Dynamic RSP Health Sciences Fund and Dynamic RSP Global Technology Fund

Headnote

Investment for specified purpose by mutual funds in securities of another mutual fundthat is under common management exempted from the requirements of clause111(2)(b), subsection 111(3), clauses 117(1)(a), and 117(1)(d) subject to certainspecified conditions.

Statutes Cited

Securities Act (Ontario), R.S.O. 1990 c.S.5, as am. ss. 111(2)(b), 111(3), 113,117(1)(a), 117(1)(d), 117(2), and 121(2)(a)(ii).

WHEREAS the regulator or securities regulatory authority (the "Decision Maker")in each of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Québec, NovaScotia and Newfoundland (the "Jurisdictions") has received an application (the"Application") from Dynamic Mutual Funds Ltd. ("Dynamic") in its own capacity and onbehalf of Dynamic RSP Health Sciences Fund, Dynamic RSP Global Technology Fund(collectively, the "Funds") and other mutual funds managed by Dynamic after the dateof this Decision (defined herein) having an investment objective or strategy that islinked to the returns or portfolio of another specified Dynamic mutual fund whileremaining 100% eligible for registered plans (together with the Funds, the "RSPFunds") for a decision by each Decision Maker (the "Decision") pursuant to thesecurities legislation of the Jurisdictions (the "Legislation") that the followingprohibitions or requirements under the Legislation (the "Requirements") shall not applyin respect of certain investments to be made by the Funds and by other RSP Funds inthe Dynamic Health Sciences Fund, the Dynamic Global Technology Fund, and othercorresponding Dynamic mutual fund from time to time (collectively, the "UnderlyingFunds"):

A. the prohibition against a mutual fund knowingly making and holding aninvestment in a person or company in which the mutual fund, alone or togetherwith one or more related mutual funds, is a substantial securityholder; and

B. the requirement that a management company of a mutual fund file a reportrelating to the purchase or sale of securities between the mutual fund and anyrelated person or company, or any transaction in which, by arrangement otherthan an arrangement relating to insider trading in portfolio securities, the mutualfund is a joint participant with one or more of its related persons or companies.

AND WHEREAS pursuant to the Mutual Reliance Review System for ExemptiveRelief Applications (the "System"), the Ontario Securities Commission is the principalregulator for this Application;

AND WHEREAS Dynamic has represented to the Decision Makers that:

1. Dynamic is a corporation established under the laws of Ontario with its headoffice in Toronto, Ontario. Dynamic is the manager, trustee and promoter of theFunds and the Underlying Funds.

2. The RSP Funds will be open-end mutual fund trusts established under the lawsof Ontario and their units are or will be qualified for distribution in allJurisdictions under a simplified prospectus and annual information form (the"Prospectus").

3. The Underlying Funds are or will be open-end mutual fund trusts establishedunder the laws of Ontario and their units are or will be qualified for distribution inall Jurisdictions by means of a simplified prospectus and annual informationform.

4. The RSP Funds and the Underlying Funds are or will be reporting issuers underthe securities laws of each of the provinces and territories of Canada. None ofthe RSP Funds or Underlying Funds is in default of any requirements of theLegislation.

5. Each of the RSP Funds seeks to achieve its investment objective while ensuringthat securities of the RSP Fund do not constitute "foreign property for registeredretirement savings plans, registered retirement income funds, deferred profitsharing plans and similar plans ("Registered Plans").

6. To achieve its investment objective, each of the RSP Funds invests its assets insecurities such that its units will, in the opinion of tax counsel to the RSP Funds,be "qualified investments" for Registered Plans and will not constitute foreignproperty in a Registered Plan. This will primarily be achieved through theimplementation of a derivative strategy. However, the RSP Funds also intend toinvest a portion of their assets in securities of the Underlying Funds. Thisinvestment by the RSP Funds will at all times be below the maximum foreignproperty limit prescribed for Registered Plans (the "Permitted Limet").

7. The investment objective of the Underlying Funds are achieved throughinvestment primarily in foreign securities.

8. The direct investments by the RSP Funds in the Underlying Funds will be withinthe Permitted Limit. Dynamic and the RSP Funds will comply with the conditionsof this Decision in respect of such investments. The amount of direct investmentby each RSP Fund in its corresponding Underlying Fund will be adjusted fromtime to time so that, except for transitional cash, the aggregate of derivativeexposure to, and direct investment in, the Underlying Fund will equal 100% ofthe assets of the RSP Fund.

9. Except to the extent evidenced by this Decision and specific approvals grantedby the Canadian securities administrators pursuant to National Instrument 81-102 Mutual Funds ("NI 81-102"), the investments by the RSP Funds in theUnderlying Funds have been or will be structured to comply with the investmentrestrictions of the Legislation and NI 81-102.

10. In the absence of this Decision, pursuant to the Legislation, each of the RSPFunds is prohibited from

(a) knowingly making an investment in a person or company in which themutual fund, alone or together with one or more related mutual funds, is asubstantial securityholder; and

(b) knowingly holding an investment referred to in subsection (a) hereof. Asa result, in the absence of this Decision, an RSP Fund would be requiredto divest itself of any investments referred to in subsection (a) herein.

11. In the absence of this Decision, the Legislation requires Dynamic, as themanagement company of the Funds, to file a report on every purchase or sale ofsecurities of the Underlying Funds by the RSP Funds.

12. The purchase and sale of units of the Underlying Funds by the Funds representsthe business judgment of responsible persons, uninfluenced by considerationsother than the best interests of the RSP Funds.

AND WHEREAS pursuant to the System this Decision Document evidences thedecision of each Decision Maker;

AND WHEREAS each Decision Maker is satisfied that the test contained in theLegislation that provides the Decision Maker with the jurisdiction to make the Decisionhas been met;

THE DECISION of the Decision Makers pursuant to the Legislation is that theRequirements do not apply to the purchase and sale by the Funds of units of theUnderlying Funds;

PROVIDED THAT:

1. this Decision, as it relates to the jurisdiction of a Decision Maker, will terminateone year after the publication in final form of any legislation or rule of thatDecision Maker dealing with the matters in subsection 2.5 of NI 81-102; and

2. the Decision shall only apply in respect of investments in, or transactions with,the Underlying Funds that are made by the RSP Funds in compliance with thefollowing conditions:

a) the investment by each RSP Fund in its Underlying Fund is compatiblewith the fundamental investment objective of the RSP Fund;

b) the RSP Funds and the Underlying Funds are under commonmanagement and the Underlying Funds' securities are offered and willcontinue to be offered for sale in the Jurisdiction of the Decision Makerpursuant to a prospectus which has been filed with and accepted by theDecision Maker;

c) each RSP Fund restricts its aggregate direct investment in its UnderlyingFund to a percentage of its assets that is within the Permitted Limit;

d) the Prospectus of the RSP Funds describes the intent of the RSP Fundsto invest in their Underlying Funds;

e) each RSP Fund may change the Permitted RSP Fund Investment if itchanges its fundamental investment objective in accordance with NI 81-102;

f) there are compatible dates for the calculation of the net asset value of theRSP Funds and their Underlying Funds for the purpose of the issue andredemption of the securities of such mutual funds;

g) in the event of the provision of any notice to securityholders of anUnderlying Fund, as required by the constating documents of theUnderlying Fund or by the applicable laws, such notice will also bedelivered to the securityholders of its RSP Fund; all voting rightsattached to the securities of the Underlying Fund which are owned by itsRSP Fund will be passed through to the securityholders of the RSP Fund;

h) in the event that a meeting of securityholders' of an Underlying Fund iscalled, all of the disclosure and notice material prepared in connectionwith such meeting will be provided to the securityholders of its RSPFund; such securityholders will be entitled to direct a representative ofthe RSP Fund to vote the RSP Fund's holding in the Underlying Fund inaccordance with their direction; and the representative of the RSP Fundwill not be permitted to vote the RSP Fund's holding in the UnderlyingFund except to the extent the securityholders of the RSP Fund so direct;

i) no sales charges are payable by each of the RSP Funds in relation to itspurchases of securities of its Underlying Fund;

j) no redemption fees or other charges are charged by the UnderlyingFunds in respect of the redemption by the RSP Funds of securities of theUnderlying Funds owned by the RSP Funds;

k) no fees and charges of any sort are paid by each RSP Fund, itsUnderlying Fund, the manager or principal distributor of the RSP Funds orthe Underlying Funds, or by any affiliate or associate of any of theforegoing entities, to anyone in respect of each RSP Fund's purchase,holding or redemption of the securities of its Underlying Fund;

l) the arrangements between or in respect of the RSP Funds and theUnderlying Funds are such as to avoid the duplication of managementfees;

m) in addition to receiving the annual and, upon request, the semi-annualfinancial statements of the RSP Funds, securityholders of the RSP Fundswill receive the annual and, upon request, the semi-annual financialstatements of the Underlying Funds either in a combined reportcontaining both the RSP Funds' and Underlying Funds' financialstatements, or in a separate report containing the Underlying Funds'financial statements; and

n) to the extent that the RSP Funds and the Underlying Funds do not use acombined simplified prospectus, annual information form and financialstatements containing disclosure about the RSP Funds and theUnderlying Funds, copies of the simplified prospectus, annual informationform and financial statements relating to the Underlying Funds may beobtained upon request by a securityholder of the RSP Funds.

October 17th, 2000.

"J. A. Geller"      "J. F. Howard"