NexGen Financial Limited Partnership et al.

Headnote

NP 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Approval of mutual fund mergers -- approval required because mergers do not meet the criteria for pre-approval -- The continuing fund does not have substantially similar fundamental investment objective as compared to that of the terminating funds -- Terminating funds' unitholders provided with timely and adequate disclosure regarding the merger and prospectus-level disclosure regarding the continuing fund.

Applicable Legislative Provisions

National Instrument 81-102 Mutual Funds, ss. 5.5(1)(b), 5.6(1)(a).

April 14, 2011

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

THE PROVINCE OF ONTARIO

(the Jurisdiction)

AND

IN THE MATTER OF THE

PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

NEXGEN FINANCIAL LIMITED PARTNERSHIP

(the Filer)

AND

NEXGEN AMERICAN GROWTH REGISTERED FUND

NEXGEN NORTH AMERICAN VALUE REGISTERED FUND

NEXGEN GLOBAL DIVIDEND REGISTERED FUND

(collectively, the Terminating Funds)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filer on behalf of the Terminating Funds for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) for approval of the merger (the Merger) of each Terminating Fund into NexGen Canadian Balanced Growth Registered Fund (the Continuing Fund) (together with the Terminating Funds, the Funds) under paragraph 5.5(1)(b) of National Instrument 81-102Mutual Funds (NI 81-102) (the Exemption Sought).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):

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

(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, Quebec, Newfoundland and Labrador and Northwest Territories (including 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

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

1. The Filer is a limited partnership established under the laws of the Province of Ontario and its head office is located in Toronto, Ontario.

2. The Filer is registered as a dealer in the category of mutual fund dealer, as an adviser in the category of portfolio manager and as an investment fund manager under theSecurities Act (Ontario) and as an adviser in the category of commodity trading manager under the Commodity Futures Act (Ontario).

3. The Filer is the manager of each of the Funds and is not in default of securities legislation in any province or territory of Canada.

4. The Filer is the portfolio manager of each of the Funds.

5. The Funds are open-end mutual funds established under the laws of the Province of Ontario, and the Terminating Funds and the Continuing Fund form part of 18 registered funds, each established by a master declaration of trust.

6. Units of the Funds are currently offered for sale under a simplified prospectus and annual information form dated May 25, 2010 in the Jurisdictions. Each of the Funds follows the standard investment restrictions and practices established under the Legislation.

7. The Funds are reporting issuers under the applicable securities legislation of the Jurisdictions and are not in default of securities legislation in any province or territory of Canada.

8. The board of directors of NexGen Limited, the general partner of the Filer, approved the Merger on March 3, 2011 and a press release and material change report in respect of the Merger were filed on SEDAR on March 14, 2011.

9. As required by National Instrument 81-107 Independent Review Committee for Investment Funds, NexGen Limited presented the terms of the Merger to the Funds' Independent Review Committee (the IRC) for its review and recommendation. The IRC reviewed the potential conflict of interest matters related to the proposed Merger and, on February 14, 2011, the IRC determined that the proposed Merger, if implemented, would achieve a fair and reasonable result for each of the Funds.

10. Unitholders of the Terminating Funds will continue to have the right to redeem or transfer their units of a Terminating Fund at any time up to the close of business on the business day prior to the effective date of the Merger.

11. A meeting of the unitholders of each Terminating Fund was held on March 29, 2011 to approve the proposed Merger.

12. Subsection 5.6(1)(f) of NI 81-102 requires that certain materials be sent to the Terminating Funds' unitholders in connection with their approval of the Merger. The Manager has sent to unitholders of each Terminating Fund, a notice of the meeting of unitholders and a Management Information Circular (the Information Circular) dated February 17, 2011, the current simplified prospectus, and a related form of proxy. The Information Circular provides sufficient information to unitholders to permit them to make an informed decision about the Merger. The Information Circular sent to unitholders prominently discloses that they can obtain the most recent interim and annual financial statements of the Continuing Fund by accessing the SEDAR website at www.sedar.com or the Filer's website at www.nexgenfinancial.ca, by calling the Filer's toll free telephone number 1-866-378-7119, or by contacting their dealer.

13. It is proposed that the Merger take place on or about May 6, 2011.

14. The Manager will pay all costs and reasonable expenses relating to the solicitation of proxies, holding the unitholder meetings in connection with the Merger and the costs of implementing the Merger, including any brokerage fees.

15. Following the Merger, the Continuing Fund will continue as a publicly offered open-end mutual fund and the Terminating Funds will be wound up.

16. The Merger is conditional on the approval of (i) the unitholders of the Terminating Funds, (ii) the shareholders of certain NexGen tax managed funds (the counterpart funds to the Terminating Funds) and (iii) the Principal Regulator. The unitholders of the Terminating Funds as well as the shareholders of the NexGen tax managed funds referenced above have approved the Merger.

17. If the necessary approvals are obtained, the following steps will be carried out to effect the Merger:

a. Applicable documentation of the Terminating Funds will be amended to facilitate the Merger. Among other changes, the investment objective of each of the Terminating Funds will be amended to facilitate the Merger.

b. A Terminating Fund will transfer all of its assets which will consist of cash , less an amount required to satisfy the liabilities of the Terminating Fund, to the Continuing Fund in exchange for units of the Continuing Fund. The unit exchange will be effected on the basis of the relative net asset values of the applicable units at the close of business on the closing of the Merger (the "Valuation Time") in accordance with the formula set out below

Fund Units
No. of Continuing Fund units	=	Net Asset Value of Terminating Fund
to be received		Units at the Valuation Time
		_________________________
		Net Asset Value of Continuing Fund
		Units at the Valuation Time

c. Each Unitholder of a Fund will receive the corresponding units of the Continuing Fund.

d. Each of the Terminating Funds will distribute to its unitholders sufficient net income and net realized capital gains so that it will not be subject to tax under the Income Tax Act (Canada) for its current taxation year.

e. A Terminating Fund will distribute to its unitholders the units of the Continuing Fund received by it in exchange for all of the unitholders' existing units of the Terminating Fund on a series-by-series and dollar-for-dollar basis so that following the distribution the unitholders of the Terminating Fund will become direct unitholders of the Continuing Fund.

f. Each of the Terminating Funds will then be wound up.

18. The Continuing Fund is, and is expected to continue to be at all material times, a mutual fund trust under theIncome Tax Act (Canada) (the "Tax Act") and, accordingly, units of the Continuing Fund are "qualified investments" under the Tax Act for registered retirement savings plans, registered retirement income funds, deferred profit sharing plans, registered education savings plans, registered disability savings plans and tax free savings accounts.

19. Approval of the Merger is required because the Merger does not satisfy all of the criteria for pre-approved reorganizations and transfers set out in section 5.6 of NI 81-102 because, contrary to section 5.6(1)(a)(ii) of NI 81-102, a reasonable person may consider the fundamental investment objectives of the Continuing Fund not to be substantially similar to the fundamental investment objectives of each Terminating Fund.

20. In the opinion of the Filer, the Merger will be beneficial to securityholders of the Terminating Fund and those in the Continuing Fund for the following reasons:

a. unitholders in the Continuing Fund are expected to enjoy improved economies of scale and potentially lower proportionate fund operating expenses (which are borne indirectly by unitholders) as part of a larger combined Continuing Fund;

b. due to the smaller size and historic growth profile of the Terminating Funds, the administrative and regulatory costs of operating the Terminating Funds as stand-alone mutual funds would be higher per unitholder and could potentially increase if the Terminating Funds decrease further in asset size;

c. the Merger transitions unitholders in the Terminating Funds to a growing and more viable Continuing Fund; and

d. generally, the historical rate of return for the Continuing Fund has been higher and more consistent than the historical rate of return for the Terminating Funds with which it is proposed to be merged.

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.