Goodman & Company, Investment Counsel Ltd.

Headnote

NP 11-203 -- Process for Exemptive Relief Applications in Multiple Jurisdictions -- Relief granted from self-dealing provisions in s. 118(2)(b) of the Act and s. 115(6) of the Reg. to permit certain funds to conduct inter-fund trades between mutual funds, pooled funds, closed-end funds and managed accounts–inter-fund trades will comply with conditions in s. 6.1(2) of National Instrument 81-107–Independent Review Committee for Investment Funds (NI 81-107) including Independent Review Committee approval or client consent–trades involving exchange-traded securities are permitted to occur at "last sale price" as defined in the Universal Market Integrity Rules–relief also subject to pricing and transparency conditions.

Applicable Legislative Provisions

Securities Act (Ontario), ss. 118(2)(b), 121(2)(a)(ii), 147.

Ontario Regulation 1015 General Regulation, s. 115(6).

National Instrument 81-107 Independent Review Committee for Investment Funds, ss. 6.1(2) and 6.1(4).

September 19, 2008

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO

AND

ALBERTA, SASKATCHEWAN, NOVA SCOTIA

AND NEWFOUNDLAND AND LABRADOR

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATION IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

GOODMAN & COMPANY,

INVESTMENT COUNSEL LTD.

(the Filer) and the Existing Public Funds and

Existing Pooled Funds, the Existing Managed Accounts,

Future Public Funds, Future Pooled Funds and

Future Managed Accounts, all as defined below.

DECISION

Background

The securities regulatory authority or regulator in Ontario has received an application from the Filer for a decision under the securities legislation of the jurisdiction of the principal regulator (the Legislation) for an exemption from the prohibition in section 118(2)(b) of the Legislation (the Act) which prohibits a portfolio manager from knowingly causing an investment portfolio under its management to purchase or sell securities of an issuer from or to the account of a responsible person, any associate of a responsible person, or the portfolio manager in order to permit the portfolio manager of the Funds (as defined below) to cause the Funds to engage in trades (the Inter-Fund Trades) in securities of an issuer between any combination of any of the Public Funds, Pooled Funds and Managed Accounts (as defined below) (the Passport Exemption).

The securities regulatory authority or regulator in each of Ontario, Alberta, Saskatchewan, Nova Scotia and Newfoundland and Labrador) (the First Jurisdictions) (the First Coordinated Exemptive Relief Decision Makers) has received an application from the Filer for a decision under the securities legislation of the First Jurisdictions (the Legislation) for an exemption from the prohibition in section 115(6) of Ontario Regulation 1015 and the equivalent provisions in the securities legislation of First Jurisdictions which prohibit a purchase or sale of a security in which an investment counsel or any partner, officer or associate of an investment counsel has a direct or indirect beneficial interest from or to any portfolio managed or supervised by the investment counsel in order to permit Inter-Fund Trades (the First Coordinated Exemptive Relief).

The securities regulatory authority or regulator in each of Ontario and Newfoundland and Labrador (the Second Jurisdictions) (the Second Coordinated Exemptive Relief Decision Makers and together with the First Coordinated Exemptive Relief Decision Makers, the Coordinated Exemptive Relief Decision Makers)) has received an application for a decision under the securities legislation of the Second Jurisdictions (the Legislation) for an exemption from the prohibition in section 118(2)(b) of the Legislation and the equivalent provisions in the Second Jurisdictions which prohibit a portfolio manager from knowingly causing an investment portfolio under its management to purchase or sell securities of an issuer from or to the account of responsible person, any associate of a responsible person, or the portfolio manager in order to permit the Inter-Fund Trades (the Second Coordinated Exemptive Relief and together with the First Coordinated Exemptive Relief, the Coordinated Exemptive Relief).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions:

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

(b) the Filer 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, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland & Labrador, Northwest Territories, Yukon and Nunavut,

(c) the decision is the decision of the principal regulator, and

(d) the decision evidences the decision of each Coordinated Exemptive Relief Decision Maker.

Interpretation

Terms defined in MI 11-102, National Instrument 14-101 Definitions, NI 81-102 and NI 81-107 have the same meaning if used in this decision, unless otherwise defined.

Existing Funds means collectively, the Existing Managed Accounts, the Existing Public Funds and the Existing Pooled Funds;

Existing Managed Account means each existing managed account of the Filer;

Existing Pooled Fund means each Pooled Fund listed in Appendix A;

Existing Public Fund means each Public Fund listed in Appendix A;

Filer means the Manager

Funds means collectively, the Public Funds, the Pooled Funds and the Managed Accounts;

Future Funds means collectively, the Future Public Funds, the Future Pooled Funds and the Future Managed Accounts;

Future Managed Account means each future managed account that may be established by the Manager;

Future Pooled Fund means each future Pooled Fund that may be established by the Manager;

Future Public Fund means each future Public Fund that may be established by the Manager;

Inter-Fund Trading Prohibition means section 118(2)(b) of the Legislation and the equivalent provision in the securities legislation of the applicable Jurisdiction and section 115(6) of Ontario Regulation 1015 and the equivalent provision in the securities legislation of the First Coordinated Exemptive Relief Decision Makers;

Last Sale Price has the same meaning as in the Universal Market Integrity Rules;

Managed Accounts means the Existing Managed Accounts and the Future Managed Accounts;

Manager means Goodman & Company, Investment Counsel Ltd., the manager of the Funds;

NI 81-102 Funds means the Public Funds that are subject to NI 81-102 and are reporting issuers;

Pooled Funds means collectively, the Future Pooled Funds and the Existing Pooled Funds;

Public Funds means collectively, the Existing Public Funds and the Future Public Funds;

Regulations means the regulations to the Act; and

TSX means the Toronto Stock Exchange.

Representations

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

1. Each of the Public Funds and Pooled Funds is or will be established under the laws of the Province of Ontario or of Canada as investment funds that are (a) open-ended mutual fund trusts, (b) open-ended mutual fund corporations, or (c) closed-ended limited partnerships and/or closed-ended trusts.

2. Each of the NI 81-102 Funds are or will be subject to the provisions of NI 81-102. The securities of each of the NI 81-102 Funds and the other Public Funds (being the closed-ended limited partnership and/or closed-ended trusts) are or will be qualified for distribution pursuant to simplified prospectuses and annual information forms or long form prospectuses, as the case may be, that have been prepared or will be prepared and filed in accordance with the securities legislation of each of the applicable provinces and territories of Canada. The securities of the Pooled Funds are or will be qualified for distribution on a private placement basis pursuant to an offering memorandum.

3. The investment management agreement or the documentation in respect of a Managed Account does or will contain the authorization of the client for the Filer to purchase securities from, or to sell securities to, another Fund.

4. Each of the Public Funds is or will be a reporting issuer in each of the provinces and territories of Canada. The Pooled Funds will not be reporting issuers.

5. The Filer is, or will be, the manager, trustee (where applicable), principal distributor and registrar of the Funds. The Filer and/or sub-advisors, including a related sub-advisor, may be the portfolio manager(s) of the Funds.

6. The Filer is a corporation incorporated under the laws of the Province of Ontario, and holds a registration in the categories of "investment counsel" and "portfolio manager" in Ontario. The Filer also holds a registration in the categories of "investment counsel" and "portfolio manager" or the equivalent in each of Québec, British Columbia, Alberta, Manitoba, Saskatchewan, Nova Scotia and New Brunswick. The head office of the Filer is in Toronto, Ontario.

7. Certain of the Public Funds and Pooled Funds are "associates" of the Filer.

8. The Filer and each of the Funds are not in default of securities legislation in any jurisdiction of Canada.

9. The Filer is currently compliant with and acting in reliance on NI 81-107 and has established an independent review committee (IRC) for the Existing Public Funds. The Filer will establish an IRC for the Future Public Funds and an IRC for the Pooled Funds all in accordance with the requirements of NI 81-107.

10. The mandate of the IRC of a Pooled Fund, among other things, will include approving Inter-Fund Trades between the Pooled Fund and another Pooled Fund, an NI 81-102 Fund, a Public Fund and/or a Managed Account. The IRC of the Pooled Funds will be composed by the Filer in accordance with the requirements of section 3.7 of NI 81-107 and will be expected to comply with the standard of care set out in section 3.9 of NI 81-107. Further , the IRC of the Pooled Funds will not approve Inter-Fund Trades between a Pooled Fund, another Pooled Fund, a NI 81-102 Fund or other Public Fund and/or a Managed Account unless it has made the determination set out in section 5.2(2) of NI 81-107.

11. Purchases and sales of securities involving NI 81-102 Funds or other Public Funds will be referred to the IRC of NI 81-102 Funds or Public Funds, as the case may be, under section 5.2(1) of NI 81-107 and will be subject to the requirements of section 5.2(2) of NI 81-107.

12. The Filer has established policies and procedures to enable the Public Funds to engage in Inter-Fund Trades, and such policies and procedures will be revised and extended to the Pooled Funds for Inter-Fund Trades.

13. The Filer wishes to be able to permit any Fund to engage in Inter-Fund Trades with another Fund. More specifically, that would include Inter-Fund Trades between all different combinations of Public Funds, Pooled Funds and Managed Accounts. Different sections of the Act, the Regulations, NI 81-102 and NI 81-107 impose different prohibitions and exceptions on different types of Funds with respect to Inter-Fund Trades: Section 118(2)(b) of the Act and Section 115(6) of the Regulations prohibit every type of Fund from such Inter-Fund Trades while other provisions may only prohibit certain types of Funds in certain circumstances from such trades.

14. The Filer has determined that it would be in the interests of the NI 81-102 Funds, the Public Funds, the Pooled Funds and the Managed Accounts to receive the Passport Exemption and the Coordinated Exemptive Relief.

15. The Filer is able to rely upon the exemption in section 6.1(4) of NI 81-107 which grants Section 118(2)(b) Relief and Section 115(6) Relief only in connection with Inter-Fund Trades between Public Funds. An exemption for Inter-Fund Trades involving Pooled Funds and Managed Accounts is not provided for in section 6.1(4) of NI 81-107. Inter-Fund Trades involving only Public Funds will be conducted in accordance with the exemption codified under section 6.1(4) of NI 81-107.

16. The Filer considers that it would be in the bests interests of the Funds if an Inter-Fund Trade could be made at the last sale price, as defined in the Universal Market Integrity Rules (UMIR) created by the Investment Industry Regulatory Organization of Canada (formerly, Market Regulation Services Inc.) (as defined above, the Last Sale Price), prior to the execution of the trade since this will result in the trade being done at the price which is closest to the price at the time the decision to make the trade is made.

17. CSA Staff Notice 81-317 -- Frequently Asked Questions on National Instrument 81-107 Independent Review Committee for Investment Funds (Notice 31- 317) was published on March 30, 2007. Section B-7 of Notice 31-317 provides that the CSA would consider applications for exemptive relief to permit inter-fund trades of exchange-traded securities at the last sale price upon appropriate terms and conditions.

Decision

Each of the principal regulator and the Coordinated Exemptive Relief Decision Makers is satisfied that the decision meets the test set out in the Legislation for the relevant regulator or securities regulatory authority to make the decision.

The decision of the principal regulator and the Coordinated Exemptive Relief Decision Makers under the Legislation is that the Passport Exemption and the Coordinated Exemptive Relief are granted provided that the following conditions are satisfied for Inter-Fund Trades:

(a) the Inter-Fund Trade is consistent with the investment objective of the Public Fund, the Pooled Fund or the Managed Account;

(b) in respect of the Inter-Fund Trading Prohibition as it applies to a Public Fund trading with a Pooled Fund or a Managed Account:

(i) the IRC of the Public Fund has approved the Inter-Fund Trade in respect of the Public Fund under subsection 5.2 of NI 81-107;

(ii) if the transaction is with a Pooled Fund, the IRC of the Pooled Fund has approved the Inter-Fund Trade in respect of the Pooled Fund on the same terms as are required under subsection 5.2 of NI 81-107;

(iii) if the Inter-Fund Trade is with a Managed Account, the investment management agreement or other documentation in respect of the Managed Account authorizes the Inter-Fund Trade;

(iv) for exchange-traded securities, the Inter-Fund Trade is executed at the Last Sale Price of the security and the Inter-Fund Trade complies with subparagraph 6.1(2)(c), 6.1(2)((d), 6.1(2)(f) and 6.1(2)(g) of NI 81-107; and

(v) for all other securities, the Inter-fund Trade complies with subparagraphs 6.1(2)(c) to (g) of NI 81-107;

(c) in respect of the Inter-Fund Trading Prohibition as it applies to a Public Fund trading with a Public Fund;

(i) for exchange-traded securities, the Inter-Fund Trade is executed at the Last Sale Price of the security and the Inter-Fund Trade complies with subparagraph 6.1(2)(a), 6.1(2)(b), 6.1(2)(c), 6.1(2)(d), 6.1(2)(f) and 6.1(2)(g) of NI 81-107; and

(ii) for all other securities, the Inter-Fund Trade complies with subparagraphs 6.1(2)(a) to (g) of NI 81-107;

(d) in respect of the Inter-Fund Trading Prohibition as it applies to a Pooled Fund:

(i) the IRC of the Pooled Fund has approved the Inter-Fund Trade in respect of the Pooled Fund on the same terms as are required under subsection 5.2 of NI 81-107:

(ii) if the Inter-Fund Trade is with a Public Fund, or another Pooled Fund, the IRC of the Public Fund or the other Pooled Fund, as the case may be, has approved the Inter-Fund Trade in respect of the Public Fund or the other Pooled Fund, on the same terms as are required under subsection 5.2 of NI 81-107;

(iii) if the Inter-Fund Trade is with a Managed Account the investment management agreement or other documentation in respect of the Managed Account authorizes the Inter-Fund Trade;

(iv) for exchange-traded securities, the Inter-fund Trade is executed at the Last Sale Price of the security and the Inter-Fund Trade complies with subparagraph 6.1(2)(c), 6.1(2)(d), 6.1(2)(f) and 6.1(2)(g) of NI 81-107; and

(v) for all other securities, the Inter-Fund Trade complies with subparagraphs 6.1(2)(c) to (g) of NI 81-107;

(e) in respect of the Inter-Fund Trading Prohibition as it applies to a Managed Account:

(i) the investment management agreement or other documentation in respect of the Managed Account authorizes the Inter-Fund Trade, as does the investment management agreement or other documentation in respect of the other Managed Account, if the Inter-Fund Trade is with another Managed Account;

(ii) if the Inter-Fund Trade is with a Pooled Fund, or a Public Fund, the IRC of the Pooled Fund or Public Fund, as the case may be, has approved the Inter-Fund Trade in respect of the Pooled Fund or Pooled Fund on the same terms as are required under subsection 5.2 of NI 81-107;

(iii) for exchange-traded securities, the Inter-fund Trade is executed at the Last Sale Price of the security and the Inter-Fund Trade complies with subparagraph 6.1(2)(c), 6.1(2)(d), 6.1(2)(f) and 6.1(2)(g) of NI 81-107; and

(iv) for all other securities, the Inter-Fund Trade complies with subparagraphs 6.1(2)(c) to (g) of NI 81-107.

"David L. Knight"

"Margot C. Howard"

Appendix A

PUBLIC FUNDS

NI 81-102 Funds (also PUBLIC FUNDS)

POOLED FUNDS