R.N. Croft Financial Group Inc. and the Funds Listed in Schedule A

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Relief granted to mutual funds for extension of lapse date of prospectus for 66 days -- additional time needed for renewal of a prospectus due to ongoing review -- extension of lapse date will not impact currency of disclosure relating to the mutual funds.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5 as am., s. 62(5).

December 14, 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

R.N. CROFT FINANCIAL GROUP INC.

(the Filer)

AND

IN THE MATTER OF

THE FUNDS LISTED IN SCHEDULE A

(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 of the principal regulator (Legislation) for an exemption that the time limits pertaining to filing the renewal prospectus of the Funds be extended as if the lapse date of the simplified prospectus and annual information form of the Funds dated December 15, 2011, is February 19, 2013 (the Requested Relief).

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 is intended to be relied upon in British Colombia, Alberta, Saskatchewan and Manitoba (together with Ontario, the Jurisdictions).

Interpretation

Terms defined in National Instrument 14-101 -- Definitions and National Instrument 81-101 -- Mutual Funds Prospectus Disclosure (NI 81-101) have the same meaning if used in this decision, unless otherwise defined in this decision.

Representations

The decision is based on the following facts as represented by the Filer:

1. The Filer is the manager of the Funds listed in Schedule A hereto.

2. The Filer is a corporation existing under the laws of the Province of Ontario and is registered in each of the Jurisdictions as a portfolio manager and investment fund manager.

3. Units of the Funds are currently qualified for distribution in each of the Jurisdictions under the current simplified prospectus of the Funds dated December 15, 2011, as amended by Amendment No. 1 dated August 23, 2012 (the Current Prospectus) and the Funds are reporting issuers in each of the Jurisdictions.

4. Neither the Funds, nor the Filer, is in default of securities legislation in any of the Jurisdictions.

5. On August 15, 2012, the Filer announced that it had entered into an agreement with Pro-Financial Asset Management Inc. (PFAM) to assign management of the Funds to PFAM (Change of Manager), subject to the receipt of the approval of the Funds' independent review committee, shareholder approval, regulatory approval and the satisfaction of certain closing conditions (and together with Other Matters Requiring Shareholder Approval as defined below, the Transaction). A press release and amendments to the simplified prospectus, annual information form and fund facts for the Funds were filed in connection with the announcement of the Change of Manager.

6. Subject to approval of the shareholders of the Funds or series of a Fund, as necessary, and effective upon the Change of Manager, the following changes are also expected to occur (i) the fundamental investment objective of each Fund, other than for Class F-1 Alternative Strategies, will change; and (ii) the management fees applicable to the series A shares of Class E-1 Emerging Markets and Class F-1 Alternative Strategies will increase (the Other Matters Requiring Shareholder Approval). The proposed changes to the Funds are described in more detail in the management information circular, which was mailed to shareholders of the Funds and copies thereof were filed on SEDAR in accordance with applicable securities legislation.

7. In connection with the Transaction,

(a) The Filer referred the Transaction to the independent review committee of the Funds which reviewed the proposed changes in connection with the Transaction and determined that such changes would achieve a fair and reasonable result for the Funds;

(b) shareholder approval for the Change of Manager, and the Other Matters Requiring Shareholder Approval was obtained at special meetings of shareholders of each of the Funds held on September 26, 2012;

(c) on September 24, 2012, the Filer, on behalf of the Funds, applied for regulatory approval for the Change of Manager as contemplated under section 5.5(1)(a) of NI 81-102 such that PFAM could become the new manager of the Funds.

8. The Filer expected that regulatory approval for Change of Manager would be granted by the OSC by November 15, 2012, which is 30 days prior to the Current Lapse Date. Upon receipt of such approval, the Filer and PFAM expected to close the Transaction and that PFAM would file a preliminary and pro forma simplified prospectus, annual information form and fund facts for the Funds in its capacity as the new manager of the Funds by November 15, 2012.

9. On November 15, 2012, the OSC advised that regulatory approval for the Change of Manager had been delayed. Accordingly, a preliminary and pro forma simplified prospectus and annual information form for the Funds could not be filed on November 15, 2012.

10. The Filer understands that PFAM is working diligently with the OSC to address all of the outstanding inquiries that the OSC may have in connection with the Change of Manager.

11. If regulatory approval for Change of Manager is not obtained, the Filer may, among other possibilities, consider termination of the Funds subject to necessary notice requirements to securityholders of the Funds and to the regulator under applicable securities laws.

12. Pursuant to the Legislation, the lapse date for the Current Prospectus is December 15, 2012 (the Current Lapse Date). Accordingly, under the Legislation, distribution of the securities of the Funds would cease on December 17, 2012 given that December 15, 2012, the Current Lapse Date is a Saturday unless (i) the Funds filed a pro forma prospectus for the Funds at least 30 days prior to the Current Lapse Date; (ii) the final simplified prospectus is filed no later than 10 days after the Current Lapse Date i.e. by December 27, 2012 given that December 25, 2012 and December 26, 2012 are statutory holidays; and (iii) a receipt for the final simplified prospectus is obtained within 20 days of the Current Lapse Date.

13. Since a pro forma prospectus for the Funds was not filed by November 15, 2012, absent the Requested Relief, continued distribution of the securities of the Funds would cease on December 17, 2012.

14. The requested extension date of February 19, 2013 takes into account that (i) the time required by the OSC to complete its review on the regulatory approval for the Change of Manager; and (ii) the time required by the OSC to review and issue comment letter(s) for the preliminary and pro forma simplified prospectus of the Funds. The Filer submits that the requested extension under the circumstances is not prejudicial to the public interest.

15. There have been no material changes in the affairs of the Funds since the date of the Current Prospectus. Accordingly, the Current Prospectus represents current information regarding each Fund.

16. The Requested Relief will not materially affect the currency or accuracy of the information contained in the Current Prospectus and therefore will not be prejudicial to the public interest.

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.

SCHEDULE A

Class A-1 Income

Class B-1 Canadian Equity

Class C-1 U.S. Equity

Class D-1 International Equity

Class E-1 Emerging Markets Equity

Class F-1 Alternative Strategies

shares of

PIE Portfolio Index Evolution Corporation

(collectively, the "Funds")