RBC Global Asset Management Inc. et al.

Decision

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- relief from sections 15.3(2), 15.3(4)(c), 15.6(a)(i), 15.6(d), 15.8(2)(a) and 15.8(3)(a) of National Instrument 81-102 Mutual Funds to permit mutual funds that have not distributed securities under a simplified prospectus in a jurisdiction for 12 consecutive months to present performance data in sales communications for periods before the time when the mutual funds offered securities under a simplified prospectus -- each fund distributed its securities under prospectus exemptions prior to becoming a reporting issuer -- each fund has complied with the investment restrictions and practices in NI 81-102 since inception -- each fund will be managed substantially similarly after it commences distributing securities under a simplified prospectus -- each fund has prepared annual and interim financial statements in accordance with National Instrument 81-106 Investment Fund Continuous Disclosure since inception.

Applicable Legislative Provisions

National Instrument 81-102 Mutual Funds, ss.15.3(2), 15.3(4)(c), 15.6(a)(i), 15.6(b), 15.6(d), 15.8(2)(a), 15.8(3)(a), 19.1.

June 3, 2011

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO

(the Jurisdiction)

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

RBC GLOBAL ASSET MANAGEMENT INC.

(the Filer)

AND

RBC INSTITUTIONAL CASH FUND

RBC INSTITUTIONAL US$ CASH FUND

RBC INSTITUTIONAL LONG CASH FUND

RBC INSTITUTIONAL GOVERNMENT -

PLUS CASH FUND

(the Funds)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) for relief from sections 15.3(2), 15.3(4)(c), 15.6(a)(i), 15.6(d), 15.8(2)(a) and 15.8(3)(a) of National Instrument 81-102 Mutual Funds (NI 81-102), to permit the Funds to include past performance data for the Funds in sales communications notwithstanding that:

(a) the Funds have not distributed securities under a simplified prospectus for 12 consecutive months; and

(b) the performance data will relate to a period prior to the Funds offering securities under a simplified prospectus,

(collectively, the Requested Relief).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):

(a) the Ontario Securities Commission is the principal regulator for this application; and

(b) the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied on in British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, Northwest Territories, Nunavut and Yukon (together with Ontario, the Jurisdictions).

Interpretation

Defined terms contained in National Instrument 14-101 Definitions, NI 81-102, National Instrument 81-106 Investment Fund Continuous Disclosure (NI 81-106) and MI 11-102 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 Filer:

The Filer

1. The Filer is registered under securities legislation in each of the Jurisdictions in the categories of portfolio manager and exempt market dealer, and has applied for registration under the Securities Act (Ontario) as an investment fund manager. The Filer is organized under the Canada Business Corporations Act and has its head office in Toronto, Ontario.

2. The Filer was formed through the amalgamation of Phillips, Hager & North Investment Management Ltd. with its affiliate, RBC Asset Management Inc., effective November 1, 2010 (the Amalgamation). Following the Amalgamation, the head office of the Filer is located in Ontario.

3. The Filer is the manager and promoter of the Funds.

The Funds

4. The Funds are open-ended mutual fund trusts created under the laws of the Province of British Columbia on January 26, 2010, and are designed for institutional and high net worth investors, including treasury managers and others responsible for managing corporate and institutional cash resources, professional fund managers and other large institutional investors that can meet minimum investment requirements.

5. Series I, Series J and Series O units of the Funds (the Prospectused Units) have been distributed to eligible investors on a prospectus-exempt basis in accordance with National Instrument 45-106 Prospectus and Registration Exemptions in one or more Jurisdictions since their inception on January 26, 2010.

6. Series S units of the Funds, other than the RBC Institutional Long Cash Fund, were created on March 11, 2011 and are available for distribution to eligible Canadian investors in one or more Jurisdictions on a prospectus-exempt basis. The RBC Institutional Long Cash Fund does not currently offer Series S units. The Funds may in the future offer additional series of units to eligible Canadian investors in one or more Jurisdictions on a prospectus-exempt basis.

7. The Filer is not in default of securities legislation in any of the Jurisdictions.

8. The Filer has filed a preliminary simplified prospectus and annual information form in respect of the Prospectused Units on April 5, 2011. Upon the issuance of a receipt for the final simplified prospectus (the Simplified Prospectus) and annual information form for the Prospectused Units, the Funds will become reporting issuers in each of the Jurisdictions and will become subject to the requirements of NI 81-102. The Funds will also become subject to the requirements of NI 81-106 that apply only to investment funds that are reporting issuers. Despite the foregoing, the Series S Units of the Funds will continue to be offered for distribution by private placement only.

9. The Funds will be managed substantially similarly after they become reporting issuers as they were prior to becoming reporting issuers. As a result of the Funds becoming reporting issuers:

(a) the Funds' investment objectives are not intended to change, other than to provide additional detail as may be required by National Instrument 81-101 Mutual Fund Prospectus Disclosure;

(b) the management fee charged to the Funds in respect of their existing series of units will not change;

(c) the day-to-day administration of the Funds will not change, other than to comply with the additional regulatory requirements associated with being a reporting issuer (none of which would have impact on the portfolio management of the Funds) and to provide additional features that are available to investors of mutual funds managed by the Filer, as will be described in the Simplified Prospectus for the Funds; and

(d) as of the date of this decision, the Filer does not expect the management expense ratio (MER) of the Prospectused Units of the Funds to increase by more than 0.10%, which the Filer considers to be an immaterial amount.

Reasons for the Requested Relief

10. Section 15 of NI 81-102 will not permit the Funds to include their past performance data in sales communications for periods occurring prior to the Funds becoming reporting issuers.

11. Absent the Requested Relief, sales communications pertaining to the Funds:

(a) will not be permitted to include performance data until the Funds have distributed such securities under a simplified prospectus in a Jurisdiction for 12 consecutive months; and

(b) will not be permitted to include past performance data for the period from the inception of the Funds to the date they become reporting issuers.

11. Since their inception, the Funds have voluntarily complied with the investment restrictions and practices contained in NI 81-102.

12. The Filer has filed a separate application for exemptive relief from certain provisions of NI 81-106 (the NI 81-106 Relief) to enable the Funds to include in their MRFPs the financial highlights and performance data of the Funds that are derived from their annual and interim financial statements for the time periods prior to their becoming reporting issuers.

13. The performance and other financial data of the Funds for the time period before they become reporting issuers are significant and meaningful information for existing and prospective investors of the Funds.

Decision

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

The decision of the principal regulator under the Legislation is that the Requested Relief is granted provided that:

(a) any sales communication that contains performance data of a Fund relating to a period prior to when the Fund was a reporting issuer discloses:

(i) that the Fund was not a reporting issuer during such period; and

(ii) that the expenses of the Fund would have been higher during such period had the Fund been subject to the additional regulatory requirements applicable to a reporting issuer;

(b) the information provided for each Fund under the heading "Fund Expenses Indirectly Borne by Investors" in Part B of the Simplified Prospectus, based on the MER for the Prospectus Units for the Fund's financial year ended December 31, 2010, be accompanied by disclosure that:

(i) the information is based on the MER of the Fund for a prior period when series of units of the Fund were offered privately; and

(ii) the Fund's MER may increase as a result of the Fund offering its series of units under the Simplified Prospectus;

(c) the Funds' Simplified Prospectus incorporates by reference the Funds' annual financial statements for the financial year ended December 31, 2010 and the related annual MRFPs until such documents are superseded by more current financial statements and MRFPs of the Funds; and

(d) the Funds prepare their MRFPs in accordance with the NI 81-106 Relief.

"Darren McKall"
Manager, Investment Funds Branch
Ontario Securities Commission