Securities Law & Instruments

Headnote

Exemption for pooled funds from the requirementto file with the Commission interim financial statements undersection 77(2) of the Act and comparative financial statementsunder section 78(1) of the Act, subject to conditions.

Statutes Cited

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

National Instrument 13-101 -- System for ElectronicDocument Analysis and Retrieval (SEDAR), s. 2.1(1)1.

Regulations Cited

Regulation made under the Securities Act, R.R.O.Reg. 1015, as am.

IN THE MATTER OF

THE SECURITIES ACT (ONTARIO),R.S.O. 1990,

CHAPTER S.5 AS AMENDED (THE"ACT")

AND

IN THE MATTER OF

ARROW HEDGE PARTNERS INC.

AND

ARROW GOODWOOD FUND,

ARROW CLOCKTOWER PLATINUMGLOBAL FUND

ARROW UK LONG/SHORT FUND

ARROW WF ASIA FUND

ARROW EPIC CAPITAL FUND

ARROW MILFORD CAPITAL FUND

ARROW ASCENDANT ARBITRAGEFUND

ARROW ENSO GLOBAL FUND

ARROW ELKHORN US LONG/SHORTFUND

ARROW QUANT MARKET NEUTRALFUND

ARROW AUSTRALIAN RELATIVEFUND

ARROW EAGLE & DOMINIONFUND

ARROW EUROPEAN HIGH YIELDFUND

ARROW PROXIMA CONVERTIBLEARBITRAGE FUND

ARROW GRAMVEST FIXED INCOMEARBITRAGE FUND

ARROW GRAMVEST GLOBAL MACROFUND

ARROW MULVANEY GLOBAL MARKETSFUND

ARROW DISTRESSED SECURITIESFUND

ARROW GLOBAL LONG/SHORT FUND

ARROW GLOBAL RSP LONG/SHORTFUND

ARROW MULTI-STRATEGY FUND

ARROW RSP MULTI-STRATEGY FUND

ARROW MULTI-STRATEGY HEDGEFUND

ARROW NORTH AMERICAN MULTI-MANAGERFUND

(The "Existing PooledFunds")

 

ORDER

(Subsection 147 of the Act)

UPON the application (the "Application")of Arrow Hedge Partners Inc. ("Arrow"), the managerof the Existing Pooled Funds and other pooled funds establishedand managed by Arrow from time to time (collectively, the "PooledFunds"), to the Ontario Securities Commission (the "Commission")for an order pursuant to subsection 147 of the Act exemptingthe Pooled Funds from filing with the Commission the interimand annual financial statements prescribed by sections 77(2)and 78(1), respectively, of the Act;

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

AND UPON Arrow having represented tothe Commission that:

1. Arrow is a corporation under the laws ofOntario with its head office in the Ontario. Arrow is, orwill be, the manager of the Pooled Funds. Arrow is registeredwith the Commission as an adviser in the categories of investmentcounsel, portfolio manager and commodity trading manager andas a dealer in the category of limited market dealer.

2. The Pooled Funds are, or will be, open-endmutual fund trusts established under the laws of Ontario.The Pooled Funds will not be reporting issuers in any provinceor territory of Canada. Units of the Pooled Funds are, orwill be, distributed in each of the provinces and territoriesof Canada without a prospectus pursuant to exemptions fromthe prospectus delivery requirements of applicable securitieslegislation.

3. The Pooled Funds fit within the definitionof "mutual fund in Ontario" in section 1(1) of theAct and are thus required to file with the Commission interimfinancial statements under section 77(2) of the Act and comparativeannual financial statements under section 78(1) of the Act(collectively, the "Financial Statements").

4. While the Pooled Funds are structured asmutual funds, they are not public mutual funds. The PooledFunds are not reporting issuers and are not sold to the generalpublic.

5. Unitholders of the Pooled Funds ("Unitholders")receive the Financial Statements for the Pooled Funds theyhold. The Financial Statements are prepared and deliveredto Unitholders in the form and for the periods required underthe Act and the regulation or rules made thereunder (the "Regulation").Arrow and the Pooled Funds will continue to rely on subsection94(1) of the Regulation and will omit statements of portfoliotransactions from the Financial Statements (such statementsfrom which the statements of portfolio transactions have beenomitted, the "Permitted Financial Statements").

6. As required by subsection 94(1) of theRegulation, the Permitted Financial Statements will containa statement indicating that additional information as to portfoliotransactions will be provided to a Unitholder without chargeon request to a specified address and,

(a) the omitted information shall be sentpromptly and without charge to each Unitholder that requestsit in compliance with the indication; and

(b) where a person or company requests thatsuch omitted information be sent routinely to that Unitholder,the request shall be carried out while the information continuesto be omitted from the subsequent Financial Statements unitthe Unitholder requests, or agrees to, termination of thearrangement or is no longer a Unitholder.

7. 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.

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

IT IS ORDERED by the Commission pursuantto subsection 147 of the Act that the Pooled Funds be exemptedfrom the requirements in sections 77(2) and 78(1) of the Actto file the Financial Statements with the Commission provided:

(a) In the absence of other regulatory relief,the Pooled Funds will prepare and deliver to the Unitholdersof the Pooled Funds the Permitted Financial Statements, inthe form and for the periods required under the Act and theRegulation;

(b) The Pooled Funds will retain the FinancialStatements indefinitely;

(c) The Pooled Funds will provide the FinancialStatements to the Commission or any member, employee or agentof the Commission immediately upon request of the Commissionor any member, employee or agent of the Commission;

(d) The Pooled Funds will provide a list ofthe Pooled Funds relying on this Order to the Investment FundsBranch of the Commission on an annual basis;

(e) Unitholders of the Pooled Funds will benotified that the Pooled Funds are exempted from the requirementsin sections 77(2) and 78(1) of the Act to file the FinancialStatements with the Commission;

(f) In all other aspects, the Pooled Fundswill comply with the requirements in Ontario securities lawfor financial statements; and

(g) This decision, as it relates to the Commission,will terminate after the coming into force of any legislationor rule of the Commission dealing with the matters regulatedby sections 77(2) and 78(1) of the Act.

August 29, 2003.

"Wendell S. Wigle"
"Lorne Morphy"