Securities Law & Instruments


Certain trades in shares by a mutual fund dealer,in its capacity as a group plan administrator of an employeeretirement savings program, made for or to program participants,exempted from the dealer registration requirement in clause25(1)(a) of the Act -- Shares are common shares of an affiliateof the employer -- Program participants are employees, formeremployees, spouses of employees, spouses of former employees,and related plans registered under the Income Tax Act (Canada).

Mutual fund dealer, acting as group plan administratorof employee retirement savings program, exempted from "suitability"requirements in paragraph 1.5(b) of Rule 31-505 that would otherwisearise as a result of the dealer purchasing or selling commonshares for or on behalf of program participants.

Applicable Ontario Statute

Securities Act, R.S.O. 1990, c. S.5, as am.,ss. 25(1)(a) and 74(1).

Applicable Ontario Securities CommissionRule

Rule 31-505 Conditions of Registration, ss.1.5 and 4.1.














(Subsection 74(1) of the Actand Section 4.1 of the Registration Rule)

UPON Fidelity Investments Canada Limited("Fidelity") having made an application (the "RegistrationExemption Application") to the Ontario Securities Commission(the "Commission"), for a ruling (the "RegistrationExemption Decision"), pursuant to subsection 74(1) of theAct, that clause 25(1)(a) of the Act (the "Dealer RegistrationRequirement") shall not apply to certain trades in shares("Common Shares") of common stock of General DynamicsCorporation ("GD U.S.") to be made by Fidelity foror to persons (each, a "Program Participant") thatare Employees, Spouses of Employees, Former Employees, Spousesof Former Employees, Employee EPSPs, Employee RRSPs, EmployeeSpouse RRSPs or Employee LIRAs (as such terms are defined below),in its capacity as a group plan administrator of the GDLS CanadaSavings Stock Purchse Program (the "Program") of GeneralDynamics Land Systems -- Canada Corporation ("GD Canada")(which Program includes the Employee EPSPs, Employee RRSPs,Employee Spouse RRSPs and Employee LIRAs);

AND UPON considering the RegistrationExemption Application and the recommendation of staff of theCommission;

AND UPON Fidelity having representingto the Commission that:

1. Fidelity, a corporation continued underthe laws of Ontario, is registered under the Act as a dealerin the category of "mutual fund dealer" and is alsoregistered as an "adviser" in the categories of"investment counsel" and "portfolio manager".Fidelity Retirement Services ("FRS") is the divisionof Fidelity currently responsible for servicing Group RetirementClients (as defined below) (the "Group Retirement Business").

2. By a decision dated March 14, 2002, Inthe Matter of Fidelity Investments Canada Limited, asvaried by a decision dated December 23, 2003, the Directorhas exempted Fidelity from the following requirements of OntarioSecurities Commission Rule 31-506 SRO Membership MutualFund Dealers (the "MFDA Mandatory Membership Rule"):

(i) to be a member of the Mutual Fund DealersAssociation of Canada (the "MFDA") on or afterJuly 2, 2002, and

(ii) to file with the MFDA an applicationfor membership and corresponding fees for membership beforethe deadline date specified in the MFDA Mandatory MembershipRule

subject to Fidelity complying with specificterms and conditions on its registration as a mutual funddealer.

3. Fidelity's registration under the Act asa "mutual fund dealer" has been restricted to certaintrades which are incidental to its principal business. Therestricted trading activity includes trades by Fidelity toa participant (a "Group Retirement Client") in anemployer-sponsored registered plan or other savings plan untilthe earlier of: (i) the assumption of such trading activityby Fidelity Intermediary Securities Company Limited ("FISCo"),a wholly-owned subsidiary of Fidelity; and (ii) December 31,2003.

4. FISCO is registered under the Act as adealer in the category of "investment dealer" andis a member of the Ontario District of the Investment Dealers'Association of Canada.

5. For some time, Fidelity has been activelyengaged in a project to determine the most appropriate regulatoryplatform for its Group Retirement Business. Until recently,Fidelity's plan has been to transfer FRS to FISCo by December31, 2003. As part of its ongoing project, Fidelity is nowconsidering a possible change of plans, but Fidelity doesnot expect to be able to finalize such plans until later in2003, and, if necessary, application(s) will be made at thattime for any necessary variations of existing related exemptiverelief or new exemptive relief.

6. GD U.S. is a corporation incorporated underthe laws of the State of Delaware and is not a reporting issuerunder the Act.

7. GD Canada is a corporation incorporatedunder the laws of Nova Scotia and is not a reporting issuerunder the Act.

8. GD Canada is wholly-owned by GD U.S.

9. The Common Shares are registered with theSecurities and Exchange Commission in the United States ofAmerica (the "USA") under the Securities ExchangeAct of 1934 and GD U.S. is subject to the reporting requirementsthereunder.

10. The Common Shares are listed and postedfor trading on the New York Stock Exchange (the "NYSE").

11. Under the Program, GD Canada selects mutualfunds that persons (each an "Employee") who areemployees of GD Canada, and who participate in the Program,may purchase through payroll deductions or through lump-sumpayments.

12. Investments made by Employees under theProgram are made through the following plans (collectively,the "Component Plans"):

(i) an "employees profit sharing plan"(each, an "Employee EPSP"), as defined in theIncome Tax Act (Canada) (the "Tax Act"),that has been established for the benefit of persons whoare Employees;

(ii) "registered retirement savingsplans" (each, an "Employee RRSP"), as definedin the Tax Act, that have been established by or for thebenefit of persons who are Employees;

(iii) "registered retirement savingsplans" (each, an "Employee Spouse RRSP"),as defined in the Tax Act, that have been established byor for the benefit of persons (collectively, "Spouses")who are legally married to or are the "common law partners"(as defined in the Tax Act) of persons who are Employees;and

(iv) "locked-in retirement accounts"(each, an "Employee LIRA") registered with theCanada Customs and Revenue Agency that have been establishedby or for the benefit of persons who are Employees.

13. Under the Program, Spouses are also permittedto invest amounts in their Employee Spouse RRSPs in certainmutual funds offered through Fidelity.

14. Under the Program, it is proposed thatFidelity carry out the following activities:

(i) receive orders from Employees to purchaseCommon Shares (including Common Shares to be purchased withemployer matching contributions or upon the automatic reinvestmentof dividends paid in respect of Common Shares) through theirEPSP, their Employee RRSP, their Employee Spouse RRSP ortheir Employee LIRA;

(ii) receive orders from Spouses to purchaseCommon Shares (including Common Shares to be purchased uponthe automatic reinvestment of dividends paid in respectof Common Shares) through their Employee Spouse RRSPs;

(iii) receive orders from Employees, andfrom persons ("Former Employees") that were, buthave since ceased to be, Employees, to sell Common Sharesheld on their behalf through their EPSP, their EmployeeRRSPs or their Employee LIRA;

(iv) receive orders from Spouses, FormerEmployees or persons (each, a "Spouse of a Former Employee")who are legally married to or are the "common law partners"(as defined in the Tax Act) of a Former Employee, to sellCommon Shares held through their Employee Spouse RRSPs;

(v) "match" the orders to purchaseCommon Shares, referred to in subparagraphs (i) or (ii),against orders to sell Common Shares, referred to in subparagraphs(iii) or (iv), with the offsetting purchases and sales (a"Matching Transaction") effected by way of bookentries in the corresponding accounts maintained by Fidelityunder the Program and the funds received in respect of thepurchase remitted by Fidelity to the vendor;

(vi) where purchases or sales of CommonShares cannot be effected in a Matching Transaction, andthe aggregate number of such Common Shares is less than50, if Fidelity deems it to be appropriate, Fidelity maysatisfy the purchase or sale order by, depending upon thecase, selling or purchasing the subject Common Shares asprincipal (a "Float Transaction");

(vii) transmit orders to purchase or sellCommon Shares, referred to above, which are not effectedin a Matching Transaction or a Float Transaction, for executionthrough:

(a) another dealer that is registeredunder the Act in a category that permits it to act asa dealer for the subject trade; or

(b) another person or company that isoutside of Canada, for their execution of the order throughthe facilities of the NYSE or another stock exchange outsideof Canada, provided that the person or company is appropriatelylicensed to carry on the business of a broker/dealer underthe applicable securities legislation in the jurisdictionwhere the trade is executed;

(viii) maintain books and records in respectof the foregoing, reflecting, among other things: all relatedpayments, receipts, account entries and adjustments;

15. Records of Common Shares held under theProgram through the Component Plans will be maintained byFidelity, and the Common Shares will be held by a custodianthat is not affiliated with Fidelity, GD U.S. or GD Canada.

16. When an Employee becomes a Former Employee,the Former Employee, the Employee EPSP of the Former Employee,the Employee RRSP of the Former Employee, the Spouse of theFormer Employee, the Employee Spouse RRSP of the Former Employee,and the Employee LIRA of the Former Employee will not be permittedto make further purchases of Common Shares under the Program,other than Common Shares to be purchased upon the automaticreinvestment of dividends paid in respect of Common Sharesin the corresponding Component Plans, but, subject to timelimitations in certain cases, the foregoing will be permittedto continue to hold, through Fidelity, Common Shares previouslypurchased on their behalf under the Program, to instruct Fidelityfrom time to time to sell Common Shares then held on theirbehalf by Fidelity, or to transfer such Common Shares to anaccount with another dealer.

17. To participate in the Program, Employeesand Spouses must enrol through Fidelity by application, whichmay be completed: in writing; on the telephone, by way ofa recorded call; or, through the Internet, by way of secureaccess to Fidelity's website.

18. Employees and Spouses who enrol in theProgram on or after August 8, 2003 (the "Effective Date")will be required, when completing the enrolment applicationto acknowledge that Fidelity will not be performing any "suitability"analysis with respect to any purchase or sale of Common Shareson their behalf, or on behalf of their Spouse, under the Program:by signing the application form, where the application iscompleted in writing; orally, where the application is completedon the telephone; or, by making the appropriate selectionon Fidelity's website, where the application is completedon the Internet.

19. Employees and Spouses who are or wereenrolled in the Program before the Effective Date will besent, not less than 5 days before the Effective Date, writtenor electronic notice from Fidelity (or GD Canada on behalfof Fidelity) that Fidelity will not perform "know-your-client"or 'suitability" analysis with respect to any purchaseor sale of Common Shares on their behalf under the Program.

20. No Program Participant will be chargedany trading commissions, fees, costs or other expenses inrespect of the purchase or sale of any Common Shares on behalfof the Program Participant under the Program.

21. No Employee or Spouse of an Employee willbe induced to participate in the Program or purchase any CommonShares through the Program by expectation of the Employee'semployment or continued employment by GD Canada or any ofits affiliates.

22. For any trades that it makes under theProgram to a Program Participant that is an Employee or anEmployee RRSP, Fidelity intends to rely upon exemptions fromthe Dealer Registration Requirement of the Act contained inCommission Rule 45-503 Trades to Employees, Executivesand Consultants (the "Employee Rule"), whichdefines an "employee" of an issuer, for the purposesof the Employee Rule, to include an employee of an affiliatedentity of the issuer.

23. For any trades that it makes under theProgram with a Program Participant (an "Employee RuleExcluded Program Participant") that is not an "employee"of GD Canada, or the RRSP of an employee of GD Canada, andtherefore an employee of GD U.S., for the purposes of theEmployee Rule, Fidelity cannot rely on any exemptions fromthe Dealer Registration Requirement of the Act contained inthe Employee Rule.

24. Except for obligations in section 1.5of the Registration Rule that are made inapplicable pursuantto the below Suitability Exemption Decision of the Director,Fidelity will, with respect to any purchase, sale or holdingof Common Shares, by Fidelity on behalf of Program Participantsunder the Program, comply with all conditions or other requirementsthat are contained in the Act or any regulations made thereunderthat would be applicable to it as a registered mutual funddealer if the Common Shares were shares or units of a mutualfund, including requirements relating to, but not limitedto: capital requirements; record keeping; account supervision;segregation of funds and securities; confirmations of trades;"know your client" and statements of account.

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

IT IS RULED, pursuant to subsection 74(1)of the Act, that on or after the Effective Date, the DealerRegistration Requirement shall not apply to any trades madeby Fidelity to, or on behalf of, Program Participants, thatare referred to in paragraph 14, above, where the trade:

(i) consists of the receipt by Fidelity ofan order to purchase or sell Common Shares on behalf of aProgram Participant that is an Employee Rule Excluded Participant,as referred to in paragraph 14(i) to (iv), above,

(ii) consists of the sale by Fidelity of CommonShares, on behalf of a Program Participant, to another ProgramParticipant, where either the selling Program Participantis an Employee Rule Excluded Participant or the PurchasingProgram Participant is an Employee Rule Excluded Participant,in a Matching Transaction, as referred to in paragraph 14(v),above,

(iii) consists of the sale by Fidelity ofCommon Shares to an Employee Rule Excluded Participant, ina Float Transaction, as referred to paragraph 14(vi), above,

(iv) consists of the sale by a Program Participantof Common Shares to Fidelity, in a Float Transaction, as referredto paragraph 14(vi), above,

(v) consists of the sale by a Program Participantthat is not an Employee Rule Excluded Participant, as referredto in subparagraph 14(vii)(a), above, or

(vi) is a trade (an "Ex Juris Trade")referred to in subparagraph 14(vii)(b), above,


A. Fidelity is, at the time of such trade,registered under the Act as a dealer in the category of "mutualfund dealer", and, the trade is made on behalf of Fidelityby a person that is registered under the Act to trade sharesor units of mutual funds on behalf of Fidelity as a salespersonor officer;

B. in the case of any trade that is an ExJuris Trade, the requirements for the trade to be exempt fromsection 25 of the Act pursuant to section 2.4 of the EmployeeRule that are specified in paragraph (b), (c) and (d) of section2.4 of the Employee Rule are satisfied; and

C. this Registration Exemption Decision willterminate on December 31, 2003.

July 30, 2003.

"Wendell S. Wigle"
"Paul K. Bates"

AND UPON Fidelity also making a contemporaneousapplication (the "Suitability Exemption Application")to the Director for a decision (the "Suitability ExemptionDecision") of the Director, pursuant to section 4.1 ofthe Registration Rule, exempting Fidelity from the requirements(the "Suitability Requirements") of section 1.5 ofthe Registration Rule to make enquiries of a Program Participantto determine:

(a) the general investment needs and objectivesof the Program Participant, and

(b) the suitability of a proposed purchaseor sale of Common Shares for the Program Participant,

that would otherwise arise as a result of Fidelitypurchasing or selling Common Shares to or for the Program Participant,as described in the Registration Exemption Decision, above,shall not apply to Fidelity;

AND UPON considering the SuitabilityExemption Application and the recommendation of staff of theCommission;

AND UPON Fidelity having made to theDirector in the Suitability Exemption Application the same representationsit has made to the Commission in the Registration ExemptionApplication;

THE DECISION of the Director, pursuantto section 4.1 of the Registration Rule, is that, on or afterthe Effective Date, as defined in the above Registration ExemptionDecision, the Suitability Requirements of the Registration Ruleshall not apply to Fidelity as a result of Fidelity purchasingor selling Common Shares to or for Program Participants, asdescribed in the above Registration Exemption Decision, providedthat, in the circumstances of each such purchase or sale:

D. the Program Participant, or, in the caseof a Program Participant that is an EPSP, an Employee RRSP,an Employee Spouse RRSP or an Employee LIRA, the correspondingEmployee or Spouse, has given the corresponding acknowledgementor has been sent the corresponding notice, referred to inparagraphs 18 and 19, of the above Registration ExemptionDecision;

E. Fidelity does not make any recommendationor give any investment advice with respect to the purchaseor sale; and

F. this Suitability Exemption Decision willterminate on December 31, 2003.

July 30, 2003.

"David M. Gilkes"