ING Direct Asset Management Limited et al.

Headnote

NP 11-203 -- Process for Exemptive Relief Applications in Multiple Jurisdictions -- approval granted for change of control of mutual fund manager under s. 5.5(2) of NI 81-102 and relief for abridgement of the related 60 day notice requirement to 57 days under s.5.8(1)(a) of NI 81-102 -- revoking and replacing previous decision granting approval for change of control of mutual fund manager due to changed closing date -- conditional on at least 57 days' notice to securityholders and no change being made to the management, administration or portfolio management of the funds for at least 60 days after the notice is delivered -- the filer has no plans to change the manager of the funds or to amalgamate or to merge the current manager with any other entity in the immediate or foreseeable future.

Applicable Legislative Provisions

National Instrument 81-102 Mutual Funds, ss. 5.5(2), 5.8(1)(a), 19.1.

Securities Act, R.S.O. 1990, c. S.5, as am., s. 144.

November 8, 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

ING DIRECT ASSET MANAGEMENT LIMITED

(THE FILER OR MANAGER)

AND

ING DIRECT STREETWISE BALANCED INCOME FUND

ING DIRECT STREETWISE BALANCED FUND

ING DIRECT STREETWISE BALANCED GROWTH FUND

ING DIRECT STREETWISE EQUITY GROWTH FUND

(THE FUNDS)

DECISION

Background

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

(a) approval of an indirect change of control of the Manager (the Change of Control of Manager) of the Funds in accordance with Section 5.5(2) of National Instrument 81-102 Mutual Funds (NI 81-102) (the Approval Sought);

(b) an abridgment of the 60 day notice period prescribed by Section 5.8(1)(a) of NI 81-102 for delivering notice of the Change of Control of Manager to the securityholders of the Funds to 57 days (the Notice Requirement) (the Exemption Sought); and

(c) a revocation of the prior decision dated October 15, 2012 (the Original Decision) granting the Approval Sought.

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

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

(b) the Manager 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 each province and territory of Canada other than Ontario (collectively, with Ontario, the Jurisdictions).

Interpretation

Terms defined in National Instrument 14-101 Definitions and MI 11-102 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 Manager

1. The Manager is a corporation incorporated under the laws of Canada and has its head office in Toronto, Ontario.

2. The Manager is the manager, portfolio advisor and trustee of the Funds.

3. The Manager is registered as an investment fund manager (IFM) and as a portfolio manager (PM) in Ontario.

4. The Funds are reporting issuers in all of the Jurisdictions. The Funds are offered by means of a simplified prospectus in accordance with the requirements of Form 81-101F1 and are marketed and distributed through ING Direct Funds Limited, a registered mutual fund dealer in all of the Jurisdictions.

5. The Manager and the Funds are not in default of applicable securities legislation in any of the Jurisdictions.

The Transaction

6. The Manager is a direct, wholly-owned subsidiary of ING Bank of Canada (ING Bank Canada). ING Bank Canada is a Schedule II Canadian chartered bank and is an indirect, wholly-owned subsidiary of ING Groep N.V. (ING Group).

7. In a press release dated August 29, 2012, ING Group announced that an agreement was reached to sell all of the issued and outstanding shares of ING Bank Canada to The Bank of Nova Scotia (Scotiabank) (the Transaction).

8. The Transaction is subject to regulatory approvals and is expected to close on November 15, 2012, but in any event, no later than December 31, 2012 (the Closing).

9. Following the Closing, while Scotiabank will become the new owner of the Manager, no substantive changes are expected in the operation or management of the Funds by the Manager.

Scotiabank

10. Scotiabank is a Schedule I Canadian chartered bank having assets of approximately $670 billion as at July 31, 2012.

11. Scotiabank is a reporting issuer in all of the Jurisdictions and its shares are listed and posted for trading on the Toronto Stock Exchange and the New York Stock Exchange under the symbol "BNS".

Change of Control of Manager

12. In respect of the impact of the Change of Control of Manager on the Manager and the management and administration of the Funds:

(a) Scotiabank has confirmed that there is no current intention:

(i) to make any substantive changes as to how the Manager operates or manages the Funds;

(ii) to merge the Manager with any other IFM;

(iii) immediately following the Closing, to change the Manager to Scotiabank or an affiliate of Scotiabank; and

(iv) within a foreseeable period of time, to change the Manager to Scotiabank or an affiliate of Scotiabank.

(b) Scotiabank currently intends to maintain the Funds as a separately managed fund family with the Manager as their IFM and PM;

(c) the Closing is not expected to have any material impact on the business, operations or affairs of the Funds or the securityholders of the Funds;

(d) following the Closing, the directors and officers of the Manager will be unchanged and the Manager will retain the management teams and supervisory personnel that were in place immediately prior to the Closing, and from and after the Closing, the compliance activities of the Manager will be subject to oversight by Scotiabank's compliance group;

(e) it is not expected that there will be any change in the management of the Funds, including investment objectives and strategies of the Funds, or the expenses that are charged to the Funds as a result of the Closing;

(f) there is no current intention to change the name of the Manager or the names of the Funds as a result of the Transaction immediately after the Closing;

(g) the Closing will not adversely affect the Manager's financial position or its ability to fulfill its regulatory obligations; and

(h) upon the Change of Control of Manager, the members of the Manager's Independent Review Committee (IRC) will cease to be IRC members by operation of section 3.10(1)(c) of National Instrument 81-107 Independent Review Committee for Investment Funds. Immediately following the change of control, the IRC will be reconstituted.

Notice Requirement

13. The notice to the securityholders of the Funds with respect to the Transaction in accordance with Section 5.8(1)(a) of NI 81-102 (the Notice) was provided electronically or by mail to such securityholders on September 19, 2012 (the Notice Date), which means that if the Closing occurs on November 15, 2012 such securityholders will have received the Notice 57 days in advance of the Change of Control of Manager.

14. The Filer submits that it would not be prejudicial to the securityholders of the Funds to abridge the notice period prescribed by Section 5.8(1)(a) of NI 81-102 from 60 days to not less than 57 days for the following reasons:

(a) while the Transaction will result in the Change of Control of Manager, as noted above, there is not expected to be any change in how the Manager administers or manages the Funds;

(b) the Transaction will not have any impact on the securityholders' interest in the Funds;

(c) the securityholders of the Funds will still be able to redeem their securities of the Funds prior to the Closing; and

(d) the Transaction has been well publicized since August 29, 2012 such that most securityholders of the Funds are probably already aware of the Transaction.

15. The Original Decision issued on October 15, 2012 stated that the securityholders would receive the Notice more than 60 days prior to the Closing. Subsequent to the Original Decision, the Closing date for the Transaction was changed from by or prior to December 14, 2012 to November 15, 2012. As a result of changing the Closing date to November 15, 2012, the securityholders would receive the Notice only 57 days prior to the Closing. Thus, the Filer requires exemptive relief from the Notice Requirement in addition to approval of the Change of Control of Manager.

16. As of the date of this decision, the Filer will no longer rely on the Original Decision.

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:

(a) the Approval Sought is granted;

(b) the Exemption Sought is granted provided that:

a. the securityholders of the Funds are given at least 57 days notice of the Change of Control of Manager; and

b. no material changes will be made to the management, operations or portfolio management of the Funds for at least 60 days following the Notice Date; and

(c) the Original Decision is revoked and replaced by this decision.