Covington Venture Fund Inc. - s. 2.1 of NI 81-105 Mutual Fund Sales Practices

Headnote

Ontario Securities Commission Rule 13-502 -- Fees (Rule 13-502) -- Activity fees relief for an amalgamated fund's application to seek relief replacing similar relief granted to the predecessor funds.

Applicable Legislative Provisions

OSC Rule 13-102 Fees, s. 6.1.

February 1, 2007

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO AND

ONTARIO SECURITIES COMMISSION

RULE 13-502 FEES (Rule 13-502)

AND

IN THE MATTER OF

COVINGTON VENTURE FUND INC.

(the Fund)

EXEMPTION

Background

The Ontario Securities Commission (the Director) has received an application (the Application) from the Fund for an exemption pursuant to subsection 6.1 of Rule 13-502 from: (i) the requirement to pay an activity fee of $3,000 in connection with the Fund's application for relief under section 2.1 of National Instrument 81-105 (the NI 81-105 Application) in accordance with item E.1 of Appendix C of Rule 13-502; and (ii) the requirement to pay an activity fee of $1,500 in connection with the making of this Application in accordance with item E.2 of Appendix C of Rule 13-502 (collectively, the Fee Relief).

Interpretation

Defined terms contained in National Instrument 14-101 -- Definitions have the same meaning in this decision unless they are defined in this decision.

Representations

This decision is based on the following facts represented by the Fund:

1. The Fund is a reporting issuer in Ontario and is not in default of any filing requirements under the securities legislation of Ontario.

2. The Fund wishes to qualify its Class A shares, Series II and Class A shares, Series III in Ontario and to this end has prepared and filed a preliminary prospectus on December 11, 2006 in accordance with the Securities Act (Ontario) and has received a receipt therefor from the Commission on December 13, 2006.

3. The Fund was formed by way of an amalgamation of six predecessor funds, Triax Growth Fund Inc., New Millennium Venture Fund Inc., New Generation Biotech (Balanced) Fund Inc., E2 Venture Fund Inc., Venture Partners Balanced Fund Inc. and Capital First Venture Fund Inc. (collectively, the Predecessor Funds) on January 6, 2006.

4. The Fund filed the NI 81-105 Application in order to seek exemptive relief to allow the Fund to pay sales commissions and other distribution fees directly and in the manner that all of the Predecessor Funds were able to pay sales commissions and distribution fees. Rather than the NI 81- 105 Application being an application for new relief which requires the payment of an activity fee, the NI 81-105 Application requests the same relief previously applied for and received by the Predecessor Funds in the year that they each filed their preliminary prospectus and were qualified to sell securities.

Decision

The Director is satisfied that the test contained in Rule 13-502 that provides the Director with the jurisdiction to make this decision has been met.

The decision of the Director under Rule 13-502 is that the Fee Relief is granted.