Goodman & Company, Investment Counsel Ltd. and Dynamic Energy Income Fund

Headnote

National Policy 11-203 Process For Exemptive Relief Applications in Multiple Jurisdictions -- exemption granted from unitholder approval requirement contained in s. 5.1(a) of NI 81-102 -- exemption required because fund to change the index that it uses as a benchmark for calculation of performance fee due to termination of the previous index -- new index will perform substantially similar to old index -- change will not result in a material increase, if any, to the fee paid by the fund.

Applicable Legislative Provisions

National Instrument 81-102 Mutual Funds, ss. 5.1(a), 19.1.

May 19, 2011

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO

(the "Jurisdiction")

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

GOODMAN & COMPANY,

INVESTMENT COUNSEL LTD.

(the "Filer")

AND

DYNAMIC ENERGY INCOME FUND

(the "Fund")

DECISION

Background

The principal regulator in the Jurisdiction (the "Principal Regulator") has received an application from the Filer on behalf of the Fund for a decision under the securities legislation of the Jurisdiction of the Principal Regulator (the "Legislation") granting an exemption pursuant to Section 19.1 of National Instrument 81-102 Mutual Funds ("NI 81-102") from the requirement in Section 5.1(a) of NI 81-102 to obtain the prior approval of the unitholders of the Fund to replace the benchmark utilized for calculating the performance fee (the "Fee") charged to the Fund from the S&P/TSX Capped Energy Trust Index (the "Original Index") to the S&P/TSX Capped Energy Index (the "New Index") (collectively, 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, 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 the provinces and territories of Canada other than Ontario.

Interpretation

Defined terms contained in National Instrument 14-101 Definitions and MI 11-102 have the same meanings in this decision unless they are otherwise defined in this decision.

Representations

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

1. The Filer is a corporation incorporated under the laws of Ontario and has its head office in Toronto. The Filer is not in default of securities legislation in any Jurisdiction.

2. The Filer is registered as an advisor in all provinces of Canada except Prince Edward Island and Newfoundland and Labrador. The Filer is also registered as a commodity trading manager in Ontario and has applied for registration as an investment fund manager.

3. The Filer has established and is the manager of the Fund.

4. The Fund is a reporting issuer (or the equivalent) under the securities legislation of each Jurisdiction and is not in default of any requirements of such securities legislation. Units of the Fund are offered for sale on a continuous basis in each Jurisdiction pursuant to a simplified prospectus dated December 14, 2010, as amended (the "Prospectus").

5. The Filer is entitled to receive the Fee, which is calculated by comparing the performance of the Fund to the performance of the Original Index, as described below.

6. The Fee is equal to the average of the month-end net asset value of the Fund (excluding the net asset value of Series FP, Series I, Series IP, Series IT, Series O, Series OP and Series P securities) during the calendar year multiplied by 10% of the difference between the lesser of:

(a) the percentage increase or decrease in the net asset value of a Series A security of the Fund (without giving effect to any distributions or performance fee accrual) and the percentage increase or decrease in the Original Index since the end of the period for which the last performance fee was paid, and

(b) the percentage increase or decrease in the net asset value of a Series A security of the Fund (without giving effect to any distributions or performance fee accrual) in the calendar year and the percentage increase or decrease in the Original Index in the same calendar year.

The Fee is calculated to a maximum percentage, currently set at 2.00% of the average of the month-end net asset value of the Fund (excluding the net asset value of Series FP, Series I, Series IP, Series IT, Series O, Series OP and Series P securities) during the calendar year. The Fee is estimated and accrued daily and calculated at calendar year-end using such average month-end net asset values. For the calculation in (b) above, where the Fee calculated is negative, the amount is carried forward to reduce the Fee in future years.

7. Following the conversion of most income trusts to corporations at the end of 2010, the Original Index was reduced to only one constituent as of the close of business on January 21, 2011. In light of this development, Standard & Poor's Canadian Index Services announced by news release on March 2, 2011 that calculation of the Original Index would cease after the close of Friday, March 18, 2011. Calculation of the Original Index was ceased after the close of Friday, March 18, 2011.

8. As a result, the Filer proposes to replace the Original Index with the New Index, effective as of January 1, 2011.

9. Effective January 1, 2011, the Filer proposes to calculate the Fee by comparing the performance of the Fund to the New Index.

10. The Filer believes the New Index reasonably reflects the energy sector in which the Fund invests its assets and considers the New Index to be appropriate given the investment objective and investment strategies of the Fund. All but two of the constituents that were removed from the Original Index since the end of 2010 are currently constituents of the New Index. Moreover, issuers that were formerly on the Original Index comprise approximately 25% of the overall value of the New Index as of March 21, 2011.

11. The Filer believes that the New Index is a reasonable substitute for the Original Index and, of all alternative indices explored by the Filer, most closely reflects the range of energy sector investments in which the Fund may invest its assets. The Filer expects the New Index to have performance that is substantially similar to the Original Index. The Filer believes that the proposed change will not result in a material increase, if any, to the Fee paid by the Fund.

12. An amendment to the Prospectus will be filed to disclose the change from the Original Index to the New Index and, following issuance of a receipt for such amendment, all subsequent purchasers of securities of the Fund will receive notice of the change of index. The replacement of the Original Index with the New Index will also be described in the Fund's management report of fund performance for the year ended June 30, 2011. Accordingly, all existing securityholders of the Fund who receive management reports of fund performance will receive notice of the replacement of the Original Index.

13. The Filer will provide a notification of the change from the Original Index to the New Index in its next general mailing to unitholders of the Fund.

14. The costs associated with convening a meeting of unitholders to approve the change from the Original Index to the New Index would significantly outweigh any benefits associated with soliciting the approval of the unitholders of the Fund concerning this change.

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.