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.
September 18, 2003
Attention: Teresa Vanessa Tropea
K.J. Harrison & Partners Inc.
Application for Exemptive Reliefunder OSC Rule 13-502 Fees (the "Rule" or "Rule13-502")
Application No. 627/03
By letter dated September 8, 2003 (the "Application"),you applied on behalf of K.J. Harrison & Partners Inc. ("KJHarrison"), the manager of certain pooled funds listedin the Application (the "Existing Pooled Funds") andother pooled funds created and managed by KJ Harrison from timeto time (collectively with the Existing Pooled Funds, the "PooledFunds"), 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 letter dated September 10, 2003, you additionallyapplied to the securities regulatory authority in Ontario (the"Decision Maker") on behalf of KJ Harrison, the managerof the Existing Pooled Funds, for an exemption, pursuant tosubsection 6.1 of Rule 13-502, from the requirement to pay anactivity fee of $5,500 in connection with the Application inaccordance with item E(1) of Appendix C of the Rule, on thecondition that fees be paid on the basis that the Applicationbe treated as an application for other regulatory relief underitem E(3) of Appendix C of Rule 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. KJ Harrison is a corporation existing underthe laws of Ontario with its head office in Toronto, Ontario.KJ Harrison is the manager of the Existing Pooled Funds. KJHarrison is registered as an investment dealer with the InvestmentDealers Association.
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 Ontario.Units of the Existing Pooled Funds are distributed in Ontariowithout a prospectus pursuant to exemptions from the prospectusdelivery requirements of applicable securities legislation.
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, KJ Harrison and thePooled Funds have requested under subsection 147 of the Actrelief from 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 KJ Harrison and the Pooled Funds had,as an alternative to the Application, sought an exemptionfrom the requirement to file the Financial Statements viaSEDAR, the activity fee for that application would be $1,500in accordance with 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 exemptsKJ Harrison and the Pooled Funds from paying an activity feeof $5,500 in connection with the Application, provided thatKJ Harrison and the 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.