CI Investments Inc. and CI Private Counsel LP

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- relief granted from the self-dealing provisions in section 13.5(2) of National Instrument 31-103 Registration Requirements to permit inter-fund trades between mutual funds, pooled funds, closed-end funds and managed accounts managed by the same manager or an affiliate of the same manager -- inter-fund trades will comply with conditions in s. 6.1(2) of National Instrument 81-107 Independent Review Committee for Investment Funds , including independent review committee approval or client consent.

Applicable Legislative Provisions

National Instrument 31-103 Registration Requirements -- ss. 13.5(2)(b), 15.1.

National Instrument 81-107 Independent Review Committee for Investment Funds -- s. 6.1(2).

March 16, 2010

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

CI INVESTMENTS INC. AND

CI PRIVATE COUNSEL LP

(the Filers)

and

THE INVESTMENT PORTFOLIO MANAGERS

(as defined below)

DECISION

Background

The principal regulator in the Jurisdiction has received an application (the Application) from the Filers for a decision (the Exemption Sought) under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) exempting each Filer, or an affiliate of a Filer, (collectively, the Investment Portfolio Managers and, individually, an Investment Portfolio Manager) that is the manager and/or trustee of, and/or the portfolio adviser to:

(a) an existing mutual fund or future mutual fund of which the Investment Portfolio Manager is the manager, portfolio adviser and/or trustee and to which National Instrument 81-102 - Mutual Funds (NI 81-102) applies (each, an NI 81-102 Fund and, collectively, the NI 81-102 Funds);

(b) an existing mutual fund or future mutual fund of which the Investment Portfolio Manager is the manager, portfolio adviser and/or trustee and to which NI 81-102 and National Instrument 81-107 -- Independent Review Committee for Investment Funds (NI 81-107) do not apply (each, a Pooled Fund and, collectively, the Pooled Funds);

(c) an existing investment fund or future investment fund of which the Investment Portfolio Manager is the manager, portfolio adviser and/or trustee and to which NI 81-107 applies but to which NI 81-102 does not apply (each, a Closed-End Fund and, collectively, the Closed-End Funds); or

(d) a fully managed account advised by an Investment Portfolio Manager (each, a Managed Account and, collectively, the Managed Accounts),

from the prohibition in Section 13.5(2)(b) of National Instrument 31-103 -- Registration Requirements and Exemptions (NI 31-103) to permit:

(e) an NI 81-102 Fund to purchase securities from or sell securities to a Pooled Fund that is:

(i) an associate of the Investment Portfolio Manager of the NI 81-102, or of an affiliate of such Investment Portfolio Manager that has access to, or participates in formulating, an investment decision made on behalf of the NI 81-102 Fund or advice to be given to the NI 81-102 Fund, (together with the Investment Portfolio Manager, an "Investment Portfolio Responsible Person"); or

(ii) an investment fund for which an Investment Portfolio Responsible Person of the NI 81-102 Fund acts as an adviser;

(f) a Pooled Fund to purchase securities from, or sell securities to, another Pooled Fund, an NI 81-102 Fund or a Closed-End Fund (collectively, the Funds and, individually, a Fund) that is:

(i) an associate of an Investment Portfolio Responsible Person of the Pooled Fund; or

(ii) an investment fund for which an Investment Portfolio Responsible Person of the Pooled Fund acts as an adviser;

(g) a Closed-End Fund to purchase securities from, or sell securities to a Pooled Fund that is:

(i) an associate of an Investment Portfolio Responsible Person of the Closed-End Fund; or

(ii) an investment fund for which an Investment Portfolio Responsible Person of the Closed-End Fund acts as an adviser; and

(h) a Managed Account to purchase securities from, or sell securities to, a Fund where the Fund is:

(i) an associate of an Investment Portfolio Responsible Person of the Managed Account; or

(ii) an investment fund for which an Investment Portfolio Responsible Person of the Managed Account acts as an adviser,

(collectively, the Inter-Fund Trades).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions:

(a) the Ontario Securities Commission is the principal regulator for the Application; and

(b) the Filers have provided notice that Section 4.7 of Multilateral Instrument 11-102 - Passport System (MI 11-102) is intended to be relied upon in respect of the Exemption Sought in British Columbia, Alberta, Saskatchewan, Manitoba, Québec, New Brunswick, Prince Edward Island, Nova Scotia, Newfoundland and Labrador, Northwest Territories, Yukon and Nunavut (the Passport Jurisdictions and, together with the Jurisdiction, the Jurisdictions).

Interpretation

Terms defined in MI 11-102, National Instrument 14-101 -- Definitions, NI 31-103, NI 81-102 or NI 81-107 have the same meaning if used in this Decision, unless otherwise defined.

Representations

1. Each Fund is, or will be, an investment fund that is a trust, a corporation or a limited partnership established under the laws of a Jurisdiction or Canada. A Filer, or an affiliate of a Filer, will be the manager of each Fund.

2. Each NI 81-102 Fund and Closed-End Fund is, or will be, a reporting issuer in one or more Jurisdictions.

3. An Investment Portfolio Manager is, or will be, the manager, portfolio adviser and/or trustee of each Fund and will be the adviser to each Managed Account.

4. A Fund may be an associate of an Investment Portfolio Manager or an Investment Portfolio Responsible Person.

5. The Filers and each of the Funds are not in default of securities legislation in any of the Jurisdictions.

6. Each NI 81-102 Fund and Closed-End Fund has, or will have, an independent review committee (an IRC) in accordance with the requirements of NI 81-107. Each Inter-Fund Trade between an NI 81-102 Fund or a Closed-End Fund and with another Fund or a Managed Account will be referred to the relevant IRC of the NI 81-102 Fund or Closed-End Fund under Section 5.2(1) of NI 81-107.

7. Though the Pooled Funds are not subject to the requirements of NI 81-107, each Pooled Fund has, or will have, an IRC at the time the Pooled Fund engages in an Inter-Fund Trade. The IRC of the Pooled Funds is, or will be, comprised in accordance with Section 3.7 of NI 81-107 and is, or will be, expected to comply with the standard of care set out in Section 3.9 of NI 81-107.

8. The mandate of the IRC of each Pooled Fund will include approving Inter-Fund Trades to which the Pooled Fund is a party. The IRC of a Pooled Fund will not approve an Inter-Fund Trade to which the Pooled Fund is a party unless the IRC has made the determination in the same manner as set out in Section 5.2(2) of NI 81-107.

9. The investment management agreement or other documentation in respect of each Managed Account will contain the authorization from the client for the Investment Portfolio Manager of the Managed Account to make Inter-Fund Trades with Funds.

10. The Filer has determined that it would be in the best interests of the Funds and Managed Accounts to receive the Exemption Sought for the following reasons:

(a) making the Funds and the Managed Accounts subject to the same set of rules governing the execution of Inter-Fund Trades will result in cost and timing efficiencies in respect of the execution of transactions for the Funds and the Managed Accounts; and

(b) making the Funds and the Managed Accounts subject to the same set of rules governing the execution of Inter-Fund Trades will result in less complicated and more reliable compliance procedures, as well as more simplified and efficient monitoring thereof, for the Investment Portfolio Managers in connection with the execution of transactions on behalf of the Funds and the Managed Accounts.

11. The Investment Portfolio Managers of the NI 81-102 Funds and the Closed-End Funds cannot rely upon the exemption from Section 13.5(2)(b) of NI 31-103 codified in Section 6.1(4) of NI 81-107 because such codified relief is available to the NI 81-102 Funds and the Closed-End Funds only if, among other conditions, the trade involves two investment funds to which NI 81-107 applies (which is not the case when a Pooled Fund or a Managed Account is the other party to the transaction).

12. The Investment Portfolio Managers of the Pooled Funds and the Managed Accounts cannot rely upon the exemption from Section 13.5(2)(b) of NI 31-103 codified in Section 6.1(4) of NI 81-107 because such codified relief is not available to the Pooled Funds and the Managed Accounts.

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 provided that:

(a) the IRC of each Fund that is a party to the Inter-Fund Trade has approved the Inter-Fund Trade in respect of such Fund in accordance with the terms of Section 5.2(2) of NI 81-107;

(b) if a Managed Account is a party to the Inter-Fund Trade, the investment management agreement or other documentation in respect of the Managed Account authorizes the transaction; and

(c) the Inter-Fund Trade complies with paragraphs (c) to (g) of subsection 6.1(2) of NI 81-107.