Sentry Investments Inc. and Sentry Select Investments Inc.

Headnote

Under paragraph 4.1(1)(b) of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations a registered firm must not permit an individual to act as a dealing, advising or associate advising representative of the registered firm if the individual is registered as a dealing, advising or associate advising representative of another registered firm. The Filers are affiliated entities and as a result of the ability to dually register individuals of affiliated entities prior to July 11, 2011, the Filers structured their business so that the same team advises and distributes investment funds with similar mandates managed by each Filer. The Filers have policies in place to handle potential conflicts of interest. The Filers are exempted from the prohibition for all current and future representatives.

Applicable Legislative Provisions

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

National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations, ss. 4.1, 15.1.

February 29, 2012

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

SENTRY INVESTMENTS INC.

(SII)

AND

SENTRY SELECT INVESTMENTS INC.

(SSII, and together with SII, the Filers)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filers for a decision under the securities legislation of the Jurisdiction (the Legislation) for relief from paragraph 4.1(1)(b) of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103) to permit individuals who are dealing, advising and/or associate advising representatives of one of the Filers to also be dealing, advising and/or associate advising representatives of the other Filer (the Relief Sought):

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

(a) the Ontario Securities Commission (the OSC) is the principal regulator for this application; and

(b) the Filers have provided notice that section 4.7(1) of Multilateral Instrument 11-102Passport System (MI 11-102) is intended to be relied on in each of the other provinces of Canada (with Ontario, the Jurisdictions).

Interpretation

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

Representations

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

1. SSII is registered as an exempt market dealer with the securities regulatory authorities of all provinces of Canada. SSII is also registered as an investment fund manager and portfolio manager with the OSC. The head office of SSII is in Toronto, Ontario.

2. SII is registered as a mutual fund dealer with the securities regulatory authorities of all provinces of Canada. SII is also registered as an investment fund manager, portfolio manager and commodity trading manager with the OSC and as a portfolio manager with the Alberta Securities Commission. The head office of SII is in Toronto, Ontario.

3. The Filers are not, to the best of their knowledge, in default of any requirement of securities legislation in any of the Jurisdictions.

4. SSII and SII are wholly-owned subsidiaries of the same ultimate parent company and are thus affiliates of one another.

5. Each of the Filers carries on business under the registered trade name "Sentry Investments". It is on this basis that clients deal with each of the Filers.

6. The operations of both SSII and SII are co-located and the Filers share a significant level of common facilities and back office functions. Since there are already a number of existing dually registered individuals, the business has been structured around this model to maximize efficiency while maintaining adequate control over potential conflicts of interests.

7. SSII is the investment fund manager, portfolio manager and distributor of non-prospectus qualified Canadian-domiciled investment funds that are sold primarily to high net worth and institutional clients in Canada (the SSII Funds).

8. SII is the investment fund manager, portfolio manager and distributor of prospectus-qualified mutual funds, non-redeemable investment funds and flow-through limited partnerships that are sold primarily to retail investors in Canada (the SII Funds). SII also engages in limited ancillary distribution activities in connection with the SII Funds pursuant to the conditions set out in the decision from the OSC exempting SII from the requirement to become a member of the Mutual Fund Dealers Association of Canada, which decision was subsequently passported to the remaining provinces of Canada.

9. It is proposed that the Representatives be able to provide portfolio management and/or distribution services in respect of both the SSII Funds and the SII Funds.

10. There are currently individuals who are dually registered as advising, associate advising and/or dealing representatives of both SSII and SII, each of whom obtained dual registration before paragraph 4.1(1)(b) of NI 31-103 came into force. As a result of the ability to dually register individuals of affiliated entities prior to July 11, 2011, the Filers structured their business so that the same team advises and distributes investment funds with similar mandates managed by each Filer. Both of the Filers also have the same registered Ultimate Designated Person and Chief Compliance Officer. The Filers now seek to ensure that their operational structure remains aligned with their business model while effectively meeting the policy objectives of NI 31-103.

11. The Representatives will be subject to supervision by, and the applicable compliance requirements of, both Filers. Existing compliance and supervisory structures will apply depending on which regulatory entity the client assets are held with.

12. As the Representatives will be dealing with different client bases in their dual roles with SII and SSII, there is minimal potential for conflicts of interest. Moreover, because the Filers are wholly-owned subsidiaries of the same ultimate parent company, the dual registration of the Representatives will not give rise to the conflicts of interest present in a similar arrangement involving unrelated, arms' length firms.

13. The dual registration of the Representatives will not create significant additional work for the Representatives and the Representatives will continue to have sufficient time to adequately serve both Filers.

14. If these duties and business lines were being carried out under the umbrella of a single registrant (as is very common), each Representative's "multiple" roles (i.e. of a portfolio manager and/or distributor of both prospectus-qualified investment funds and non-prospectus-qualified investment funds) would not be an issue.

15. The Filers are subject to Part 13 of NI 31-103 concerning conflicts of interest.

16. The Filers have in place policies and procedures to address any potential conflicts of interest that may arise in their business, and believe that they will be able to appropriately deal with these conflicts.

17. In the absence of the Requested Relief, the Filers would be prohibited under the Dual Registration Restriction from permitting a Representative to act as an advising, associate advising and/or dealing representative of SII while the individual is an advising, associate advising and/or dealing representative of SSII, even though SII and SSII are affiliates.

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 Relief Sought is granted.