Mackenzie Financial Corporation and Mackenzie Universal Canadian Shield Fund

Decision

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Relief granted to permit a closed-end fund converting into a mutual fund to show pre-conversion past performance in sales communications -- the closed-end fund has complied with the investment restrictions of NI 81-102 except with respect to short selling and a temporary non-material investment in ETFs -- the Fund currently has relief to short sell securities.

Applicable Legislative Provisions

National Instrument 81-102 Mutual Funds, ss. 15.6(a), 15.6(d), 19.1.

January 20, 2012

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO

(THE "JURISDICTION")

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATION IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

MACKENZIE FINANCIAL CORPORATION

("MACKENZIE" or the "FILER")

AND

MACKENZIE UNIVERSAL CANADIAN SHIELD FUND

(THE "FUND")

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction of the principal regulator (the "Legislation") granting an exemption relieving the Fund from the prohibitions in subsections 15.6(a) and (d) of National Instrument 81-102 Mutual Funds ("NI 81-102") to permit the Fund to show its historic performance data in sales communications notwithstanding that it has not, as a mutual fund, distributed its securities under a simplified prospectus for 12 consecutive months and to permit sales communications relating to the Fund to contain performance data of the Fund for the period prior to the Fund offering its securities under a simplified prospectus (the "Requested Relief").

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

(a) the Ontario Securities Commission 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 intended to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick, Nova Scotia, Newfoundland and Labrador, Prince Edward Island, Northwest Territories, Nunavut and Yukon (collectively, the "Other Jurisdictions").

Interpretation

Terms defined in National Instrument 14-101Definitions, and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.

"Conversion" means the conversion of the Fund from a closed-end investment fund to a mutual fund on July 8, 2011.

Representations

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

1. Mackenzie is a corporation governed by the laws of Ontario and is registered as a Portfolio Manager and Exempt Market Dealer in each Canadian jurisdiction and has applied for registration in Ontario as an investment fund manager. Mackenzie is also registered in Ontario under the Commodity Futures Act (Ontario) in the category of Commodity Trading Manager. Mackenzie's head office is located in Toronto, Ontario.

2. Mackenzie acts as manager and trustee of the Fund.

3. The Fund was formerly called The Canadian Shield Fund.

4. The Fund was established as a closed-end investment fund under the laws of Ontario pursuant to a declaration of trust dated October 29, 2009, as amended (the "Declaration of Trust").

5. The Fund is a reporting issuer under the securities legislation of each of the provinces and territories of Canada.

6. Prior to Conversion, units of the Fund were distributed pursuant to an initial public offering under a long form prospectus dated October 29, 2009 (the "Long Form Prospectus") and were listed and traded on the Toronto Stock Exchange (the "TSX").

7. As of the date of the Conversion (the "Conversion Date"), there were 14,523,389 units of the Fund outstanding with a net asset value ("NAV") per unit of $10.1745, for an aggregate NAV of the Fund of $147,768,221.38.

8. Since its inception, the Fund has complied with the investment restrictions contained in NI 81-102, other than with regard to short selling, as described in the Long Form Prospectus, and in respect of a temporary inadvertent investment in securities issued by exchange traded funds that did not have a material impact on the Fund's performance.

9. Neither Mackenzie nor the Fund is in default of securities legislation in any province or territory of Canada.

10. The Declaration of Trust and the Long Form Prospectus provided that, on or about the Conversion Date, units of the Fund would be delisted, the Fund would become an open-end mutual fund and the units would become redeemable at their NAV per unit on a daily basis.

11. A press release announcing the details of the Conversion was issued on April 21, 2011.

12. On the Conversion Date,

(i) the Fund converted to an open-ended mutual fund;

(ii) units of the Fund were delisted from the TSX;

(iii) all outstanding units of the Fund were renamed Series B units;

(iv) the Fund was renamed Mackenzie Universal Canadian Shield Fund; and

(v) the annual management fee for the Series B units was increased from 1.90% to 2.25%, by reducing the portion of the management fee retained by Mackenzie from 1.50% per annum to 1.35% per annum, and increasing the amount of the servicing fee payable out of the management fee from 0.40% per annum to 0.90% per annum.

13. A press release confirming the Conversion was completed as of the close of business on the Conversion Date was issued on July 11, 2011 and was filed, along with the related material change report, on SEDAR on July 14, 2011.

14. Mackenzie filed a preliminary simplified prospectus and annual information form on March 18, 2011 on SEDAR to qualify Series A units of the Fund under National Instrument 81-101 Mutual Fund Prospectus Disclosure in Ontario and each of the Other Jurisdictions. A receipt was issued for the final simplified prospectus and the annual information form dated June 10, 2011 on June 13, 2011.

15. Following the Conversion, the investment practices of the Fund will continue to comply in all respects with the requirements of Part 2 of NI 81-102, except to the extent that the Fund has received permission from the Canadian securities regulatory authorities to deviate therefrom.

16. The Fund is being managed substantially similarly post-Conversion as it was pre-Conversion. Any changes between the Fund pre- and post-Conversion that could have a material effect on the performance of the Fund will be disclosed in sales communications pertaining to the Fund.

17. Without the Requested Relief:

(i) sales communications pertaining to the Fund will not be permitted to include performance data until July 9, 2012, being the date when the Fund will have distributed securities, as a mutual fund, under a simplified prospectus in a jurisdiction for 12 consecutive months; and

(ii) sales communications pertaining to the Fund will only be permitted to include performance data for the period commending after July 9, 2011, being the date on which the Fund commenced distributing securities, as a mutual fund, under a simplified prospectus.

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 Requested Relief is granted.

"Sonny Randhawa"
Manager, Investment Funds Branch
Ontario Securities Commission