CI Investments Inc. and KBSH Capital Management Inc.

Decision

Headnote

Passport System -- Process for Exemptive Relief Applications in Multiple Jurisdictions -- National Instrument 33-109 Registration Information (NI 33-109) -- relief from certain filing requirements of NI 33-109 in connection with a bulk transfer of business locations and registered and non-registered individuals under an amalgamation.

Multilateral Instruments Cited

Multilateral Instrument 11-102 Passport System.

National Instruments Cited

National Instrument 33-109 Registration Information.

January 29, 2009

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

CI INVESTMENTS INC. (CII)

AND KBSH CAPITAL MANAGEMENT INC. (KBSH)

(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 Ontario (the Legislation), for relief pursuant to section 7.1 of National Instrument 33-109 Registration Information (NI 33-109) to allow the bulk transfer of all of the registered individuals and all of the locations of each of the Filers to a new amalgamated entity, CI Investments Inc. (as described below) (the Bulk Transfer), on or about January 1, 2009 in accordance with section 3.1 of the companion policy to NI 33-109 (the Exemption Sought).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions:

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

(ii) the Filers have provided notice that subsection 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon by each of the Filers on the same basis in all of the other provinces of Canada (together 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 Filers:

CII

1. CII is a wholly-owned subsidiary of Canadian International LP. The head office of CII is in Ontario.

2. CII is registered as an adviser in the categories of investment counsel and portfolio manager and as a dealer in the category of limited market dealer under theSecurities Act (Ontario). CII is also registered as an adviser in the categories of commodity trading counsel and commodity trading manager under the Commodity Futures Act (Ontario).

3. CII is not in default of the securities legislation in any of the Jurisdictions.

KBSH

4. KBSH is a wholly-owned subsidiary of Rockwater Asset Management Ltd (RAM). The head office of KBSH is in Ontario.

5. KBSH is registered as an adviser in the categories of investment counsel and portfolio manager (or its equivalent) in all of the provinces of Canada. KBSH is also registered as a dealer in the category of limited market dealer in Ontario.

6. KBSH is not in default of the securities legislation in any of the Jurisdictions.

Integration / Amalgamation

7. The Filers have confirmed that the Filers, RAM and Lakeview Asset Management Inc. (LAM) amalgamated on January 1, 2009. The new amalgamated entity will be named CI Investments Inc. (Amalco).

8. RAM and LAM are not currently registered in any of the Jurisdictions.

9. Effective on January 1, 2009, all of the current registerable activities of CII and KBSH have become the responsibility of Amalco. Amalco has assumed all of the existing registrations and approvals for all of the registered individuals and all of the locations of the Filers. It is not anticipated that there will be any disruption in the ability of the Filers to advise and trade (where applicable) on behalf of their respective clients, and Amalco should be able to advise and trade (where applicable) on behalf of such clients immediately after the amalgamation.

10. Amalco continues, and will continue to be registered in the same categories of registration as CII was registered as in Ontario and as KBSH was registered as in each province, including being registered for exchange contracts in British Columbia, and will be subject to, and will comply with, all applicable securities laws. Amalco will maintain its limited market dealer category in Ontario only, and its commodity trading manager and commodity trading counsel category (or its equivalent) in Ontario and British Columbia only.

11. Amalco will carry on the same securities business of the Filers in substantially the same manner with essentially the same personnel.

12. The Exemption Sought will not be contrary to public interest and will have no negative consequences on the ability of Amalco to comply with all applicable regulatory requirements or the ability to satisfy any obligations in respect of the clients of the Filers.

13. Given the significant number of registered individuals of the Filers, it would be extremely difficult to transfer each individual to Amalco in accordance with the requirements of NI 33-109 if the Exemption Sought is not granted.

14. A press release was previously issued on or about December 1, 2008 advising the public of the amalgamation of the Filers. The clients of the Filers have also been contacted and advised of the amalgamation.

15. The head office of Amalco will be CII's current head office location, which is located at 2 Queen Street East, Twentieth Floor, Toronto, Ontario M5C 3G7 Telephone: (416) 364-1145 Fax: (416) 365-0501.

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 the Filers make acceptable arrangements with CDS Inc. for the payment of the costs associated with the Bulk Transfer, and make such payment in advance of the Bulk Transfer.

"Donna Leitch"
Assistant Manager, Registrant Regulation
Ontario Securities Commission