Goodman & Company, Investment Counsel Ltd.

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Relief granted from section 4.1(2) of NI 81-102, following the acquisition of the manager by another organization, to permit mutual funds to purchase securities of related entities in the primary and secondary markets.

Rules Cited

National Instrument 81-102 Mutual Funds, ss. 4.1(2), 19.1.

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

April 5, 2011

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

GOODMAN & COMPANY,

INVESTMENT COUNSEL LTD.

(the "Filer")

AND

IN THE MATTER OF

THE MUTUAL FUNDS LISTED IN SCHEDULE A

AND ANY MUTUAL FUNDS SUBJECT TO

NATIONAL INSTRUMENT 81-102 MUTUAL FUNDS

(NI 81-102) THAT MAY BE ESTABLISHED

IN THE FUTUREFOR WHICH THE FILER ACTS

AS MANAGER AND/OR ADVISOR

(the "Filer Funds")

DECISION

Background

The principal regulator in the Jurisdiction received an application (the Application) from the Filer on behalf of each Filer Fund under section 19.1 of NI 81-102 for a decision under the securities legislation of the Jurisdiction of the principal regulator (Legislation) providing relief from the requirement in Section 4.1(2) of NI 81-102 (the Requested Section 4.1(2) Relief) which prevents a dealer managed mutual fund from investing in a class of securities of an issuer (a Related Person) of which a partner, director, officer or employee of the dealer manager of the mutual fund, or a partner, director, officer or employee of an affiliate or associate of the dealer manager, is a partner, director or officer unless the partner, director, officer or employee

1. does not participate in the formulation of investment decisions made on behalf of the dealer managed mutual fund;

2. does not have access before implementation to information concerning investment decisions made on behalf of the dealer managed mutual fund; and

3. does not influence, other than through research, statistical and other reports generally available to clients, the investment decisions made on behalf of the dealer managed mutual fund.

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

(a) the Ontario Securities Commission (OSC) is the 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 also intended to be relied upon in British Columbia, Alberta, Manitoba, Saskatchewan, Quebec, New Brunswick and Nova Scotia (Passport Jurisdictions).

Interpretation

Terms defined in MI 11-102 and National Instrument 14-101 -- Definitions, NI 81-102 and National Instrument 81-107 -- Independent Review Committee for Investment Funds (NI 81-107) and National Instrument 31-103 -- Registration Requirements and Exemptions (NI 31-103) have the same meaning if used in this decision, unless otherwise defined.

Representations

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

The Filer

1. The Filer is a corporation existing under the laws of the Province of Ontario, is registered with the OSC as a portfolio manager in the category of adviser, is further registered in that category in each of British Columbia, Alberta, Manitoba, Saskatchewan, Quebec, New Brunswick and Nova Scotia and is registered as a commodity trading manager with the OSC.

2. The Filer also is 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 the Legislation.

3. The Filer is, or will be, the manager and/or portfolio adviser to the Funds.

The Filer Funds

1. Each of the Filer Funds is or will be a mutual fund established under the laws of Ontario or one of the other Jurisdictions.

2. On February 2, 2011, The Bank of Nova Scotia (Scotiabank) completed the acquisition of DundeeWealth Inc. (DundeeWealth), the indirect parent company of the Filer (DundeeWealth Transaction).

3. The securities of each of the Filer Funds are, or will be, qualified for distribution pursuant to simplified prospectuses and annual information forms that have been, or will be, prepared and filed in accordance with the securities legislation of each of the Jurisdiction and the Passport Jurisdictions.

4. Each of the Filer Funds is, or will be, a reporting issuer in one or more of the Jurisdiction and the Passport Jurisdictions.

5. The investment strategies of each of the Filer Funds permit, or will permit, it to invest in the securities purchased.

6. The Filer and the Filer Funds are or will be compliant with the requirements of NI 81-107. Accordingly, each Filer Fund has or will have an independent review committee (IRC) established in accordance with NI 81-107.

7. Section 6.2 of NI 81-107 provides an exemption from the mutual fund conflict of interest investment restrictions for purchases of Related Person securities if the purchase is made on an exchange. It does not provide an exemption from section 4.1(2) of NI 81-102 for purchases of non-exchange traded securities.

8. Related Persons of the Filer are issuers of both exchange-traded and non-exchange-traded securities.

9. Non-exchange-traded securities that are debt securities issued by Related Persons, in addition to securities that are listed and traded on an exchange, may be appropriate investments for the Filer Funds.

10. In respect of Filer Funds, directors, officers and employees of the Filer or of an affiliate or associate of the Filer may be directors, officers or employees of a Related Person who do not meet the exceptions in section 4.1(2) of NI 81-102 such that the Requested Section 4.1(2) Relief is required by the Filer to permit the Filer Funds to invest in securities of a Related Person.

11. The Filer is seeking the Requested Section 4.1(2) Relief to permit the Filer Funds to purchase and hold non-exchange traded securities that are debt securities, other than asset backed commercial paper securities, with a term to maturity of 365 days or more, issued by a Related Person in a primary distribution or treasury offering (Primary Offering) or in the secondary market.

12. The Filer considers that the Filer Funds should have access to such securities for the following reasons:

(a) There is currently and has been for several years a very limited supply of highly rated corporate debt.

(b) Diversification is reduced to the extent that a Filer Fund is limited with respect to investment opportunities.

(c) To the extent that a Filer Fund is trying to track or outperform a benchmark it is important for the Filer Fund to be able to purchase any securities included in the benchmark. Debt securities of Related Persons of the Filer are included in most of the Canadian debt indices.

13. Each non-exchange-traded security purchased by a Filer Fund pursuant to the Requested Section 4.1(2) Relief will be a debt security issued by a Related Person that has been given, and continues to have at the time of purchase, an "approved credit rating" by an approved credit rating organization.

14. If a Filer Fund's purchase of non-exchange-traded securities issued by Related Persons involves an inter-fund trade with another fund to which NI 81-107 applies, the provisions of section 6.1.(2) of NI 81-107 will apply to such transaction.

15. The Filer and the Filer Funds are not in default of securities legislation in any jurisdiction, except to the extent that the Filer Funds continued to hold securities of Scotiabank and CI Financial as of the completion of the DundeeWealth Transaction.

16. The Filer has determined that it would be in the best interests of the Filer Funds to receive the Requested Section 4.1(2) Relief.

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 is that the Requested Section 4.1(2) Relief is granted to permit purchases of Related Person securities on the conditions that:

1. the purchase is consistent with, or is necessary to meet, the investment objective of the Filer Fund;

2. the IRC of the Filer Fund has approved the transaction in accordance with Section 5.2(2) of NI 81-107;

3. the manager of the Filer Fund complies with section 5.1 of NI 81-107 and the manager and the IRC of the Filer Fund comply with section 5.4 of NI 81-107 for any standing instructions the IRC provides in connection with the transactions;

4. if the purchases are made in the secondary market:

(a) if the security is an exchange-traded security, the purchase is made on an exchange on which the securities of the issuer are listed and traded;

(b) if the security is not an exchange-traded security,

(i) the price payable for the security is not more than the ask price of the security;

(ii) the ask price of the security is determined as follows:

(1) if the purchase occurs on a marketplace, the price payable is determined in accordance with the requirements of that marketplace; or

(2) if the purchase does not occur on a marketplace,

(A) the Filer Fund may pay the price for the security at which an independent, arm's length seller is willing to sell the security, or

(B) if the Filer Fund does not purchase the security from an independent, arm's length seller, the Fund must obtain, immediately before the purchase, at least one quote from an independent, arm's length purchaser or seller and not pay more than that quote;

5. if the purchases are made in a Primary Offering:

(a) the size of the Primary Offering is at least $100 million;

(b) at least two (2) purchasers who are independent, arm's-length purchasers, which may include "independent underwriters" within the meaning of National Instrument 33-105 -- Underwriting Conflicts, collectively purchase at least 20% of the Primary Offering;

(c) no Filer Fund shall participate in the Primary Offering if following its purchase the Filer Fund would have more than 5% of its net assets invested in non-exchange traded debt securities of the Related Person;

(d) no Filer Fund shall participate in the Primary Offering if following its purchase the Filer Fund together with related Filer Funds will hold more than 20% of the securities issued in the Primary Offering;

(e) the price paid for the securities by a Filer Fund in the Primary Offering shall be no higher than the lowest price paid by any of the arm's length purchasers who participate in the Primary Offering;

6. the transaction complies with any applicable "market integrity requirements" as defined in NI 81-107;

7. no later than the time the Filer Fund files its annual financial statements, the Filer files with the securities regulatory authority or regulator the particulars of any such investments; and

8. the reporting obligation in section 4.5 of NI 81-107 applies to the Requested Section 4.1(2) Relief granted in this decision and the IRC of the Filer Fund complies with section 4.5 of NI 81-107 in connection with any instance that it becomes aware that the Filer did not comply with any of the conditions of this decision.

Schedule A