Driehaus Capital Management LLC

Decision

Headnote

Relief granted from margin rate applicable to U.S. money market mutual funds in calculation of market risk in Form 31-103F1 -- margin rate for funds qualified for distribution in Canada is 5%, while funds qualified for distribution in U.S. is 100% -- similar regulation of money market funds -- NI 31-103 -- Ontario-only decision, filer provided undertaking not to passport decision to jurisdictions outside of Ontario.

Applicable Legislative Provisions

National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations, ss. 12.1, 15.

May 10, 2012

IN THE MATTER OF

NATIONAL INSTRUMENT 31-103

REGISTRATION REQUIREMENTS, EXEMPTIONS

AND ONGOING REGISTRANT OBLIGATIONS

("NI 31-103")

AND

IN THE MATTER OF

DRIEHAUS CAPITAL MANAGEMENT LLC

(the "Filer")

DECISION

Background

The Director has received an application from the Filer for a decision under subsection 15.1 of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations ("NI 31-103") for relief from the requirement in section 12.1 of NI 31-103 that the Filer calculate its excess working capital using Form 31-103F1 (the "Form F1") only to the extent that the Filer be able to apply the same margin rate to investments in money market mutual funds qualified for sale by prospectus in the United States of America as is the case for money market mutual funds qualified for sale in a province of Canada when calculating market risk pursuant to Line 9 of Form F1 (the "Exemption Sought").

Interpretation

Defined terms contained in NI 31-103 have the same meanings in this decision (the "Decision") unless they are otherwise defined in this Decision.

Representations

This Decision is based on the following facts represented by the Filer:

1. The Filer is a limited liability company established under the laws of the State of Delaware in the United States of America ("U.S.") with its head office located in Chicago, Illinois.

2. The Filer is registered as an adviser in the category of portfolio manager in the province of Ontario.

3. The Filer is not a reporting issuer in any jurisdiction of Canada and is not, to its knowledge, in default of securities regulation in any jurisdiction of Canada, other than as disclosed in this Decision.

4. The Filer is a privately-held independent investment adviser providing discretionary advisory services to a diverse group of U.S. and non-U.S. clients, including corporate pension plans, endowments, foundations, single and multi-family offices, U.S. and non-U.S. mutual funds, privately offered pooled investment vehicles or pooled accounts and individuals. The Filer employs active equity and credit investment management strategies. More than 95% of the Filer's revenues are received from clients in jurisdictions other than Canada.

5. The Filer is registered with the U.S. Securities and Exchange Commission (the "SEC") as an investment adviser under the United States Investment Advisers Act of 1940, as amended (the "1940 Act").

6. The Filer invests its cash balances in money market mutual funds qualified for sale by prospectus in the U.S., specifically money market mutual funds which are registered investment companies under the United States Investment Company Act of 1940, as amended (the "Investment Company Act"), and which comply with Rule 2a-7 thereunder ("Rule 2a-7").

7. It is not practicable for the Filer to invest its cash balances in money market mutual funds qualified for sale by prospectus in a province of Canada because: such mutual funds are unlikely to be qualified for sale in the U.S.; as they are not offered by the financial institution used by the Filer they are not easily used for cash management purposes; there may be foreign exchange issues as the Filer invests in U.S. dollar denominated securities; there may be tax implications; and the Filer lacks familiarity with Canadian money market funds and their issuers.

8. Under Schedule 1 of Form F1 an investment in the securities of a money market mutual fund qualified for sale by prospectus only in the U.S. would be subject to a margin rate of 100% of the market value of such investments for the purposes of Line 9 of Form F1.

9. The Filer would have excess working capital as calculated using Form F1 of less than zero unless relief is granted, and could not meet the capital requirements under NI 31-103.

10. The margin rate required for a money market mutual fund qualified for sale by prospectus in a province of Canada is 5% of the market value of such investment, as opposed to 100% for the market value of investments in a money market mutual fund qualified for sale by prospectus in the U.S.

11. The regulatory oversight and the quality of investments held by a money market mutual fund qualified for sale by prospectus in each of the U.S. and a province of Canada is similar. In particular Rule 2a-7 sets out requirements dealing with portfolio maturity, quality, diversification and liquidity, which are similar to requirements under National Instrument 81-102 Mutual Funds ("NI 81-102").

12. The Filer undertakes not to rely upon section 4.7(1) Multilateral Instrument 11-102 Passport System to passport this decision into jurisdictions outside of Ontario.

Decision

The Director is satisfied that the Decision meets the test set out in the securities legislation of Ontario (the "Legislation") for the Director to make the Decision.

The Decision of the Director under the Legislation is that the Exemption Sought is granted so long as:

(a) any money market mutual fund invested in by the Filer is qualified for sale by prospectus in the U.S. as a result of being a registered investment company under the Investment Company Act, which complies with Rule 2a-7;

(b) the requirements for money market mutual funds under Rule 2a-7 or any successor rule or legislation are similar to the requirements for Canadian money market mutual funds under NI 81-102 or any successor rule or legislation; and

(c) the Filer is registered with the SEC as an investment adviser under the 1940 Act.

"Marrianne Bridge"
Deputy Director, Compliance and Registrant Regulation
Ontario Securities Commission