Mackenzie Financial Corporation et al.

Headnote

NP 11-203 -- Process for Exemptive Relief Applications in Multiple Jurisdictions -- Approval of mutual fund reorganizations pursuant to section 5.5(1)(b) of NI 81-102 required because the reorganizations do not meet criteria for pre-approval -- the reorganizations do not meet the requirements in sections 5.6(1)(f)(ii) and (iii) of NI 81-102 because the continuing funds will be new funds and do not have a simplified prospectus or fund facts documents -- Exemption from seed capital requirements from section 3.1 of NI 81-102.

Upon reorganization, portfolio assets of terminating funds to continue as portfolio assets referable to the continuing funds -- Reorganization will take two existing classes (hedged and unhedged) and put each existing class into a separate fund going forward, one hedged and one unhedged -- Continuing funds to have same investment objectives, investment strategies, management fees, portfolio investment manager, and, at effective date of mergers, same portfolio assets as the terminating funds -- Financial data of terminating funds is significant information that can assist investors in making decision to purchase or hold shares of continuing funds.

Exemption from requirement in section 2.1 of NI 81-101 and Item 5(b) of Form 81-101F1, Item 2 of Form 81-101F3, to permit terminating funds to preserve their respective start dates once continued as new classes of a mutual fund corporation further to mergers -- Exemption from Item 4 of Form 81-101F3 to permit continuing funds to use information of terminating Funds for the average return and year-by-year return in the fund facts -- Exemption from sections 15.3(2), 15.6(a)(i), 15.6(b), 15.6(d), 15.8(2)(a), 15.8(3)(a) and 15.9(2)(d) of NI 81-102 to permit the continuing funds to use the performance data of the terminating funds in sales communications and reports to securityholders -- Exemption from section 4.4 of NI 81-106 and Items 3.1(1), 3.1(7), 3.1(8), 4.1(1), 4.1(2), 4.2(1), 4.2(2) and 4.3(1)(a) of Part B of Form 81-106F1 and Items 3(1) and 4 of Part C of Form 81-106F1 to permit the continuing funds to include in their annual and interim management reports of fund performance the financial highlights and past performance of the terminating funds.

Applicable Legislative Provisions

National Instrument 81-101 Mutual Fund Prospectus Disclosure, s. 6.1.

National Instrument 81-102 Mutual Funds, s. 19.1.

National Instrument 81-106 Investment Fund Continuous Disclosure, s. 17.1.

July 17, 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

MACKENZIE FINANCIAL CORPORATION

(the Filer)

AND

IN THE MATTER OF

MACKENZIE IVY FOREIGN EQUITY CLASS

(HEDGED CLASS AND UNHEDGED CLASS),

MACKENZIE UNIVERSAL AMERICAN GROWTH CLASS

(HEDGED CLASS AND UNHEDGED CLASS),

MACKENZIE IVY FOREIGN EQUITY CLASS,

MACKENZIE IVY FOREIGN CURRENCY NEUTRAL CLASS,

MACKENZIE UNIVERSAL AMERICAN GROWTH CLASS AND

MACKENZIE UNIVERSAL AMERICAN GROWTH CURRENCY NEUTRAL CLASS

(the Funds)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filer on behalf of the Funds for a decision under the securities legislation of the Jurisdiction (the Legislation):

(a) approving the proposed reorganizations (Reorganization Approval) of the Terminating Funds (as defined below) into the Continuing Funds (as defined below) pursuant to subsection 5.5(1)(b) of National Instrument 81-102 -- Mutual Funds (NI 81-102); and

(b) exempting the Filer from section 3.1 of NI 81-102 (the Seed Capital Relief) to permit the filing of a simplified prospectus for each Continuing Fund notwithstanding that the investment required under section 3.1 of NI 81-102 will not be provided, and

(c) exempting the Filer from:

i) section 2.1 of National Instrument 81-101 Mutual Funds (NI 81-101) for the purposes of the exemption sought from Form 81-101F1 -- Contents of Simplified Prospectus (Form 81-101F1) and for the purposes of the exemption sought from Form 81-101F3 -- Contents of Fund Facts Document (Form 81-101F3);

ii) sections 15.3(2), 15.6(a)(i), 15.6(b), 15.6(d), 15.8(2)(a), 15.8(3)(a) and 15.9(2)(d) of NI 81-102 to permit the Continuing Funds to use performance data of the Terminating Funds in sales communications and reports to securityholders (collectively, the Fund Communications);

iii) item 5(b) of Part B of Form 81-101F1 to permit the Continuing Funds to disclose the start dates of the Terminating Funds as their respective start dates in the simplified prospectuses;

iv) section 13.2 of NI 81-101F1 to permit the Continuing Funds to use the information of the Terminating Funds for the purpose of calculating the information required under the heading "Fund Expenses Indirectly Borne by Investors" in the simplified prospectuses;

v) item 2 of Part I of Form 81-101F3 to permit the Continuing Funds to disclose the Date Fund Created dates of the respective Terminating Funds as their Date Fund Created dates in the fund facts documents; and

vi) item 4 of Part 1 of Form 81-101 F3 to permit the Continuing Funds to use performance data of the Terminating Funds in the Average Return and Year-by-Year Returns in the fund facts documents

(collectively, the Past Performance Relief, and together with the Reorganization Approval and Seed Capital Relief, the Exemption Sought).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions:

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

(b) the Filer has provided notice that section 4.7(1)(c) 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.

Interpretation

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

"Capitalcorp" means Mackenzie Financial Capital Corporation, a corporation formed under the Business Corporations Act (Ontario).

"Continuing Funds" means the Continuing Hedged Funds and the Continuing Unhedged Funds.

"Continuing Hedged Funds" means the portfolio of assets owned by Capitalcorp that will be referable to each of Mackenzie Ivy Foreign Equity Currency Neutral Class and Mackenzie Universal American Growth Currency Neutral Class after the Effective Date.

"Continuing Unhedged Funds" means the portfolio of assets owned by Capitalcorp that will be referable to each of Mackenzie Ivy Foreign Equity Class and Mackenzie Universal American Growth Class after the Effective Date.

"Effective Date" means the date of the Proposed Reorganizations, which is expected to be on or about the date that the simplified prospectus of each Continuing Fund is reciepted.

"Fund" or "Funds" means, individually or collectively, the Continuing Funds and the Terminating Funds.

"Hedged Class" means the hedged class of shares of the Terminating Funds.

"Mackenzie" means Mackenzie Financial Corporation, the manager of the Funds.

"Proposed Reorganizations" means the proposed reorganizations pursuant to which shareholders in the Terminating Funds will become shareholders in the corresponding Continuing Funds set out below:

"Terminating Funds" means the portfolio of assets owned by Capitalcorp that is referable to Mackenzie Ivy Foreign Equity Class and Mackenzie Universal American Growth Class prior to the Effective Date.

"Unhedged Class" means the unhedged class of shares of the Terminating Funds.

Representations

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

The Filer and the Funds

1. The Filer is a corporation governed by the laws of Ontario and is registered as portfolio manager and exempt market dealer in all of the provinces and territories of Canada. The Filer is also registered as an investment fund manager in Ontario and registered under the Commodity Futures Act (Ontario) in the category of Commodity Trading Manager.

2. The Filer is the manager and portfolio manager of the Terminating Funds and will be the manager and portfolio manager of the Continuing Funds.

3. The head office of the Filer is located in Toronto, Ontario.

4. The Filer and the Terminating Funds are not in default of securities legislation in any province or territory of Canada.

5. Capitalcorp is a mutual fund corporation incorporated under the laws of Ontario. Each Terminating Fund is referable to two classes of shares of Capitalcorp, namely, the Hedged Class and the Unhedged Class and each Continuing Fund will be referable to a single class of shares of Capitalcorp. Each class of shares is issuable in more than one series.

6. The Terminating Funds are, and the Continuing Funds will be, reporting issuers under the applicable securities legislation of each province and territory of Canada.

7. The Terminating Funds, and the Continuing Funds will, operate in accordance with NI 81-102, except for exemptive relief that has been previously obtained.

8. On September 10, 2007, Mackenzie Ivy Foreign Equity Class was granted relief from section 2.1 of NI 81-102 to invest more than 10 percent of its net assets in debt securities issued by a foreign government or supranational agency. The fund does not rely on this relief, and therefore, does not currently intend on seeking the same relief for the two corresponding Continuing Funds, Mackenzie Ivy Foreign Equity Class and Mackenzie Ivy Foreign Equity Currency Neutral Class.

9. The Terminating Funds are currently qualified for sale in each of the provinces and territories of Canada pursuant to the following simplified prospectuses, fund facts, and annual information forms:

(a) for both Mackenzie Ivy Foreign Equity Class (hedged class and unhedged class) and Mackenzie Universal American Growth Class (hedged class and unhedged class), a simplified prospectus, fund facts, and annual information form for the Mackenzie Funds dated September 30, 2011 (as amended) (the Mackenzie prospectus);

(b) for Mackenzie Universal American Growth Class (unhedged class), a simplified prospectus, fund facts, and annual information form for the Quadrus Group of Funds dated June 30, 2011 (as amended) (the Quadrus prospectus);

(c) for Mackenzie Universal American Growth Class (unhedged class), a simplified prospectus, fund facts, and annual information form for the Laurentian Bank Group of Funds dated December 30, 2011 (the LB prospectus);

(collectively, the Prospectuses).

10. The Continuing Funds will be new funds. The Filer intends to file concurrently, preliminary simplified prospectuses, fund facts, and annual information forms for each of the Continuing Funds, which will be part of the annual renewal for the Mackenzie Prospectus, and a standalone simplified prospectus, fund facts, and annual information form for the Quadrus prospectus and the LB prospectus in respect of Mackenzie Universal American Growth Class, on or about August 28, 2012. The simplified prospectuses for the Continuing Funds will be filed on or about September 28, 2012.

11. The net asset value for each series of securities of the Terminating Funds is, and the net asset value for each series of securities of the Continuing Funds will be, calculated on a daily basis on each day the Toronto Stock Exchange is open for trading.

12. Information regarding series offered, net assets as at May 31, 2012, and start dates for the Funds are as follows:

Terminating Fund	Date first offered for sale	Net assets	Series offered by Terminating Funds and to be offered by Continuing Funds
Mackenzie Ivy Foreign Equity Class (unhedged class)	October 2000	$195.77 Million	A, E, F, F8, J, O, O6, T6 & T8
Mackenzie Ivy Foreign Equity Class (hedged class)	August 2007	$130.46 million	A, E, F, J, O,T6 & T8
Mackenzie Universal American Growth Class (unhedged class)	November 2002	$233.49 million	A, E, F, I, J, O, T6, T8,Quadrus Series, H, L, N & LB
Mackenzie Universal American Growth Class (hedged class)	February 2006	$89.46 million	A, E, F, I, J, O,T6 &T8

The Proposed Reorganizations

13. The Filer is proposing to reorganize each Terminating Fund by:

(a) causing the pool of assets comprising each Terminating Fund to be "split" to become two separate pools of assets, with one pool of assets becoming referable solely to the Hedged Class and the other pool of assets becoming referable solely to the Unhedged Class, and

(b) amending Capitalcorp's articles of incorporation such that the Hedged Classes of Mackenzie Ivy Foreign Equity Class and Mackenzie Universal American Growth Class will be renamed "Mackenzie Ivy Foreign Equity Currency Neutral Class" and "Mackenzie Universal American Growth Currency Neutral Class", respectively, and the Unhedged Classes of Mackenzie Ivy Foreign Equity Class and Mackenzie Universal American Growth Class will be renamed "Mackenzie Ivy Foreign Equity Class" and "Mackenzie Universal American Growth Class", respectively.

14. The Proposed Reorganizations are not mergers of mutual funds as is commonly understood since the classes of shares referable to the Terminating Funds will not terminate under the Ontario Business Corporations Act but each will continue as a class of shares referable to one of the Continuing Funds after the Effective Date.

15. Upon completion of the Proposed Reorganizations:

(a) shareholders in each of the Continuing Funds will hold the same class of shares of Capitalcorp after the Effective Date as they did before as shareholders of the corresponding Terminating Funds, and therefore:

i. their rights as shareholders of the Continuing Funds will be identical to the rights they had as shareholders of the Terminating Funds; and

ii. the net asset value (NAV) for each share of the Continuing Hedged Fund and Continuing Unhedged Fund will be equal to the NAV per share of the corresponding Hedged Classes and Unhedged Classes; and

(b) the investment objectives, investment strategies, investment portfolio manager, fee structures and valuation procedures applicable to each Continuing Hedged Fund will be identical to those of the corresponding Hedged Class, except that the Continuing Hedged Fund's investment objectives and investment strategies will reflect that the fund will hedge its foreign currency exposure; and

(c) the investment objectives, investment strategies, investment portfolio manager, fee structures and valuation procedures applicable to each Continuing Unhedged Fund will be identical to those of the corresponding Unhedged Class, except that the Continuing Unhedged Fund's investment strategies will reflect that the fund will not hedge its foreign currency exposure.

16. As a result, notwithstanding the reorganization by way of the Proposed Reorganizations, the Continuing Funds will be managed identically to the Terminating Funds.

17. The Proposed Reorganizations will benefit shareholders of the Terminating Funds as follows:

(a) improved hedging: by having two separate mutual funds, with only one using hedging as a fundamental investment strategy, there will be an improved system for administering the hedging activities for the Continuing Funds. This could lead to improved accuracy in hedging and could reduce the potential for administrative errors.

(b) improved clarity: by having two separate mutual funds, there will be improved clarity to shareholders in disclosure documents. Currently, the Terminating Funds' disclosure documents describe information relating to both the Hedged Class and Unhedged Class of each Terminating Fund in one document. If the Proposed Reorganizations are implemented, there will be separate disclosure documents for each Continuing Hedged Fund and the Continuing Unhedged Fund, thereby improving clarity to shareholders.

18. Although shareholders in each of the Continuing Funds will hold the same class of shares of Capitalcorp after the Effective Date as they did before as shareholders of the corresponding Terminating Funds, and they will experience no change in investment objectives or investment strategies (other than as described above), investment portfolio manager, fee structure or valuation procedures, the Proposed Reorganizations will result in the creation of two new mutual funds for each Terminating Fund as contemplated by section 1.3 of NI 81-102. Accordingly, a special meeting (Special Meeting) of shareholders of the Terminating Funds will be held to vote on the Proposed on or about August 27, 2012.

19. On or about August 3, 2012, a management information circular in connection with the Proposed Reorganizations (Management Information Circular) will be filed on SEDAR and will be mailed to shareholders of record of the Terminating Funds as at July 25, 2012. The Management Information Circular will provide sufficient information about the Proposed Reorganizations to permit securityholders to make an informed decision about the Proposed Reorganizations and will include information about the similarities and technical differences between the investment objectives and investment strategies of the Terminating Funds and the Continuing Funds, as well as the fees of the Continuing Funds, and the income tax considerations of the Proposed Reorganizations.

20. The Continuing Funds will be new funds. The Filer intends to file preliminary simplified prospectuses, fund facts, and annual information forms for each of the Continuing Funds, which will be part of the annual renewal for the Mackenzie Prospectus, and a standalone simplified prospectus, fund facts, and annual information form for the Quadrus prospectus and the LB prospectus in respect of Mackenzie Universal American Growth Class, on or about August 28, 2012. The simplified prospectuses for the Continuing Funds will be filed on or about September 28, 2012.

21. Terminating Fund shareholders will continue to have the right to redeem their securities or exchange their securities for securities of any other mutual funds for which they are eligible and which are offered under either the Mackenzie prospectus, Quadrus prospectus or LB prospectus, as applicable, at any time up to the close of business on the Effective Date. Terminating Fund shareholders who switch their securities for securities of other mutual funds for which the Filer is the manager will not incur any charges. Shareholders who redeem securities may be subject to redemption charges.

22. The portfolio and other assets of each Terminating Fund that will become referable to the corresponding Continuing Fund are acceptable to the portfolio advisor of the corresponding Continuing Fund, and are consistent with the investment objectives of the corresponding Continuing Fund. The rights associated with each series of shares referable to the Continuing Funds will be identical to the rights formerly associated with the corresponding series of shares of the Terminating Funds.

23. As required by National Instrument 81-107 Independent Review Committee for Investment Funds, an Independent Review Committee (the IRC) has been appointed for the Terminating Funds. The Filer presented the terms of the Proposed Reorganizations to the IRC for a recommendation. The IRC reviewed the Proposed Reorganizations and recommended that it be put to shareholders of the Terminating Funds for their consideration on the basis that the Proposed Reorganizations would achieve a fair and reasonable result for the Terminating Funds.

24. None of the costs and expenses associated with the Proposed Reorganizations will be borne by the Funds. All such costs will be borne by the Filer. There are no charges payable by shareholders of the Terminating Funds who acquire securities of the corresponding Continuing Funds as a result of the Proposed Reorganizations.

25. Material change reports and amendments to the simplified prospectus and annual information form of each Terminating Fund in respect of the Proposed Reorganizations were filed on SEDAR on July 5, 2012.

26. The Proposed Reorganizations will not involve the disposition by shareholders of securities of the Terminating Funds nor the acquisition of securities of the Continuing Funds. The Proposed Reorganizations will also not involve the disposition or acquisition of portfolio securities by any of the Terminating Funds or the Continuing Funds. Accordingly, there are no tax consequences to the Proposed Reorganizations.

27. If approval of the Proposed Reorganizations by shareholders of the Terminating Funds is obtained at the Special Meeting, subject to having obtained regulatory approval, the Filer wishes to have the Proposed Reorganizations become effective concurrently with the date a receipt is issued for the simplified prospectuses of the Continuing Funds, which is expected to be on or about September 28, 2012.

28. If approval of shareholders of the Terminating Funds is not received, then the Proposed Reorganizations will not proceed. Accordingly, it is unlikely that the Continuing Funds would be launched if the Proposed Reorganizations are not approved because it would be extremely costly for the Filer to file simplified prospectuses, annual information forms, and fund facts for each Continuing Fund, and have to terminate the Continuing Funds forthwith.

Reorganization Approval

29. Reorganization Approval is required because the Proposed Reorganizations do not satisfy all of the criteria for pre-approved reorganizations and transfers set out in section 5.6 of NI 81-102 in the following ways:

(a) contrary to section 5.6(1)(f)(ii) of NI 81-102 (SP Delivery Requirement), the simplified prospectus or the most recently filed fund facts document of the Continuing Funds will not be sent to shareholders of the Terminating Funds in connection with the Proposed Reorganizations; and

(b) contrary to section 5.6(1)(f)(iii) of NI 81-102 (Circular Disclosure Requirement), the management information circular that will be sent to shareholders of the Terminating Funds will not include a statement that shareholders may obtain information about the corresponding Continuing Funds as prescribed by the Circular Disclosure Requirement.

30. Except as noted above, the Proposed Reorganizations will otherwise comply with all of the other criteria for pre-approved reorganizations and transfers set out in section 5.6 of NI 81-102.

31. The Filer wishes to hold the Special Meeting on August 27, 2012. Accordingly, simplified prospectuses and fund facts documents for the Continuing Funds, which are expected to be filed on or about September 28, 2012, will not be available for mailing to shareholders together with the Management Information Circular until on or about August 3, 2012. As a result, the Filer will not be able to comply with the SP Delivery Requirement. However, the Management Information Circular will provide the Terminating Funds' shareholders with key information which would otherwise be provided in the simplified prospectuses and fund facts of the Continuing Funds.

32. As the simplified prospectuses for the Continuing Funds will be filed on or about September 28, 2012, and will be not available by the time the Management Information Circular is mailed, the Filer will not be able to comply with the Circular Disclosure Requirement. However, the current shareholders of the Terminating Funds already have access to the documents referred in Circular Disclosure Requirement including the simplified prospectus, annual information form, most recently filed fund facts document, annual and interim financial statements and most recently filed management reports of fund performance (MRFP) of their respective Terminating Fund.

33. The Filer submits that it would not be prejudicial to the interests of Terminating Funds' shareholders to grant the Reorganization Approval because:

(a) shareholders in each of the Hedged Classes and Unhedged Classes will continue to hold the same class of shares of Capitalcorp after the Effective Date as they did before as shareholders of the corresponding Terminating Funds,

(b) each Continuing Hedged Fund will be managed in the same manner as the corresponding Hedged Class, and will have the same investment portfolio manager, fee structures and valuation procedures,

(c) each Continuing Unhedged Fund will be managed in the same manner as the corresponding Unhedged Class, and will have the same investment portfolio manager, fee structures and valuation procedures, and

(d) the management information circular that is sent to shareholders will provide sufficient information about the Proposed Reorganizations to permit securityholders to make an informed decision about the Proposed Reorganizations including a full description of the Proposed Reorganizations, the income tax considerations of the Proposed Reorganizations, information about the similarities and technical differences between the investment objectives and investment strategies of the Terminating Funds and the Continuing Funds, as well as a summary of the Independent Review Committees' decision with respect to the Proposed Reorganizations.

34. Shareholders in each of the Continuing Funds will hold the same class of shares of Capitalcorp after the Effective Date as they did before, and they will be managed in the same manner as the corresponding Terminating Fund, and will experience no change in investment portfolio manager, fee structure or valuation procedures. Currently, the MRFPs and marketing materials for the Terminating Funds contain separate disclosure for each of the Hedged Classes and Unhedged Classes.

Seed Capital

35. The Filer does not intend to subscribe for $150,000 of shares of each of the Continuing Funds as required by the Seed Capital Requirement because the assets of the Terminating Funds (which will become the assets of the Continuing Funds) are significantly in excess of the $150,000 seed capital requirement. Accordingly, the Filer is of the view that any seed capital injected into the Continuing Funds prior to the Proposed Reorganizations will not provide any additional benefit to securityholders.

36. On the Effective Date, the shareholders of the Continuing Funds will hold the same class of shares of Capitalcorp as they did before as shareholders of the Terminating Funds, and therefore, each Continuing Fund would have already received subscriptions aggregating not less than $500,000 (theFund Seed Capital).

Past Performance

37. The Continuing Funds will be new funds. However, while the Continuing Hedged Funds and the Continuing Unhedged Funds will each have the same assets and liabilities as the corresponding Hedged Classes and Unhedged Classes, as new funds, they will not have their own performance data or information derived from financial statements (collectively, the Financial Data) as at the Effective Date. In order for the Proposed Reorganizations to be as seamless as possible for securityholders in the Terminating Funds and the Continuing Funds, the Filer proposes that:

(a) the Continuing Funds' Fund Communications include the performance data of the Terminating Funds;

(b) the simplified prospectus of each Continuing Fund:

(i) incorporate by reference the following financial statements and MRFP of each Terminating Fund (the Terminating Fund Disclosure):

(1) the annual financial statements and MRFPs referable to the corresponding Hedged Class or the Unhedged Class, as applicable, for the year ended March 31, 2012, when available; and

(2) the interim financial statements and MRFPs referable to the corresponding Hedged Class or the Unhedged Class, as applicable, for the period ended September 30, 2012, when available;

until such Terminmating Fund Disclosure is superseded by more current financial statements and MRFPs of each Continuing Fund;

(ii) state that the start date in the "Fund Details" table in the Part B for each Continuing Hedged Funds and Continuing Unhedged Funds is based upon the start date of the corresponding Hedged Class and Unhedged Class, respectively; and

(iii) use information of the Hedged Class and Unhedged Class for the purpose of calculating the information required under the "Fund Expenses Indirectly Borne by Investors" heading in Part B for each corresponding Continuing Hedged Fund and Continuing Unhedged Fund;

(c) the fund facts documents of each Continuing Fund:

(i) state under the Date Fund Created under the "Quick Facts" heading is based upon each Continuing Hedged Funds and Continuing Unhedged Funds was created on the date the corresponding Hedged Class was created and state under the "Quick Facts" heading that each Continuing Unhedged Fund was created on the date the corresponding Unhedged Class was created; and

(ii) include the performance data of the corresponding Terminating Funds.

38. The Financial Data of the Terminating Funds is significant information which can assist shareholders in determining whether to purchase or hold shares of the corresponding Continuing Funds.

39. The Filers have filed a separate application for exemptive relief from certain provisions of National Instrument 81-106 -- Investment Fund Continuous Disclosure to enable the Continuing Funds' to include in its annual and interim MRFPs Financial Data presented in the Terminating Fund's annual MRFP for the year ended March 31, 2012 and interim MRFP for the period ended September 30, 2012 (NI 81-106 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 under the Legislation is that the Exemption Sought is granted provided that:

1. In respect of the Reorganization Approval, the Management Information Circular sent to shareholders of the Terminating Funds provides sufficient information about the Proposed Reorganizations to permit shareholders to make an information decision about the Proposed Reorganizations; and

2. In respect of the Past Performance Relief:

(a) the Continuing Funds' Fund Communications include the applicable performance data of the Terminating Funds prepared in accordance with Part 15 of NI 81-102, including section 15(1) of NI 81-102;

(b) the Continuing Funds' simplified prospectus:

i. incorporates by reference the Terminating Fund Disclosure, until such Terminating Fund Disclosure is superseded by more current financial statements and MRFPs of the Continuing Funds;

ii. states that the start date for each series of Continuing Hedged Funds and Continuing Unhedged Funds is the start date of the corresponding series of the Hedged Classes and Unhedged Classes, respectively;

iii. discloses the Proposed Reorganization where the start date of each series of Continuing Hedged Funds and Continuing Unhedged Funds is stated;

(c) the fund facts document of each series of the Continuing Funds:

i. states that the Date Fund Created date for each series of the Continuing Hedged Funds and Continuing Unhedged Funds is the Date Fund Created date of the corresponding series of the Hedged Classes and Unhedged Classes, respectively;

ii. includes the performance data of the Terminating Funds prepared in accordance with Part 15 of NI 81-102, including section 15.9(1) of NI 81-102; and

iii. discloses the Proposed Reorganization where the Date Fund Created date of each series of the Continuing Funds is stated; and

(d) the Continuing Funds prepare their respective MRFPs in accordance with the NI 81-106 Relief.