National Bank Securities Inc. et al.

Headnote

NP 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Approval of mutual fund mergers -- approval required because mergers do not meet the criteria for pre-approved reorganizations and transfers in National Instrument 81-102 -- some continuing funds have different investment objectives and fees than terminating funds, some mergers not a "qualifying exchange" or a tax-deferred transaction under Income Tax Act, tailored document will be sent to securityholders instead of complete current prospectus and financial statements will be sent upon request - securityholders of terminating funds provided with timely and adequate disclosure regarding the mergers.

Applicable Legislative Provisions

National Instrument 81-102 Mutual Funds, ss. 5.5(1)(b), 5.6.

May 29, 2009

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

QUEBEC AND ONTARIO

(the Jurisdictions)

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

NATIONAL BANK SECURITIES INC.

(the Manager)

AND

NATIONAL BANK TREASURY BILL PLUS FUND

ALTAMIRA T-BILL FUND

ALTAMIRA SHORT TERM GOVERNMENT BOND FUND

ALTAMIRA INFLATION-ADJUSTED BOND FUND

ALTAMIRA SHORT TERM GLOBAL INCOME FUND

ALTAMIRA HIGH YIELD BOND FUND

ALTAMIRA MONTHLY INCOME FUND

ALTAMIRA BALANCED FUND

NATIONAL BANK RETIREMENT BALANCED FUND

ALTAMIRA GLOBAL DIVERSIFIED FUND

NATIONAL BANK/FIDELITY CANADIAN ASSET ALLOCATION FUND

ALTAMIRA CANADIAN VALUE FUND

ALTAMIRA CAPITAL GROWTH FUND LIMITED

ALTAMIRA SPECIAL GROWTH FUND

ALTAMIRA GLOBAL VALUE FUND

NATIONAL BANK FUTURE ECONOMY FUND

ALTAMIRA SELECT AMERICAN FUND

NATIONAL BANK EUROPEAN EQUITY FUND

NATIONAL BANK ASIA-PACIFIC FUND

ALTAMIRA GLOBAL DISCOVERY FUND

NATIONAL BANK EUROPEAN SMALL CAPITALIZATION FUND

NATIONAL BANK NATURAL RESOURCES FUND

NATIONAL BANK GLOBAL TECHNOLOGIES FUND

NATIONAL BANK CANADIAN INDEX FUND

NATIONAL BANK CANADIAN INDEX PLUS FUND

NATIONAL BANK AMERICAN INDEX PLUS FUND

ALTAMIRA PRECISION EUROPEAN INDEX FUND

ALTAMIRA PRECISION U.S. MIDCAP INDEX FUND

(each, a Terminating Fund and collectively, the Terminating Funds,

and with the Manager, the Filers)

DECISION

Background

The securities regulatory authority or regulator in each of the Jurisdictions (Decision Maker) has received an application from the Filers for a decision under the securities legislation of the Jurisdictions (Legislation) for approval under subsection 5.5(1)(b) of National instrument 81-102 Mutual Funds (NI 81-102) of the mergers (Mergers) of the Terminating Funds into the applicable Continuing Funds (defined below) (Approval Sought).

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

(a) the Autorité des marchés financiers is the principal regulator for this application;

(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 British Columbia, Alberta, Saskatchewan, Manitoba, Nova Scotia, New Brunswick, Prince Edward Island, Newfoundland and Labrador, Northwest Territories, the Yukon Territory and Nunavut Territory, where applicable; and

(c) the decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.

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. The following additional terms shall have the following meanings:

Altamira Funds means Altamira T-Bill Fund, Altamira Short Term Government Bond Fund, Altamira Inflation-Adjusted Bond Fund, Altamira Short Term Global Income Fund, Altamira High Yield Bond Fund, Altamira Monthly Income Fund, Altamira Balanced Fund, Altamira Global Diversified Fund, Altamira Canadian Value Fund, Altamira Capital Growth Fund Limited, Altamira Special Growth Fund, Altamira Global Value Fund, Altamira Select American Fund, Altamira Global Discovery Fund, Altamira Precision European Index Fund and Altamira Precision U.S. Midcap Index Fund;

Continuing Funds means National Bank Money Market Fund, National Bank Mortgage Fund, Altamira Long Term Bond Fund, National Bank Global Bond Fund, National Bank High Yield Bond Fund, National Bank Monthly Income Fund, National Bank Balanced Diversified Fund, National Bank Growth Diversified Fund, Altamira Growth & Income Fund, National Bank Canadian Equity Fund, Altamira Equity Fund, National Bank Small Capitalization Fund, National Bank Global Equity Fund, Altamira US Larger Company Fund, Altamira European Equity Fund, Altamira Asia Pacific Fund, National Bank Emerging Markets Fund, Altamira Global Small Company Fund, Altamira Resource Fund, Altamira Science and Technology Fund, Altamira Precision Canadian Index Fund, National Bank American Index Fund, Altamira Precision International Currency Neutral Index Fund and Altamira Precision U.S. Currency Neutral Index Fund;

Current Simplified Prospectus means, as applicable, the simplified prospectus relating to the National Bank Mutual Funds dated May 16, 2008, as amended, or the simplified prospectus relating to the Altamira Funds dated November 3, 2008, as amended, that qualifies the Continuing Funds, among others, for sale;

Fund or Funds means, individually or collectively, the Terminating Funds and the Continuing Funds;

IRC means the independent review committee for the Funds;

Materially Changed Continuing Fund means Altamira US Larger Company Fund;

National Bank Mutual Funds means National Bank Treasury Bill Plus Fund, National Bank Retirement Balanced Fund, National Bank/Fidelity Canadian Asset Allocation Fund, National Bank Future Economy Fund, National Bank European Equity Fund, National Bank Asia-Pacific Fund, National Bank European Small Capitalization Fund, National Bank Natural Resources Fund, National Bank Global Technologies Fund, National Bank Canadian Index Fund, National Bank Canadian Index Plus Fund and National Bank American Index Plus Fund;

NI 81-107 means National Instrument 81-107 Independent Review Committee for Investment Funds; and

Tax Act means the Income Tax Act (Canada).

Representations

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

1. The Manager is a corporation governed by the Canada Business Corporations Act, with its head office in Montreal, Quebec.

2. The Manager is the manager of each of the Funds.

3. The Funds are either open-ended mutual fund trusts established under the laws of Ontario or mutual fund corporations governed under the laws of Ontario.

4. Securities of the National Bank Mutual Funds are currently qualified for sale in each province and territory of Canada by a simplified prospectus and annual information form dated May 16, 2008 (as they may be amended from time to time). Securities of the Altamira Funds are currently qualified for sale in each province and territory of Canada by a simplified prospectus and annual information form dated November 3, 2008 (as they may be amended from time to time).

5. Each of the Funds is a reporting issuer under applicable securities legislation of each province and territory of Canada. None of the Funds or the Manager are in default of securities legislation in any province or territory of Canada.

6. Other than circumstances in which the securities regulatory authority of a province or territory of Canada has expressly exempted a Fund therefrom, each of the Funds follows the standard investment restrictions and practices established by the Decision Makers.

7. The net asset value for each series of the Funds is calculated on a daily basis on each day that the Toronto Stock Exchange is open for trading.

8. The Manager intends to reorganize the Funds as follows:

(a) National Bank Treasury Bill Plus Fund and Altamira T-Bill Fund will merge into National Bank Money Market Fund;

(b) Altamira Short Term Government Bond Fund will merge into National Bank Mortgage Fund;

(c) Altamira Inflation-Adjusted Bond Fund will merge into Altamira Long Term Bond Fund;

(d) Altamira Short Term Global Income Fund will merge into National Bank Global Bond Fund;

(e) Altamira High Yield Bond Fund will merge into National Bank High Yield Bond Fund;

(f) Altamira Monthly Income Fund will merge into National Bank Monthly Income Fund;

(g) Altamira Balanced Fund and National Bank Retirement Balanced Fund will merge into National Bank Balanced Diversified Fund;

(h) Altamira Global Diversified Fund will merge into National Bank Growth Diversified Fund;

(i) National Bank/Fidelity Canadian Asset Allocation Fund will merge into Altamira Growth & Income Fund;

(j) Altamira Canadian Value Fund will merge into National Bank Canadian Equity Fund;

(k) Altamira Capital Growth Fund Limited will merge into Altamira Equity Fund;

(l) Altamira Special Growth Fund will merge into National Bank Small Capitalization Fund;

(m) Altamira Global Value Fund and National Bank Future Economy Fund will merge into National Bank Global Equity Fund;

(n) Altamira Select American Fund will merge into Altamira US Larger Company Fund;

(o) National Bank European Equity Fund will merge into Altamira European Equity Fund;

(p) National Bank Asia-Pacific Fund will merge into Altamira Asia Pacific Fund;

(q) Altamira Global Discovery Fund will merge into National Bank Emerging Markets Fund;

(r) National Bank European Small Capitalization Fund will merge into Altamira Global Small Company Fund;

(s) National Bank Natural Resources Fund will merge into Altamira Resource Fund;

(t) National Bank Global Technologies Fund will merge into Altamira Science and Technology Fund;

(u) National Bank Canadian Index Fund and National Bank Canadian Index Plus Fund will merge into Altamira Precision Canadian Index Fund;

(v) National Bank American Index Plus Fund will merge into National Bank American Index Fund;

(w) Altamira Precision European Index Fund will merge into Altamira Precision International Currency Neutral Index Fund; and

(x) Altamira Precision U.S. Midcap Index Fund will merge into Altamira Precision U.S. Currency Neutral Index Fund.

9. The Merger of Altamira Select American Fund into Altamira US Larger Company Fund will be a material change for the Continuing Fund, as the net asset value of the Continuing Fund is smaller than the net asset value of the Terminating Fund.

10. A press release announcing the proposed Mergers was issued and filed on April 6, 2009 and amendments to the simplified prospectuses and annual information forms of the Funds and a material change report with respect to the proposed Mergers were filed via SEDAR on April 16, 2009.

11. As required by securities regulation, the Manager presented the conflict of interest matters inherent to the proposed Mergers to the IRC. In the context of its mandate and of NI 81-107, the IRC issued a favourable recommendation with respect to the policies proposed by the Manager to address these conflicts of interest.

12. The portfolios and other assets of each Terminating Fund to be acquired by the applicable Continuing Fund arising from the Mergers are currently, or will be, acceptable, on or prior to the effective date of the Mergers, to the portfolio advisors of the applicable Continuing Fund and are or will be consistent with the investment objectives of the applicable Continuing Fund.

13. None of the Continuing Funds will assume the liabilities of the applicable Terminating Fund(s). Each Terminating Fund will retain sufficient assets to satisfy its estimated liabilities, if any, as of the date of the Mergers.

14. Securityholders of each Terminating Fund will receive, on a dollar-for-dollar basis, securities in the same or an equivalent series of the applicable Continuing Fund as they currently own in the Terminating Fund:

(a) Where an Altamira Fund is being merged into a National Bank Mutual Fund, Mutual Fund securities of the Altamira Fund will be exchanged for Investor Series securities of the National Bank Mutual Fund.

(b) Where a National Bank Mutual Fund is being merged into an Altamira Fund, Investor Series securities of the National Bank Mutual Fund will be exchanged for Mutual Fund securities of the Altamira Fund.

(c) New Advisor Series securities will be created for any Continuing Fund that is an Altamira Fund if the Terminating Fund is a National Bank Mutual Fund that currently offers Advisor Series securities.

(d) Series I securities (and Series A securities if any are outstanding as of the effective date of the Merger) of Altamira Inflation-Adjusted Bond Fund will be exchanged for Investor Series securities of Altamira Long Term Bond Fund.

15. No sales charges will be payable in connection with the acquisition by a Continuing Fund of the investment portfolio of an applicable Terminating Fund.

16. Each Terminating Fund will merge into the applicable Continuing Fund on or about the close of business on June 12, 2009. Each Terminating Fund will be wound up as soon as reasonably possible following the Mergers, and the Continuing Funds will continue as publicly offered open-end mutual funds governed by the laws of Ontario.

17. Securityholders of a Terminating Fund will continue to have the right to redeem securities of the Terminating Fund for cash at any time up to the close of business on the effective date of the Mergers.

18. A notice of meeting, a management information circular and a proxy in connection with meetings of securityholders (collectively, the Meeting Materials), describing the proposed Mergers and the IRC's recommendation under paragraph 11 above, was mailed to securityholders of the Terminating Funds and securityholders of the Materially Changed Continuing Fund, on May 13, 2009 and filed via SEDAR on May 14, 2009.

19. Securityholders of the Terminating Funds and of the Materially Changed Continuing Fund will be asked to approve the Mergers at meetings to be held on June 4, 2009.

20. The Manager will pay for the costs of the Mergers. These costs consist mainly of brokerage charges associated with the merger-related trades that occur both before and after the date of the Mergers and legal, proxy solicitation, printing, mailing and regulatory fees.

21. Approval of the Mergers is required because each Merger does 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) in each of the Mergers, the Continuing Funds do not have substantially similar investment objectives to the relevant Terminating Fund, with the exception of:

(i) the Merger of Altamira High Yield Bond Fund into National Bank High Yield Bond Fund;

(ii) the Merger of Altamira Monthly Income Fund into National Bank Monthly Income Fund;

(iii) the Merger of Altamira Balanced Fund into National Bank Balanced Diversified Fund;

(iv) the Merger of National Bank European Equity Fund into Altamira European Equity Fund;

(v) the Merger of National Bank Asia-Pacific Fund into Altamira Asia Pacific Fund;

(vi) the Merger of Altamira Global Discovery Fund into National Bank Emerging Markets Fund;

(vii) the Merger of National Bank Natural Resources Fund into Altamira Resource Fund;

(viii) the Merger of National Bank Global Technologies Fund into Altamira Science and Technology Fund; and

(ix) the Merger of National Bank Canadian Index Fund into Altamira Precision Canadian Index Fund.

(b) In each of the following Mergers, the Continuing Funds and relevant Terminating Fund do not have substantially similar fee structures:

(i) the Merger of National Bank Treasury Bill Plus Fund and Altamira T-Bill Fund into National Bank Money Market Fund;

(ii) the Merger of Altamira Short Term Government Bond Fund into National Bank Mortgage Fund;

(iii) the Merger of Altamira Inflation-Adjusted Bond Fund into Altamira Long Term Bond Fund;

(iv) the Merger of Altamira Short Term Global Income Fund into National Bank Global Bond Fund;

(v) the Merger of Altamira Balanced Fund into National Bank Balanced Diversified Fund;

(vi) the Merger of Altamira Global Diversified Fund into National Bank Growth Diversified Fund;

(vii) the Merger of National Bank/Fidelity Canadian Asset Allocation Fund into Altamira Growth & Income Fund;

(viii) the Merger of Altamira Capital Growth Fund Limited into Altamira Equity Fund;

(ix) the Merger of Altamira Special Growth Fund into National Bank Small Capitalization Fund;

(x) the Merger of Altamira Global Value Fund into National Bank Global Equity Fund; and

(xi) the Merger of National Bank Canadian Index Fund and National Bank Canadian Index Plus Fund into Altamira Precision Canadian Index Fund.

(c) each of the Mergers will not be a "qualifying exchange" within the meaning of section 132.2 of the Tax Act or a tax-deferred transaction under subsection 85(1), 85.1(1), 86(1) or 87(1) of the Tax Act, with the exception of the Merger of Altamira Short Term Government Bond Fund into National Bank Mortgage Fund and the Merger of Altamira Short Term Global Income Fund into National Bank Global Bond Fund;

(d) the Current Simplified Prospectus will not be sent to securityholders of the Terminating Funds but, instead, the Manager will send such securityholders an excerpt of the Current Simplified Prospectus consisting of Part A and Part B for the relevant Continuing Fund; and

(e) the most recent annual and interim financial statements for the Continuing Funds will not be sent to the securityholders of the Terminating Funds but, instead, the Manager will prominently disclose in the information circular sent to securityholders of the Terminating Funds that they can obtain the most recent interim and annual financial statements of the Continuing Funds by accessing the SEDAR website at www.sedar.com, by accessing the Manager's website or by calling a toll-free number.

22. The Manager will, except as noted above in paragraph 21, comply with all of the other criteria for pre- approved reorganizations and transfers set out in section 5.6 of NI 81-102.

23. The tax implications of the Mergers as well as the foregoing differences between the investment objectives and fee structures of the Terminating Funds and the Continuing Funds are described in the Meeting Materials so that the securityholders of the Terminating Funds may consider this information before voting on the Mergers. The Meeting Materials also describe the various ways in which investors can obtain a copy of the annual information forms and the management reports of fund performance for the Continuing Funds.

Decision

Each of the Decision Makers is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.

The decision of the Decision Makers under the Legislation is that the Approval Sought is granted provided that:

(a) the information circular sent to securityholders in connection with a Merger provides sufficient information about the Merger to permit securityholders to make an informed decision about the Merger;

(b) the information circular sent to securityholders in connection with a Merger prominently discloses that securityholders can obtain the most recent interim and annual financial statements of the applicable Continuing Fund by accessing the SEDAR website at www.sedar.com, by accessing the Manager's website or by calling the Manager's toll-free telephone number;

(c) upon request by a securityholder for financial statements, the Manager will make best efforts to provide the securityholder with financial statements of the applicable Continuing Fund in a timely manner so that the securityholder can make an informed decision regarding a Merger;

(d) each applicable Terminating Fund and the applicable Continuing Fund with respect to a Merger have an unqualified audit report in respect of their last completed financial period; and

(e) the material sent to securityholders of the Terminating Funds in respect of each Merger includes a tailored simplified prospectus consisting of:

(i) the Part A of the Current Simplified Prospectus; and

(ii) the Part B of the Current Simplified Prospectus of the applicable Continuing Fund.