume the mutual funddistribution activities of McGee;

5. McGee & Associates Inc. has appliedfor registration as a mutual fund dealer with the OntarioSecurities Commission and has applied for membership in theMFDA;

6. McGee and its affiliated entity will workdiligently to obtain membership for the subsidiary in theMFDA;

7. McGee will not expand its dealer operationsuntil such time as McGee & Associates has obtained membershipin the MFDA;

8. Neither McGee nor McGee & AssociatesInc. is, to its knowledge, in breach of any requirements ofthe Act or the regulations or rules made thereunder;

9. McGee received an exemption on June 28,2002 (the "Initial Exemption") from the requirementof section 2.1 of the Rule on the condition that McGee, orits affiliate was a member of the MFDA by December 1, 2002.It received a second exemption on November 30, 2002 (the "SecondExemption") from the requirement of section 2.1 of theRule on the condition that McGee, or its affiliate was a memberof the MFDA by April 1, 2003;

10. neither McGee nor McGee & AssociatesInc. will be a member of the MFDA by April 1, 2003.

AND UPON the Director being satisfiedthat to do so would not be prejudicial to the public interest;

IT IS THE DECISION of the Director, pursuantto section 5.1 of the Rule, that McGee is exempt from the requirementof section 2.1 of the Rule, as modified by the Initial Exemptionand the Second Exemption, on the condition that from and afterJuly 2, 2003, so long as McGee is registered as a mutual funddealer under the Act, McGee is a member of the MFDA.

March 31, 2003.

"David M. Gilkes"