A non-resident third party which does not have any office in Canada (the "Arranger") agrees to fund the payment of dealer commissions for sales of units of a mutual fund trust on the basis that the Arranger will receive deferred sales charges on the redemption of the fund units (which the fund agrees to withhold from the redemption proceeds and pay as directed by the Arranger) and also a monthly "Earned Basic Fee" for a specified number of years and calculated on the fund NAV from time to time. Although the fund and its manager are jointly and severally liable to pay the Earned Basic Fee, as between them they agree that the manager will be responsible for their payment, so that the contingent liability of the fund for the Earned Basic Fees is similar to that of a guarantor.
Ruling that this effective guarantee by the fund will not preclude it from qualifying under s. 132(6)(b) as a mutual fund trust.