Front Street Small Cap Canadian Fund and Front Street Special Opportunities Canadian Fund Ltd. - MRRS Decision

Headnote

Mutual Reliance Review System for Exemptive Relief Applications -- Variation of exemptive relief granted to mutual funds allowing extension of prospectus lapse date.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5 as am., ss. 62(5), 144(1).

May 15, 2007

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

BRITISH COLUMBIA, ALBERTA, SASKATCHEWAN,

MANITOBA, ONTARIO, QUÉBEC, NOVA SCOTIA,

NEW BRUNSWICK, NEWFOUNDLAND AND LABRADOR,

PRINCE EDWARD ISLAND, YUKON TERRITORY

AND NUNAVUT

(the "Jurisdictions")

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEW SYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

FRONT STREET SMALL CAP CANADIAN FUND AND

FRONT STREET SPECIAL OPPORTUNITIES

CANADIAN FUND LTD.

(the "Filers")

MRRS DECISION DOCUMENT

Background

The local securities regulatory authority or regulator (each a "Decision Maker", and together, the "Decision Makers") in each of the Jurisdictions has received an application from Front Street Capital 2004 (the "Manager"), the Manager of the Filers, for a decision pursuant to the securities legislation of the Jurisdictions (the "Legislation") to vary the decision document issued by the Decision Makers dated April 5, 2007 (the "Original Decision"). The Original Decision granted relief to extend the time limits provided by the Legislation as they apply to the distribution of securities under the simplified prospectus and annual information form of the Filers dated March 24, 2006 (the "2006 Prospectus") to those time limits that would be applicable if the lapse date of the 2006 Prospectus was May 15, 2007. The variation requested is that the time limits provided by the Legislation as they apply to the distribution of securities under the 2006 Prospectus be further extended to those time limits that would be applicable if the lapse date of the 2006 Prospectus was June 15, 2007 (the "Requested Relief").

Under the Mutual Reliance Review System for Exemptive Relief Applications

a. the Ontario Securities Commission is the principal regulator for this application, and

b. this MRRS Decision Document evidences the decision of each Decision Maker.

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 Filers:

1. The Original Decision extended the lapse date for the 2006 Prospectus to May 15, 2007, in order to provide the Manager with sufficient time to file a pro forma simplified prospectus and annual information form in respect of Front Street Small Cap Canadian Fund ("Small Cap") and to hold a meeting of shareholders of Front Street Special Opportunities Canadian Fund Ltd. ("SOF") to approve certain changes to its structure and operations (the "Reorganization").

2. After discussions with staff in the Jurisdictions, the Manager decided not to proceed with the Reorganization. The Manager issued and filed a press release on May 8, 2007 on SEDAR announcing that it has decided not to proceed with the Reorganization.

3. The Manager intends to file a pro forma simplified prospectus and annual information form for SOF in the Jurisdictions as soon as possible and in any event no later than May 11, 2007.

4. The Manager has filed a pro forma simplified prospectus and annual information form for Small Cap in the Jurisdictions under SEDAR Project No. 1081688.

5. The Manager now requests that the lapse date for the 2006 Prospectus be further extended to June 15, 2007 to provide sufficient time for the pro forma simplified prospectus and annual information form for SOF and the pro forma simplified prospectus and annual information form for Small Cap to be reviewed and filed in final form, and to allow the continued distribution of securities of the Filers until a receipt is issued for the respective final simplified prospectus and annual information form of each Filer.

6. All representations contained in the Original Decision remain true and complete except for Paragraphs 10, 12, 13, 14, 15, and 16, which are no longer applicable as a result of the Manager deciding not to proceed with the Reorganization.

Decision

Each of the Decision Makers is satisfied that the test contained in the Legislation that provides the Decision Maker with the jurisdiction to make the Decision has been met.

The Decision of the Decision Makers pursuant to the Legislation is that the Requested Relief is granted.