Headnote

National Policy 11-203 – Process for Exemptive Relief Applications in Multiple Jurisdictions – Exemptive relief granted to an exchange traded fund from certain mutual fund requirements relating to calculation and payment of redemptions – Relating to new issuance of preferred shares – Since investors will generally buy and sell units through the TSX, there are adequate protections and it would not be prejudicial to investors – National Instrument 81-102 – Mutual Funds

Applicable Legislative Provisions

National Instrument 81-102 – Mutual Funds, subsections 10.3 and 10.4(1).

December 1, 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 5BANC SPLIT INC.

(the Filer)

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 exemption from the following sections of National Instrument 81-102 - Mutual Funds (NI 81-102) with respect to the Class C preferred shares, Series 1 (the Class C Preferred Shares) proposed to be issued by the Filer as described in a preliminary short form prospectus dated November 25, 2011 (the Preliminary Prospectus):

(a) Section 10.3, which requires that the redemption price of a security of a mutual fund to which a redemption order pertains shall be the net asset value of a security of that class, or series of class, next determined after the receipt by the mutual fund of the order; and

(b) Paragraph 10.4(1)(a), which requires that a mutual fund shall pay the redemption price for securities that are the subject of a redemption order within three business days after the date of calculation of the net asset value per security used in establishing the redemption price,

(collectively, the Exemption Sought).

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 subsection 4.7(1) of Multilateral Instrument 11-102 - Passport System (MI 11-102) is intended to be relied upon in the jurisdictions of British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador.

Interpretation

Terms defined in National Instrument 14-101 - Definitions and MI 11-102 have the same meaning if used in this decision unless otherwise defined.

Representations

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

The Filer

1. The Filer was incorporated under the Business Corporations Act (Ontario) on November 9, 2001. The Filer’s head office is located in Toronto, Ontario. The Filer is not in default of securities legislation in any province of Canada.

2. On October 7, 2011, the holders of the Class B capital shares (the Capital Shares) approved a share capital reorganization (the Reorganization). The Reorganization will permit holders of Capital Shares to extend their investment in the Filer beyond the originally scheduled redemption date of December 15, 2011 for an additional 5 years. The Reorganization also provides holders of Capital Shares with a special right of retraction (the Special Retraction Right) to replace the originally scheduled redemption date of December 15, 2011. Under the Reorganization, holders of Capital Shares who do not wish to extend their investment may choose to have their shares redeemed on December 15, 2011. If the Reorganization is not implemented, the Special Retraction Right will not become effective and the Capital Shares will be redeemed by the Filer on December 15, 2011 in accordance with their terms.

3. The Class C Preferred Shares are being offered in order to maintain the leveraged “split share” structure of the Filer and will be issued on December 15, 2011 (the Offering) such that there will be one Capital Share issued for each Class C Preferred Share issued and outstanding on and after December 15, 2011.

4. The Filer will make the Offering to the public pursuant to the Preliminary Prospectus and a final short form prospectus (the Final Prospectus).

5. The Capital Shares will continue to be listed and posted for trading on The Toronto Stock Exchange (the TSX) and the Class C Preferred Shares are expected to be listed and posted for trading on the TSX. An application requesting conditional listing approval has been made by the Filer to the TSX.

6. The primary undertaking of the Filer is to invest the common shares (the Portfolio Shares) of Bank of Montreal, The Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Royal Bank of Canada and The Toronto-Dominion Bank in order to provide holders of the Class C Preferred Shares with fixed cumulative preferential dividends and to provide holders of the Capital Shares with a leveraged investment and excess dividends, if any, subject to the prior rights of holders of Class C Preferred Shares and after payment of the expenses of the Company and dividends payable on the Class C Preferred Shares. The Portfolio Shares are the only material assets of the Filer.

7. The expenses incurred in connection with the Offering, being the costs of the preparation and filing of the Preliminary Prospectus and the Final Prospectus, will be borne by the Filer.

8. The net proceeds of the Offering (after deducting the agents’ fees and expenses of the Offering) will be used by the Filer to fund the redemption of all of the issued and outstanding Class B preferred shares of the Filer on December 15, 2011 as well as those Capital Shares being redeemed pursuant to the Special Retraction Right.

9. It is the policy of the Filer to hold the Portfolio Shares and to not engage in any trading of the Portfolio Shares, except:

(i) to fund retractions or redemptions of Capital Shares and Class C Preferred Shares;

(ii) following receipt of stock dividends on the Portfolio Shares;

(iii) in the event of a take-over bid for any of the Portfolio Shares;

(iv) if necessary, to fund any shortfall in the distribution on Class C Preferred Shares; and

(v) to meet obligations of the Filer in respect of liabilities including extraordinary liabilities.

10. The Class C Preferred Share distributions will be funded primarily from the dividends received on the Portfolio Shares. If necessary, any shortfall in the distributions on the Class C Preferred Shares will be funded with proceeds from the sale of Portfolio Shares.

11. The Capital Shares and the Class C Preferred Shares may be surrendered for retraction at any time. Retraction payments for the Capital Shares and the Class C Preferred Shares will be made on the Retraction Payment Date (as defined in the Preliminary Prospectus) provided the Capital Shares and the Class C Preferred Shares have been surrendered for retraction no later than ten business days before the 15^th day of a month. While the Filer’s Unit Value (as defined in the Preliminary Prospectus) is calculated weekly, the retraction price for the Capital Shares and the Class C Preferred Shares will be determined based on the Unit Value in effect as at the Valuation Date (as defined in the Preliminary Prospectus).

12. Any Capital Shares and Class C Preferred Shares outstanding on December 15, 2016 will be redeemed by the Filer on such date.

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 Exemption Sought is granted as follows:

(a) Section 10.3 – to permit the Filer to calculate the retraction price for the Class C Preferred Shares in the manner described in the Preliminary Prospectus and on the applicable Valuation Date as defined in the Preliminary Prospectus; and

(b) Paragraph 10.4(1)(a) – to permit the Filer to pay the retraction price for the Class C Preferred Shares on the Retraction Payment Date as defined in the Preliminary Prospectus.

“Chantal Mainville”

Chantal Mainville

Acting Manager, Investment Funds Branch

ONTARIO SECURITIES COMMISSION