Item E(1) of Appendix C of OSC Rule 13-502 Fees-- exemption for pooled funds from paying an activity fee of$5,500 in connection with an application brought under subsection147 of the Act, provided an activity fee be paid on the basisthat the application be treated as an application for otherregulatory relief under item E(3) of Appendix C of the Rule.
Ontario Securities Commission Rule 13-502, Fees,(2003) 26 OSCB 891.
Securities Act, R.S.O. 1990, c. S.5 as am.,ss. 77(2) and ss. 78(1).
National Instrument 13-101 -- System for ElectronicDocument Analysis and Retrieval (SEDAR), s. 2.1(1)1.
July 31, 2003
Attention: Karen A. Malatest
Capital Guardian Trust Company
Application for Exemptive Reliefunder OSC Rule 13-502 Fees (the "Rule" or "Rule13-502")
Application No. 494/03
By letter dated July 23, 2003 (the "Application"),you applied on behalf of Capital Guardian Trust Company ("CGTC"),the manager of certain pooled funds listed in the Application(the "Existing Pooled Funds") and other pooled fundscreated and managed by CGTC from time to time (collectivelywith the Existing Pooled Funds, the "Pooled Funds"),to the Ontario Securities Commission (the "Commission")under subsection 147 of the Securities Act Ontario (the "Act")for relief from subsections 77(2) and 78(1) of the Act, whichrequires every mutual fund in Ontario to file interim and comparativeannual financial statements (the "Financial Statements")with the Commission.
By same date and cover, you additionally appliedto the securities regulatory authority in Ontario (the "DecisionMaker") on behalf of CGTC, the manager of the ExistingPooled Funds, for an exemption, pursuant to subsection 6.1 ofRule 13-502, from the requirement to pay an activity fee of$5,500 in connection with the Application in accordance withitem E(1) of Appendix C of the Rule, on the condition that feesbe paid on the basis that the Application be treated as an applicationfor other regulatory relief under item E(3) of Appendix C ofRule 13-502.
Item E of Appendix C of Rule 13-502 specifiesthe activity fee applicable for applications for discretionaryrelief. Item E(1) specifies that applications under subsection147 of the Act pay an activity fee of $5,500, whereas item E(3)specifies that applications for other regulatory relief payan activity fee of $1,500.
From our review of the Application and otherinformation communicated to staff, we understand the relevantfacts and representations to be as follows:
1. CGTC is a corporation existing under thelaws of California with its head office in the United States.CGTC is the manager of the Existing Pooled Funds. CGTC isregistered with the Commission as an international adviserin the categories of investment counsel and portfolio manager.
2. The Existing Pooled Funds are open-endmutual fund trusts established under the laws of Ontario.The Existing Pooled Funds are not reporting issuers in anyprovince or territory of Canada. Units of the Existing PooledFunds are distributed in each of the provinces and territoriesof Canada without a prospectus pursuant to exemptions fromthe prospectus delivery requirements of applicable securitieslegislation.
3. The Existing Pooled Funds fit within thedefinition of "mutual fund in Ontario" in section1(1) of the Act and are thus required to file Financial Statementswith the Commission under subsections 77(2) and 78(1) of theAct.
4. Section 2.1(1)1 of National Instrument13-101 -- System for Electronic Document Analysis and Retrieval(SEDAR) ("Rule 13-101") requires that every issuerrequired to file a document under securities legislation makeits filing through SEDAR. The Financial Statements filed withthe Commission thus become publicly available.
5. In the Application, CGTC and the PooledFunds have requested under subsection 147 of the Act relieffrom filing the Financial Statements with the Commission.The activity fee associated with the Application is $5,500in accordance with item E(1) of Appendix C of Rule 13-502.
6. If CGTC and the Pooled Funds had, as analternative to the Application, sought an exemption from therequirement to file the Financial Statements via SEDAR, theactivity fee for that application would be $1,500 in accordancewith item E(3) of Appendix C of Rule 13-502.
7. If the Pooled Funds were reporting issuersseeking the same relief as requested in the Application, suchrelief could be sought under section 80 of the Act, ratherthan under subsection 147 of the Act, and the activity feefor that application would be $1,500 in accordance with itemE(3) of Appendix C of Rule 13-502.
This letter confirms that, based on the informationprovided in the Application, other communications to staff,and the facts and representations above, and for the purposesdescribed in the Application, the Decision Maker hereby exemptsCGTC and the Existing Pooled Funds from paying an activity feeof $5,500 in connection with the Application, provided thatCGTC and the Existing Pooled Funds pay an activity fee on thebasis that the Application be treated as an application forother regulatory relief under item E(3) of Appendix C to Rule13-502.