2004 Ruling 2004-0073171R3 - Creation and reclassification of classes of units -- summary under Disposition

A mutual fund trust wishes for there to be better controls to avoid becoming majority-owned by non-residents and potentially losing its MFT status in light of s. 132(7). Ruling that the redesignation (pursuant to amendments of the trust indenture) of existing units of a mutual fund trust into into units of two classes with substantially the same rights as the existing units, namely, Class 1 units (which may be held by non-residents and which will be convertible into Class 2 units only be Canadian residents), and Class 2 units (which may only be held by residents and are listed only on a Canadian exchange and may be convertible into Class 1 units) and will always exceed the number of Class 1 units, will not result in a resettlement of the trust or a disposition of the existing units.