September 13, 2001
For Immediate Release

Securities Regulators Provide Flexibility to Mutual Funds Affected by Closure of U.S. Markets

Vancouver - Canadian securities regulators today issued orders to assist the mutual fund industry in serving their clients' interests in the wake of the continued closure of U.S. securities and derivatives markets.

The orders issued by members of the Canadian Securities Administrators (CSA) provide flexibility to funds that have to determine the prices of U.S. securities in order to calculate the funds' net asset values. Specifically, the orders state that a fund that has a material exposure to U.S. securities that are not trading (defined as five per cent or more of the fund's total value) may choose to be exempted from having to provide a valuation for the fund while the markets remain closed. If a fund chooses to use this exemption, it may not redeem, sell or permit switches in the fund.

Funds that choose not to use the exemption, and funds with less than five per cent exposure to U.S. securities, will have to calculate their net asset values by estimating the fair value of their U.S. securities. Investors will be able to redeem, purchase or switch units in these funds.

"This action was taken to give mutual fund managers flexibility in determining the best course of action for meeting their obligations to properly value funds and to allow investors access to those funds," said Douglas Hyndman, Chair of the CSA, which represents the 13 provincial and territorial securities commissions.

Mr. Hyndman also praised the mutual fund industry for working closely with regulators to identify issues and develop solutions.

"The Canadian mutual fund industry has responded quickly to the situation in the U.S. and has worked with regulators to promote investors' best interests," Mr. Hyndman said.

The orders take effect today and are in place until U.S. markets resume operations - expected tomorrow or Monday. If U.S. markets remain closed, the orders will expire next Wednesday and regulators will review the situation.

For more information:

Frank Switzer
Ontario Securities Commission
(416) 593-8120

Denis Dube
Quebec Securities Commission
(514) 940-2163

Andy Poon
B.C. Securities Commission
(604) 899-6880

Joni Delaurier
Alberta Securities Commission
(403) 297-4481