Fiera Sceptre Inc.

Headnote

Policy Statement 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- relief granted from the self-dealing provisions in section 4.2 of Regulation 81-102 Mutual Funds to permit inter-fund trades in debt securities between mutual funds, closed-end funds and pooled funds managed by the same manager or an affiliate of the same manager -- inter-fund trades will comply with conditions in subsection 6.1(2) of Regulation 81-107 Independent Review Committee for Investment Funds, including the requirement of independent review committee approval.

Applicable Legislative Provisions

Regulation 81-102 Mutual Funds, ss. 4.2(1), 4.3, 19.1.

Regulation 81-107 Independent Review Committee for Investment Funds, s. 6.1(2).

[Translation]

April 14, 2011

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

QUÉBEC AND ONTARIO

(the Jurisdictions)

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATION IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

THE MUTUAL FUNDS

(as defined below)

AND

IN THE MATTER OF

FIERA SCEPTRE INC.

(the Filer)

DECISION

Background

The securities regulatory authority or regulator in each of the Jurisdictions (Decision Maker) has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the Legislation) granting existing or future mutual funds to which the Regulation 81-102 respecting Mutual Funds (Regulation 81-102) applies, for which the Filer or an affiliate of the same group is the investment fund manager (collectively, the Mutual Funds), an exemption from the prohibition contained in section 4.2(1) of Regulation 81-102 to permit the Mutual Funds to purchase, or sell, debt securities from or to:

1. an existing or future Mutual Fund, for which the Filer or an affiliate of the same group is the investment fund manager, and to which Regulation 81-102 and Regulation 81-107 respecting Independent Review Committee for Investment Funds (Regulation 81-107) do not apply (collectively, the Pooled Funds); or

2. an existing or future investment fund, for which the Filer or an affiliate of the same group is the investment fund manager, and to which Regulation 81-107 applies, and Regulation 81-102 does not apply (collectively, the Closed-End Funds),

(collectively, the Requested Relief),

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 the application herein;

(b) the Filer has provided notice that section 4.7(1) of Regulation 11-102 Passport System (Regulation 11-102) is intended to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, Yukon, Northwest Territories and Nunavut; 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 Regulation 11-102, Regulation 14-101 respecting Definitions, Regulation 81-102 or Regulation 81-107 have the same respective meanings if used in this decision, unless otherwise defined herein.

The Mutual Funds, the Pooled Funds and the Closed-End Funds are collectively hereinafter referred to as the Funds.

Representations

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

1. The Filer is a corporation incorporated under the Business Corporations Act (Ontario). Although the registered office of the Filer is located in Toronto, Ontario, its head office is located in Montreal, Québec.

2. The Filer is registered in:

(a) Québec as an investment fund manager, an exempt market dealer, a portfolio manager and a derivatives portfolio manager;

(b) Ontario as an investment fund manager, an exempt market dealer, a portfolio manager and a commodity trading manager; and

(c) each of the other provinces and territories of Canada as an exempt market dealer and a portfolio manager.

3. The Filer or an affiliate of the same group can act as a portfolio manager to the Funds.

4. Each Fund may be an associate of a responsible person of the Filer or affiliate of the investment fund manager, the portfolio manager or the Trustee of a Mutual Fund.

5. Each Fund is or will be an investment fund created through a trust or corporation governed by the laws of Canada or of a province or territory of Canada.

6. The purpose of the Requested Relief is to enable the Mutual Funds to purchase or sale debt securities (the Inter-Fund Trades) with Pooled Funds and Closed-End Funds.

7. Each Mutual Fund and Closed-End Fund is, or will be, a reporting issuer under the securities legislation of one or more Jurisdictions.

8. Each Pooled Fund is not, and will not be, a reporting issuer under the securities legislation of any Jurisdiction.

9. Securities of the Pooled Funds are, or will be, distributed to investors in one or more of the Jurisdictions pursuant to exemptions from the prospectus requirements in accordance with Regulation 45-106 respecting Prospectus and Registration Exemptions.

10. Neither the Filer, nor the existing Funds are in default of securities legislation in any of the Jurisdictions.

11. Since the Pooled Funds are not subject to Regulation 81-107 and the Closed-End Funds are not subject to Regulation 81-102, the Filer cannot benefit from the statutory exemption provided in section 4.3(2) of Regulation 81-102.

12. At the time of each Inter-Fund Trade, the Filer will have in place policies and procedures to enable the Mutual Funds to engage in Inter-Fund Trades with the Pooled Funds or the Closed-End Funds.

13. Each Inter-Fund Trade to which a Mutual Fund or a Closed-End Fund is a party will be referred to the independent review committee (the IRC) of such Fund in accordance with section 5.2(1) of Regulation 81-107 and the investment fund manager of such Fund will comply with section 5.4 of Regulation 81-107 in respect of any standing instructions the IRC provides in connection with the Inter-Fund Trade.

14. Though the Pooled Funds are not subject to the requirements of Regulation 81-107, each Pooled Fund will have an IRC at the time of each Inter-Fund Trade to which the Pooled Fund is a party. The IRC of the Pooled Fund will be comprised in accordance with section 3.7 of Regulation 81-107 and will be expected to comply with the standard of care set out in section 3.9 of Regulation 81-107. The mandate of the IRC of a Pooled Fund will include approving Inter-Fund Trades to which the Pooled Fund is a party. The IRC of a Pooled Fund will not approve an Inter-Fund Trade to which the Pooled Fund is a party unless the IRC of the Pooled Fund has made the determination in the same manner as set out in section 5.2(2) of Regulation 81-107.

15. Each Inter-Fund Trade will be consistent with the investment objective of the Mutual Fund.

16. An Inter-Fund Trade will be implemented by the Filer, or an affiliate of the same group, on behalf of the applicable Mutual Fund as follows:

(a) the Filer, or an affiliate of the same group, as portfolio manager, will deliver the trade instructions in respect of a purchase or sale of a debt security by the applicable Mutual Fund to a trader on a trading desk with a registered dealer;

(b) the Filer, or an affiliate of the same group, as portfolio manager, will deliver the trade instructions in respect of a sale or purchase of a debt security by another Fund to a trader on a trading desk with a registered dealer;

(c) the trader will be required to execute the trade on a timely basis as an Inter-Fund Trade between the applicable Funds in accordance with the requirements of paragraphs (c) to (g) of subsection 6.1(2) of Regulation 81-107; and

(d) the trader will inform the Filer, or an affiliate of the same group, of the price at which the Inter-Fund Trade occurred.

Decision

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

The decision of the Decision Maker under the Legislation is that the Requested Relief is granted provided that:

(a) the Inter-Fund Trade is consistent with the investment objective of all the Funds involved in the trade;

(b) the IRC of each Fund that is a party to an Inter-Fund Trade has approved the Inter-Fund Trade in accordance with the terms of section 5.2(2) of Regulation 81-107; and

(c) the Inter-Fund Trade will comply with paragraphs (c) to (g) of subsection 6.1(2) of Regulation 81-107.