Goodman & Company, Investment Counsel Ltd.

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Relief granted from section 12.1 of National Instrument 31-103 Registration Requirements and Exemptions -- Registrant exempted from including full amount of guarantee on Line 11 of Form 31-103F1 Calculation of Excess Working Capital -- Registrant guaranteed debt of parent company prior to the implementation of NI 31-103 -- Among the conditions and restrictions on the exemption are requirements that an alternate amount be included on Line 11 of Form 31-103F1, the registrant continues to be the wholly-owned subsidiary of the debtor, and client assets are custodied with a third party custodian.

Applicable Legislative Provisions

Multilateral Instrument 11-102 Passport System, s. 4.7.

National Instrument 31-103 Registration Requirements and Exemptions, ss. 12.1, 15.1, 16.11.

March 14, 2011

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO

(the "Principal Jurisdiction")

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

GOODMAN & COMPANY, INVESTMENT COUNSEL LTD.

(the "Filer")

DECISION

Background

The Principal Regulator (as defined below) in the Principal Jurisdiction has received an application from the Filer for a decision under Subsection 15.1 of National Instrument 31-103 Registration Requirements and Exemptions ("NI 31-103") for relief from the requirement in section 12.1 of NI 31-103 that the Filer calculate its excess working capital using Form 31-103F1 (the "Form") only to the extent that the Filer not be required to comply fully with Line 11 of the Form when calculating its excess working capital (the "Exemption Sought").

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):

(a) the Ontario Securities Commission is the principal regulator (the "OSC" or "Principal Regulator") for this application, and

(b) the Filer has provided notice that Section 4.7(1) of Multilateral Instrument 11-102 Passport System ("MI 11-102") is intended to be relied upon in all other provinces and territories of Canada (collectively, the "Jurisdictions").

Interpretation

Defined terms contained in National Instrument 31-103 -- Registration Requirements and Exemptions and MI 11-102 have the same meanings in this decision ("Decision") unless they are otherwise defined in this Decision.

Representations

This Decision is based on the following facts represented by the Filer:

1. The Filer is a corporation established under the laws of Ontario with its head office located in Toronto, Ontario.

2. The Filer is registered with the OSC as an adviser in the category of portfolio manager, and is further registered in that category in each of British Columbia, Alberta, Manitoba, Quebec, New Brunswick and Nova Scotia.

3. The Filer also acts as an investment fund manager within the meaning of NI 31-103 and has applied to the OSC for registration in that capacity as required by subsection 25(4) of the Securities Act (Ontario) (the "Act").

4. The Filer is not a reporting issuer in any jurisdiction of Canada and is not, to its knowledge, in default of securities regulation in any jurisdiction of Canada.

5. The Filer is a leading Canadian asset management company, and offers a wide range of wealth management solutions. The Filer's assets under management at January 31, 2011 were approximately $39.4 billion.

6. The Filer is an indirect wholly-owned subsidiary of DundeeWealth Inc. ("DundeeWealth"). DundeeWealth's total revenue earning fiduciary assets at January 31, 2011 were approximately $79.5 billion.

7. On February 1, 2011, the Bank of Nova Scotia ("Scotiabank") acquired all of the outstanding common shares and First Preference, Series X shares not already owned by it of DundeeWealth, resulting in it owning approximately 97% of the outstanding common shares and all of the First Preference Series X shares of DundeeWealth, and consequently resulting in each of DundeeWealth and the Filer becoming an affiliate of Scotiabank.

8. DundeeWealth and the Filer have common management and the Board of Directors of the Filer is comprised of members of the DundeeWealth senior executive team. There is a commonality of purpose between the two organizations and management has a fiduciary responsibility to ensure that both entities are operated in the best interests of all stakeholders.

9. DundeeWealth does not have any corporate debt other than (i) a $100 million revolving credit facility with Scotiabank, of which $3 million was drawn and outstanding on February 17, 2011; and (ii) a $200 million principal amount of Series 1 Notes which were issued on September 25, 2009 and mature on September 25, 2014 (the "Notes"). The Notes bear interest at 5.10% per annum, payable semi-annually on March 25th and September 25th of each year.

10. The Notes are unsecured obligations of DundeeWealth and rank equally with all other unsecured and unsubordinated indebtedness and obligations of DundeeWealth.

11. Certain subsidiaries of DundeeWealth, including the Filer, have fully and unconditionally guaranteed (the "Guarantee") on a joint and several basis the payment of principal and interest on the Notes. The Filer guaranteed the Notes at the request of DundeeWealth in order to obtain the most advantageous financial terms. The Guarantee was not provided in response to a suggestion that DundeeWealth's primary obligation required any support.

12. The Notes are subject to certain covenants including a negative pledge on security interests of DundeeWealth's assets, and restrictions on additional indebtedness or the sale of assets, subject to certain conditions.

13. DundeeWealth may, at its option, redeem the Notes at a redemption price which is at the greater of par and the Government of Canada Yield plus 0.62%.

14. In the event that a change of control of DundeeWealth occurs (as that term is defined in the trust indenture creating the debentures) and the rating of the debentures is lowered to below investment grade, defined as below BBB- by Standard and Poors and BBB (low) by DBRS Limited, DundeeWealth will be required to make an offer to repurchase all or, at the option of each holder, any part of each holder's Notes at a purchase price payable in cash equivalent to 101% of the outstanding principal amount of the Notes together with accrued and unpaid interest to the date of purchase.

15. Under section 12.1 of NI 31-103, as of September 28, 2010, the Filer is required to maintain minimum capital of $100,000 plus a financial institution bond of $500,000. The Filer is also required to calculate its excess working capital in accordance with the Form.

16. The Filer currently calculates its excess working capital in accordance with the Decision. Without the Decision, the Filer is required as one of the guarantors to deduct the entire amount of the Notes (Line 11) from its adjusted working capital (Line 7). As a result, the Filer is required to maintain additional capital of approximately $200 million, which is not commercially practical. It is also not commercially practical for the Filer to cease to be a guarantor of the Notes.

17. DundeeWealth, a subsidiary of Scotiabank, is a well-capitalized public company, with the Notes being favourably rated by rating agencies. DundeeWealth is not, and has never been, in breach of any of its financial covenants.

18. DundeeWealth is confident that even in the event that financial markets were to suffer a significant downturn, the Filer, when combined with DundeeWealth's other operations, will generate sufficient cash to service the Notes and repay them as they come due. In any event, DundeeWealth expects that, if it were necessary to restructure the Notes, it could complete any necessary restructuring within a 3 month period.

19. Approximately 98% of the assets of the Filer's clients are held by unrelated third-party custodians, approximately 2% of the assets of the Filer's clients are held by related third-party custodians which are governed by Investment Industry Regulatory Organization of Canada ("IIROC"), and no client assets are co-mingled with those of the Filer.

20. If the Filer were called upon to pay under the Guarantee, none of the Filer's clients would be affected adversely in that they would not be in any danger of losing any of their assets or investments.

21. The Filer will continue to provide the OSC with information about the Filer as a going concern and also about any potential problems, and the Filer will be adequately capitalized to carry on its business.

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 so long as:

(a) when calculating its excess working capital in accordance with Form 31-103F1, the Filer will deduct on Line 11 the greater of:

(i) the contingent liabilities that it would be required to record in its financial statements in respect of the Guarantee in accordance with Canadian GAAP and/or International Financial Reporting Standards, and

(ii) the interest amount payable on the Notes during the next calendar quarter immediately following any calculation of excess working capital;

(b) as a supplement to the Filer satisfying its financial reporting obligations in Part 12, Division 4, of NI 31-103, the Filer will also provide to the Principal Regulator, on a confidential and quarterly basis for so long as the Notes remain outstanding: (i) a copy of the Filer's unaudited financial statements; (ii) a copy of DundeeWealth's unaudited financial statements by no later than the 45th day after the end of the interim period; (iii) the Filer's unaudited excess working capital calculation in Form 31-103F1 showing excess working capital greater than zero following a deduction of the amount specified by paragraph (a) above; and (iv) a written certification that the Filer is not aware of any circumstance which may result in the accelerated payments of Notes by DundeeWealth as a result of a default under the terms of the Notes, or any payment by the Filer under the Guarantee.

(c) the Filer will promptly notify the Principal Regulator if it becomes aware that the accelerated payment of the Notes by DundeeWealth as a result of a default under the terms of the Notes may or will occur;

(d) the Filer continues to be a wholly-owned indirect subsidiary of DundeeWealth; and

(e) the Filer does not hold any client assets;

provided that this decision will have no further force and effect after March 25, 2015.