BlackRock Investments Canada Inc. and BlackRock Institutional Trust Company, N.A.

Headnote

NP 11-203 -- Process for Exemptive Relief Applications in Multiple Jurisdictions -- Relief from section 111 of the Securities Act (Ontario) granted to permit filers, following their acquisition by another organization, to purchase debt securities of related entities in the secondary market on behalf of public mutual funds they manage and to purchase securities of related entities in the secondary market on behalf of pooled funds they manage -- relief conditional on IRC approval and compliance with independent pricing and transparency requirements.

Applicable Legislative Provisions

Securities Act (Ontario), ss. 111(2)(a), 111(2)(c)(ii), 111(3), 113.

National Instrument 81-107 Independent Review Committee for Investment Funds, s. 6.2.

July 25, 2012

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

BLACKROCK INVESTMENTS CANADA INC.

(BlackRock Investments) AND

BLACKROCK INSTITUTIONAL TRUST COMPANY, N.A.

(BTC) (the Filers)

AND

IN THE MATTER OF

THE NI 81-102 FUNDS (as defined below) AND

THE BLACKROCK INVESTMENTS POOLED FUNDS

(as defined below)

DECISION

Background

The securities regulatory authority or regulator in Ontario received an application (the Application) from the Filers under the securities legislation of the principal regulator (the Legislation) for a decision providing an exemption from the requirement that prohibits a mutual fund from knowingly making or holding an investment in any person or company who is a substantial security holder of the mutual fund, its management company or distribution company or in an issuer in which any person or company who is a substantial security holder of the mutual fund, its management company or its distribution company has a significant interest (in each case, a Related Issuer), in order to permit

(i) existing mutual funds and future mutual funds of which BlackRock Investments is the investment fund manager to which National Instrument 81-102 -- Mutual Funds (NI 81-102) applies (each, an NI 81-102 Fund and, collectively, the NI 81-102 Funds) and existing mutual funds and future mutual funds of which BlackRock Investments is the investment fund manager to which NI 81-102 does not apply (each, a BlackRock Investments Pooled Fund and, collectively the BlackRock Investments Pooled Funds) to purchase certain non-exchange-traded debt securities of a Related Issuer in the secondary market; and

(ii) a BlackRock Investments Pooled Fund to purchase exchange-traded securities of a Related Issuer in the secondary market,

(the Exemption Sought).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions:

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

(b) the Filers have provided notice that section 4.7(1) of Multilateral Instrument 11-102 -- Passport System (MI 11-102) is intended to be relied upon in respect of the Exemption Sought in Alberta, British Columbia, Saskatchewan, New Brunswick, Nova Scotia and Newfoundland and Labrador (the Passport Jurisdictions).

Interpretation

Terms defined in MI 11-102, National Instrument 14-101 -- Definitions, NI 81-102 and National Instrument 81-107 -- Independent Review Committee for Investment Funds (NI 81-107), have the same meaning if used in this decision, unless otherwise defined.

Representations

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

1. The head office of BlackRock Investments is located in Toronto, Ontario. The head office of BTC is located in San Francisco, California.

2. BlackRock Investments is registered as a portfolio manager, investment fund manager and exempt market dealer in Ontario.

3. BTC is relying on a combination of the international adviser exemption in NI 31-103 in Ontario and in each of the Passport Jurisdictions (the "Jurisdictions") and the sub-adviser exemption in (i) OSC Rule 35-502 in Ontario, (ii) a blanket order in Quebec and (iii) discretionary exemptive relief in the other Passport Jurisdictions.

4. BlackRock Investments is, or will be, the investment fund manager of each of the NI 81-102 Funds and the BlackRock Investments Pooled Funds, each of which is, or will be, organized under the laws of Ontario or Alberta.

5. Each of the NI 81-102 Funds is or will be a reporting issuer in each of the Jurisdictions and is or will be listed on the Toronto Stock Exchange.

6. None of the BlackRock Investments Pooled Funds are, or will be, a reporting issuer in any of the Jurisdictions except for certain BlackRock Investments Pooled Funds which will be reporting issuers in Quebec as a result of filing a non-offering prospectus in Quebec.

7. One or more of the NI 81-102 Funds and the BlackRock Investments Pooled Funds is, or will be, an index fund, the investment objective of which is to replicate the performance of an index.

8. BlackRock Investments is, or will be, the primary portfolio manager of each of the NI 81-102 Funds and the BlackRock Investments Pooled Funds.

9. BTC or an affiliated or third party portfolio manager is, or may be, a sub-adviser of each of the NI 81-102 Funds and the BlackRock Investments Pooled Funds.

10. Each of the Filers is currently, indirectly, a subsidiary of BlackRock, Inc. (BlackRock).

11. With respect to the ownership of BlackRock:

(i) the PNC Financial Services Group, Inc. (PNC) holds, indirectly through its holding in BlackRock, approximately 21.0% of the outstanding voting securities of BlackRock Investments and BTC and approximately 21.7% of the outstanding securities of BlackRock Investments and BTC; and

(ii) the public, BlackRock employees and other investors will hold, indirectly through their holdings in BlackRock, the remaining outstanding voting securities and outstanding securities of BlackRock Investments and BTC.

12. On March 7, 2012, BlackRock completed the acquisition of a 100% interest in Claymore Investments, Inc. (the "Transaction"). As a result of the Transaction, Claymore Investments, Inc. ("Claymore") became an indirect, wholly-owned subsidiary of BlackRock. Following the Transaction, Claymore was continued under the laws of the province of Alberta and changed its name to BlackRock Investments Canada Inc.

13. Each of BlackRock and PNC is a reporting issuer, the equity securities of which are listed on the New York Stock Exchange.

14. BlackRock is a Related Issuer with respect to an NI 81-102 Fund or a BlackRock Investments Pooled Fund because it is a substantial security holder of BlackRock Investments.

15. BlackRock may, from time to time, hold a significant interest in other issuers which will be Related Issuers.

16. PNC will be a Related Issuer with respect to an NI 81-102 Fund or a BlackRock Investments Pooled Fund because it will be a substantial security holder of BlackRock Investments and any issuer in which PNC has a significant interest will also be a Related Issuer.

17. None of the Filers, the NI 81-102 Funds or the BlackRock Investments Pooled Funds is in default of securities legislation in any of the Jurisdictions.

18. BlackRock Investments has established, or will establish, an independent review committee (IRC) in respect of each NI 81-102 Fund in accordance with the requirements of NI 81-107.

19. BlackRock Investments has established, or will establish, an IRC (the members of which may also be members of the IRC of the NI 81-102 Funds) in respect of each BlackRock Investments Pooled Fund which relies on the Exemption Sought.

20. The IRC of each BlackRock Investments Pooled Fund is, or will be, composed by BlackRock Investments in accordance with section 3.7 of NI 81-107 and is or will be expected to comply with the standard of care set out in section 3.9 of NI 81-107.

21. The mandate of the IRC of a BlackRock Investments Pooled Fund will include reviewing and approving purchases of securities issued by a Related Issuer on behalf of a BlackRock Investments Pooled Fund.

22. BlackRock Investments cannot rely on the exemption under section 6.2(2) of NI 81-107 in respect of purchases of securities of a Related Issuer by the BlackRock Investments Pooled Funds because that exemption does not apply to the BlackRock Investments Pooled Funds.

23. Some of the Related Issuers are, or may be, issuers of non-exchange-traded debt securities that have an "approved credit rating" within the meaning of NI 81-102. The Filers consider that the NI 81-102 Funds and the BlackRock Investments Pooled Funds should have access to such securities for the following reasons:

(a) there is currently and has been for several years a very limited supply of such securities; to limit the supply available to the NI 81-102 Funds and the BlackRock Investments Pooled Funds even further by removing debt issued by a Related Issuer puts the NI 81-102 Funds and the BlackRock Investments Pooled Funds at a competitive disadvantage and may increase the cost a fund pays for available securities;

(b) diversification is reduced to the extent that an NI 81-102 Fund or a BlackRock Investments Pooled Fund is limited with respect to investment opportunities; and

(c) to the extent that an NI 81-102 Fund or a BlackRock Investments Pooled Fund is trying to track or outperform a benchmark, it is important for the NI 81-102 Fund or the BlackRock Investments Pooled Fund to be able to purchase any securities included in the benchmark; debt securities of the Related Issuers may be included in a number of debt indices.

24. BlackRock Investments is seeking the Exemption Sought because securities of BlackRock, PNC or other Related Issuers that are exchange-traded may be appropriate for the BlackRock Investments Pooled Funds to invest in and debt securities of BlackRock, PNC, or other Related Issuers that are non-exchange traded may be appropriate for the NI 81-102 Funds or the BlackRock Investments Pooled Funds to invest in.

25. In respect of the NI 81-102 Funds and the BlackRock Investments Pooled Funds which are or will be index funds, the Exemption Sought is required because exchange-traded and non-exchange-traded securities of BlackRock, PNC or other Related Issuers may be included in an index which an NI 81-102 Fund or a BlackRock Investments Pooled Fund seeks to replicate.

26. Each purchase of non-exchange-traded debt securities of a Related Issuer will occur in the secondary market and not under primary distributions or treasury offerings of a Related Issuer.

27. Each purchase of a non-exchange-traded debt security of a Related Issuer purchased by a NI 81-102 Fund or a BlackRock Investments Pooled Fund will have, at the time of the purchase, an "approved credit rating" by an "approved credit rating organization" within the meaning of those terms in NI 81-102.

28. If the purchase by an NI 81-102 Fund or a BlackRock Investments Pooled Fund of non-exchange-traded debt securities issued by a Related Issuer involves an inter-fund trade with another fund to which NI 81-107 applies, the provisions of section 6.1(2) of NI 81-107 will apply to such transactions.

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 Exemptions Sought is granted:

(a) to permit an NI 81-102 Fund or a BlackRock Investments Pooled Fund to make and hold an investment in non-exchange-traded debt securities of a Related Issuer in the secondary market on the following conditions:

A. the purchase or holding is consistent with, or is necessary to meet, the investment objective of the NI 81-102 Fund or the BlackRock Investments Pooled Fund;

B. the applicable IRC of the NI 81-102 Fund or the BlackRock Investments Pooled Fund has approved the transaction in accordance with section 5.2(2) of NI 81-107;

C. BlackRock Investments complies with section 5.1 of NI 81-107 and BlackRock Investments and the applicable IRC of the NI 81-102 Fund or the BlackRock Investments Pooled Fund comply with section 5.4 of NI 81-107 for any standing instructions the applicable IRC provides in connection with the transaction;

D. the price payable for the security is not more than the ask price of the security;

E. the ask price of the security is determined as follows:

(1) if the purchase occurs on a marketplace, the price payable is determined in accordance with the requirements of that marketplace; or

(2) if the purchase does not occur on a marketplace,

a. the NI 81-102 Fund or the BlackRock Investments Pooled Fund may pay the price for the security at which an independent, arm's-length seller is willing to sell the security, or

b. if the NI 81-102 Fund or the BlackRock Investments Pooled Fund does not purchase the security from an independent, arm's-length seller, consistent with Commentary 7 of section 6.1 of NI 81-107, the NI 81-102 Fund or the BlackRock Investments Pooled Fund must pay the price quoted publicly by an independent marketplace or obtain, immediately before the purchase, at least one quote from an independent, arm's-length purchaser or seller and not pay more than that quote;

F. the transaction complies with any applicable "market integrity requirements" as defined in NI 81-107; and

G. no later than the time the fund files its annual financial statements, in the case of an NI 81-102 Fund, and no later than the 90th day after the end of each financial year, in the case of a BlackRock Investments Pooled Fund, BlackRock Investments files with the securities regulatory authority or regulator the particulars of any such investments; and

(ii) to permit a BlackRock Investments Pooled Fund to make and hold an investment in exchange-traded securities of a Related Issuer in the secondary market on the following conditions:

A. the purchase or holding is consistent with, or is necessary to meet, the investment objective of the BlackRock Investments Pooled Fund;

B. the IRC of the BlackRock Investments Pooled Fund has approved the transaction in accordance with section 5.2(2) of NI 81-107;

C. the purchase is made on an exchange on which the securities are listed and traded; and

D. no later than the 90th day after the end of each financial year, BlackRock Investments files with the securities regulatory authority or regulator the particulars of any such investments.