1997 Internal T.I. 970550A - : Mutual Fund Supp Ruling

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Principal Issues:

Supplementary ruling to implement certain changes. Closing of offering of partnership units will be made on or before XXXXXXXXXX but not later than XXXXXXXXXX.

Position:

Supplementary ruling given.

Reasons:

Previous supplementary rulings have been given in respect of similar changes.

XXXXXXXXXX

Attention: XXXXXXXXXX

Dear Sirs:

Re: Supplemental Advance Ruling

XXXXXXXXXX

This is in reply to your letter of XXXXXXXXXX in which you requested certain amendments to our advance income tax ruling, number 963674, dated XXXXXXXXXX, 1997 (the "Ruling") and is supplemental to the Ruling.

Unless otherwise used as proper names or defined herein, the capitalized terms used in this letter have the meanings assigned in the Ruling.

You have indicated, among other things, that the initial closing of the Offering will take place no later than XXXXXXXXXX and that the Redemption Fee Units distributed by the Partnership under the Distribution Agreement will be those of the Existing Funds and the New Funds as identified in the Ruling.

Accordingly, the Ruling is hereby amended as follows:

(1) Paragraphs 1 and 7 are revised to amend the references therein to "XXXXXXXXXX Tax Services Office" and "XXXXXXXXXX" and "XXXXXXXXXX Tax Services Office" to "XXXXXXXXXX Tax Services Office" and "XXXXXXXXXX" and "XXXXXXXXXX Tax Services Office", respectively.

(2) The third paragraph of paragraph 22 is revised to read as follows. References therein to "closing or closing of the/this Offering" have now been deleted.

"Immediately after the Offering, each Limited Partner's interest will equal the proportion of the total interest of all Limited Partners in the Partnership at that time that the number of Partnership Units held by such person is of the total number of Partnership Units of the Partnership outstanding after the Offering".

(3) The first sentence of the first paragraph of paragraph 23 is revised to read, after including the words "General Partner" therein, as follows:

"The Partnership, the General Partner, XXXXXXXXXX will enter into an agency agreement (the "Agency Agreement")."

(4) The second paragraph of paragraph 23 is revised to substitute, in the first two sentences thereof, XXXXXXXXXX, respectively, as follows:

"The Offering will take place during a period commencing after the filing by the Partnership of the final Prospectus and after the date of this ruling letter, and ending at the close of business on XXXXXXXXXX or such later date as may be agreed upon by the General Partner and the Agent, but in any event not later than XXXXXXXXXX (the "Offering Period"). The initial closing ("Initial Closing") under the Offering will take place on or about XXXXXXXXXX, but in any event no later than XXXXXXXXXX. All subsequent closings ("Subsequent Closings"), if any, will be completed by XXXXXXXXXX (or, if the General Partner and the Agent so agree, on or before XXXXXXXXXX)."

(5) The last sentence of paragraph 24 is revised to insert therein that the XXXXXXXXXX, as follows:

XXXXXXXXXX

(6) Paragraph 27 is revised to add the reference to "Existing Funds and New Funds", as follows:

"Pursuant to an agreement (the "Distribution Agreement") among the Funds, XXXXXXXXXX and the Partnership, the Partnership will be granted the exclusive right to arrange for the distribution of Redemption Fee Units in respect of the Existing Funds and the New Funds".

(7) The first sentence of the first paragraph of paragraph 28 is revised to add a reference to "Existing Funds" and "New Funds" and to delete the phrase "distributed by the Partnership" therein, as follows:

"Under the Distribution Agreement, the Partnership will arrange for the distribution of XXXXXXXXXX Units in respect of the Existing Funds and the New Funds only through registered dealers and will be required to pay registered dealers the Sales Commissions, as defined in paragraph 12, on each XXXXXXXXXX Unit so distributed."

(8) The last sentence of the third paragraph of paragraph 28 is revised, as follows, to clarify that when the Partnership's right to distribute units of the Existing Funds and the New Funds ceases, such right will not recommence:

"However, this particular right of XXXXXXXXXX is not, and will not be, a right of the Partnership, since the Partnership's right to distribute XXXXXXXXXX Units in respect of the Existing Funds and the New Funds, once it has ceased, will not recommence."

We confirm that the amendments, as stated in paragraphs (1) to (8) above, to the facts and proposed transactions described in the Ruling will not invalidate rulings A to J given, or any of the other comments made, therein.

(9) In respect of opinion II:

(i) subparagraph II(a) is revised to include therein the reference to "ruling C", as follows:

"the amount of any "expenditures" made by the Partnership, including, but not limited to, Sales Commissions and the issuance expenditures referred to above in rulings A and C, respectively, will be reduced by the total of", and

(ii) the references to "subsection 143.2(8) of the Act" and "subsection 143.2(10) of the Act" in subparagraph II(c) should read:

"proposed subsection 143.2(8) of the Act" and "proposed subsection 143.2(10) of the Act".

Yours truly

for Director
Resources, Partnerships and Trusts Division
Income Tax Rulings and Interpretations Directorate
Policy and Legislation Branch