Securities Law & Instruments


NP 11-203 -- Exemptions granted to limited partnership from the requirement in National Instrument 81-106 Investment Fund Continuous Disclosure to file an annual information form. The partnership has a short lifespan and does not have a readily available secondary market. All units of the partnership held by public investors have already been redeemed. The partnership will prepare and file annual financial statements and management reports of fund performance.

Applicable Legislative Provisions

National Instrument 81-106 Investment Fund Continuous Disclosure, ss. 9.2, 17.1.

March 31, 2010




(the Jurisdiction)




(the Partnership) AND


(the Promoter, and together with the Partnership,

the Filers)



The Ontario Securities Commission (the Decision Maker) has received an application from the Filers on behalf of the Partnership for a decision under the securities legislation of Ontario (the Legislation), for an exemption pursuant to section 17.1 of National Instrument 81-106 -- Investment Fund Continuous Disclosure (NI 81-106) from the requirement to prepare and file an annual information form (an AIF) in Section 9.2 of NI 81-106 for each financial year (the Exemption Sought).


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


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

1. The Partnership was formed pursuant to the provisions of the Limited Partnerships Act (Ontario) on September 9, 2008.

2. Skylon Big Three STAR General Partner Inc. is the general partner of the Partnership (the General Partner). The General Partner was incorporated under the provisions of the Business Corporations Act (Ontario) on September 9, 2008.

3. The principal office of the Partnership, the General Partner and the Promoter is located at 2 Queen Street, Twentieth Floor, Toronto, Ontario, M5C 3G7.

4. Neither the Partnership nor the Promoter is in default of securities legislation in Ontario.

5. The Partnership filed a final prospectus relating to its initial public offering in Ontario on December 10, 2008 and became a reporting issuer in Ontario.

6. The Promoter is a promoter of the Partnership.

7. The Partnership was formed to invest in the common shares of TD, RBC and BNS (the Selected Banks) while limiting the impact of possible declines in the market prices of the common shares of the Selected Banks. Returns may be generated during a period of approximately one year (the Investment Period) from a variety of sources including (a) premiums from writing covered call options in respect of the common shares of the Selected Banks, (b) appreciation in the market prices of the common shares of the Selected Banks, (c) dividends paid on the common shares of the Selected Banks, and (d) the use of leverage.

8. The Partnership was structured in such a manner that it would be dissolved on or before January 31, 2011, and is now expected to be dissolved by the end of April 2010. Upon dissolution, the limited partners of record holding the then outstanding Units are entitled to receive 99.99% of the assets of the Partnership remaining after payment of debts, liabilities and liquidation expenses of the Partnership.

9. The Partnership's objective is to provide investors with the opportunity for attractive after-tax returns by virtue of the Partnership's investment during the Investment Period in the common shares of the Selected Banks while limiting the impact of possible declines in the market prices of the common shares of the Selected Banks.

10. The limited partnership units of the Partnership (the Units) are not, and will not be, listed or quoted for trading on any stock exchange or market. The Units are also not redeemable by limited partners. Generally, Units are not transferred by the limited partners, since limited partners must be the holder of the Units on the last day of each fiscal year of the Partnership in order to obtain the desired tax deduction.

11. It is a term of the partnership agreement governing the Partnership that the general partner has the authority to manage, control, administer and operate the business and affairs of the Partnership, including the authority to take all measures necessary or appropriate for the business, or ancillary thereto, and to ensure that the Partnership complies with all necessary reporting and administrative requirements. The Promoter provides or will cause to be provided all of the administrative services required by the Partnership.

12. The limited partners of the Partnership have, by subscribing for Units, agreed to the irrevocable power of attorney contained in the partnership agreement and have thereby, in effect, consented to the making of this application.

13. Since its formation, the Partnership's activities have been limited to (i) completing the issue of the Units under its prospectus, (ii) investing its available funds in accordance with its investment objective, and (iii) incurring expenses as described in its prospectus.

14. On December 30, 2009, the Partnership redeemed all of its then outstanding Units, in exchange for cash equal to the net asset value per Unit on that date, with the exception of Units of the Partnership held by the initial limited partner in the Partnership, Skylon Big Three STAR Limited Partner Inc. (the Limited Partner), which were not redeemed, and remain outstanding.

15. Given that (a) the range of business activities conducted by the Partnership is limited, (b) the duration of the Partnership's existence will be short, (c) all Units of the Partnership except the Units held by the Limited Partner have been redeemed, (d) the Partnership will not issue any more Units, (e) annual financial statements and management reports of fund performance in respect of the year ending December 31, 2009 will be prepared and filed, and (f) the Partnership expects to terminate in April, 2010, the preparation and distribution of an AIF by the Partnership would not be of any benefit to the Limited Partner or former limited partners of the Partnership, and would impose a material financial burden on the Partnership.

16. The Filers are of the view that the Exemption Sought is not against the public interest, is in the best interests of the Partnership and the limited partners, and represents the business judgment of responsible persons uninfluenced by considerations other than the best interest of the Partnership and the limited partners.


The Decision Maker is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.

The decision of the Decision Maker under the Legislation is that the Exemption Sought is granted.

"Darren McKall"
Assistant Manager
Ontario Securities Commission