Norshield Asset Management (Canada) Ltd. - ss. 74(1)

Headnote

Subsection 74(1) of the Act -- relief granted from the prospectus requirements in connection with certain over-the-counter derivatives transactions.

Ontario Statutes

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 53 and 74(1).

Rules Cited

Proposed Rule 91-504 -- Over-The-Counter Derivatives (2000), 23 OSCB 51.

IN THE MATTER OF

THE SECURITIES ACT

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

AND

IN THE MATTER OF

NORSHIELD ASSET MANAGEMENT (CANADA) LTD.

RULING

(Section 74(1))

UPON the application (the "Application") of Norshield Asset Management (Canada) Ltd. (the "Manager") to the Ontario Securities Commission (the "Commission") for a decision pursuant to section 74(1) of Securities Act (Ontario) (the "Act") that the dealer registration requirement of section 25 of the Act and the prospectus requirement of section 53 of the Act not apply in connection with the Equity Swap Transaction (defined below);

AND UPON considering the Application and the recommendation of staff of the Commission;

AND UPON the Manager having represented to the Commission as follows:

1. The Fund is an open-ended investment trust to be organized under the laws of the Province of Ontario pursuant to a trust agreement between the Manager and Computershare Trust Company of Canada as trustee;

2. the Fund's primary objective is to mirror (as nearly as practicable), the performance of the Olympus Univest Ltd. (the "Reference Fund") while at the same time not constituting foreign property for purposes of Canadian income tax legislation. The Reference Fund is an open-ended investment company and hedge fund organized with limited liability and unlimited duration under the laws of The Commonwealth of the Bahamas. The primary objective of the Reference Fund is to focus on preservation of capital in combination with yield enhancing features of alternative investment strategies;

3. the Manager is a corporation incorporated under the laws of Canada and is registered as an advisor under the Act in the categories of investment counsel and portfolio manager, and under the Commodity Futures Act in the categories of commodity trading counsel and commodity trading manager;

4. to achieve the Fund's investment objectives, the Fund proposes from time to time to enter into one or more equity swap transactions (collectively, the "Equity Swap Transaction") to provide the Fund with the economic return of an investment in the Reference Fund. The Equity Swap Transaction will be undertaken pursuant to one or more confirmations under an ISDA master agreement between the Fund and a Canadian chartered bank; and

5. it is unclear whether the Equity Swap Transaction constitutes one or more securities or involves any trades in securities;

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

IT IS THE DECISION of the Commission, pursuant to section 74(1) of the Act, that the Equity Swap Transaction shall be exempt from the dealer registration and prospectus requirements under the Act.

January 13, 2004.