CI Investments Inc. et al. - MRRS Decision

Headnote

Mutual Reliance Review System for Exemptive Relief Applications -- Exemptive relief granted to allow new mutual funds to be created pursuant to conversions, to use Start Date and Financial Data of predecessor funds for the purposes of Items 5(b), 8, 11, and 13 of Part B of Form 81-101F1 and for the purposes of Part 15 of National Instrument 81-102.

Exemptive relief also granted from the prohibitions in section 3.1 and section 3.2 of National Instrument 81-102 in respect of the $150,000 seed money required when establishing a new mutual fund.

Rules Cited

National Instrument 81-102 - Mutual Funds, ss. 3.1, 3.2, 9.1, and Part 15.

September 28, 2005

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

BRITISH COLUMBIA, ALBERTA, SASKATCHEWAN,

MANITOBA, ONTARIO, QUÉBEC, NEW BRUNSWICK,

NOVA SCOTIA, PRINCE EDWARD ISLAND,

NEWFOUNDLAND AND LABRADOR, YUKON,

NORTHWEST TERRITORIES AND NUNAVUT TERRITORY

(the Jurisdictions)

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEW SYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

CI INVESTMENTS INC.

AND

SYNERGY CANADIAN STYLE MANAGEMENT CORPORATE CLASS,

SYNERGY CANADIAN EQUITY CORPORATE CLASS, AND

SIGNATURE CANADIAN SMALL CAP CORPORATE CLASS

(collectively, the "Funds")

MRRS DECISION DOCUMENT

Background

The local securities regulatory authority or regulator (the Decision Maker) in each of the Jurisdictions has received an application from CI Investments Inc. (CI or the Filer), the manager of the Funds for a decision under the securities legislation of the Jurisdictions (the Legislation):

1. providing that for the purposes of:

(a) Items 5(b) (Date the mutual fund was started), 8 (Top Ten Holdings), 11 (Past Performance) and 13 (Financial Highlights) of Part B of Form 81-101F1, and

(b) Section 15 (Sales Communications and Prohibited Representations) of National Instrument 81-102 ("NI 81-102") ,

the date which is considered to be:

(c) the inception of the mutual fund,

(d) the time when the mutual fund first offered its securities under a prospectus, and

(e) the date the mutual fund was started

(collectively, the "Start Date") of each class of shares of CI Corporate Class Limited ("CI Corporate") referred to below under the heading "Replacement Class" (each, a "Replacement Class") shall be the Start Date of the series of shares of Synergy Canadian Fund Inc. ("Synergy Canadian") identified below under the heading "Existing Series" (each, an "Existing Series") opposite the name of such Replacement Class:

and that the Financial Data (as defined below) of each Replacement Class may incorporate the Financial Data of its corresponding Existing Series; and

2. exempting the Manager from the requirements set out in Section 3.1 and the prohibition in Section 3.2 of NI 81-102 in respect of the $150,000 seed money required when establishing a new mutual fund

(collectively, the Requested Relief).

Under the Mutual Reliance Review System for Exemptive Relief Applications

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

(b) this MRRS decision document evidences the decision of each Decision Maker.

Interpretation

Defined terms contained in National Instrument 14-101 Definitions have the same meaning in this decision unless they are defined in this decision.

Representations

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

1. Synergy Canadian is a mutual fund corporation subsisting under the laws of the Province of Ontario. Synergy Canadian offers multiple mutual funds to the public, using a multiple class structure, pursuant to a simplified prospectus and annual information form dated June 20, 2005, as amended from time to time, (collectively, the "Current Synergy Prospectus"). Three such mutual funds are the Synergy Canadian Style Management Class, Synergy Canadian Class and Signature Canadian Small Cap Class (collectively, the "Synergy Funds") of Synergy Canadian. The principal advantage to investors of the multiple class structure of Synergy Canadian is the ability of taxable investors to switch their investments between different mutual funds within Synergy Canadian on a tax-deferred basis. For purposes of NI 81-102, the Manager is considered to be the manager of each mutual fund within Synergy Canadian, including the Synergy Funds.

2. Each Synergy Fund offers three Existing Series of shares designated as A, F and I which are referable to the same portfolio of securities held by the Synergy Fund. Synergy Canadian Class also offers a fourth Existing Series of shares, Insight shares. The principal difference between the different Existing Series of the same Synergy Fund relates to the allocation of expenses (primarily management fees) attributable to each Existing Series.

3. In order to provide investors in the Synergy Funds with a broader choice of mutual funds into which they may switch their assets on a tax-deferred basis, the Manager intends to convert each Synergy Fund into its corresponding Fund on a tax-deferred basis (collectively, the "Conversions"). Each Fund will be comprised of three or more classes of shares (i.e. certain Replacement Classes) of CI Corporate referable to the same portfolio of securities. Similar to Synergy Canadian, CI Corporate offers multiple mutual funds to the public using a multiple class structure. For purposes of NI 81-102, the Manager is considered to be the manager of each mutual fund within CI Corporate, including the Funds. CI Corporate currently offers to its shareholders the ability to switch between any of 42 mutual funds on a tax-deferred basis.

4. The Conversions of the Synergy Funds into the Funds are expected to be effected through an amalgamation involving Synergy Canadian and CI Corporate. Pursuant to the amalgamation, investors in each Existing Series of a Synergy Fund will receive shares of its corresponding Replacement Class in its Fund on a dollar-for-dollar basis. Shares of the Funds will not be available to new investors until after the Conversions have been completed.

5. The Conversions of the Synergy Funds into the Funds is subject to any necessary securityholder and regulatory approvals. Shareholders of Synergy Canadian will be asked to approve the amalgamation involving Synergy Canadian and CI Corporate at a special meeting of securityholders which has been tentatively scheduled for the second half of November, 2005.

6. Each Fund will be newly created for purposes of implementing the Conversions. Subject to receipt of the relief requested from Sections 3.1 and 3.2 of NI 81-102, the Funds will not have any assets or liabilities. In addition, the Funds will not have their own past performance data on the date the Conversions are implemented. In order to render the Conversion "seamless" for existing investors in the Synergy Funds, the investment objectives, investment strategies, management fees and administrative fees for each Fund will be identical to those of its corresponding Synergy Fund.

7. The Manager anticipates that the rate of return of each Replacement Class of a Fund will be the same as the Existing Series of the Synergy Fund it will replace.

8. The Manager has filed a preliminary simplified prospectus and annual information form dated August 5, 2005 (collectively, the "Prospectus") in respect of the Replacement Classes of the Funds. The Prospectus has been prepared on the basis that the relief requested herein will be granted. Accordingly, in the Prospectus:

(a) the Start Date for each Replacement Class is based upon the Start Date of its corresponding Existing Series; and

(b) information derived from the annual financial statements and performance data (as defined in NI 81-102) (collectively, the "Financial Data") of each Replacement Class (including, without limitation, the information prescribed by Items 8, 11 and 13 of Part B of Form 81-101F1) incorporates the Financial Data of its corresponding Existing Series.

9. The Synergy Funds will continue to distribute the Existing Series to the public pursuant to the Current Synergy Prospectus until the Conversions are implemented. If the Conversions are approved and implemented, then by operation of the amalgamation:

(a) the Synergy Funds will cease to exist;

(b) the assets of each Synergy Fund will become assets of its corresponding Fund; and

(c) each holder of an Existing Series of shares will receive shares of an equivalent value of its Replacement Class.

The Funds will not commence distributing their Replacement Classes pursuant to the Prospectus until after the Conversions are approved and implemented.

10. The Financial Data of each Existing Series is significant information which can assist investors in determining whether to purchase shares of a Replacement Class. In the absence of the Requested Relief, investors will have no Financial Data (such as past performance) on which to base such an investment decision.

Decision

Each of the Decision Makers is satisfied that the test contained in the Legislation that provides the Decision Maker with the jurisdiction to make the Decision has been met.

The decision of the Decision Makers under the Legislation is that the Requested Relief is granted.