Securities Law & Instruments

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Relief granted from restrictions and requirements in subsection 2.1(1) and paragraphs 2.2(1)(a), 2.5(2)(a) and 2.5(2)(c) of National Instrument 81-102 -- Mutual Funds. Exemption will permit certain mutual funds to continue their investment in securities of certain related underlying funds after these underlying funds cease to offer their securities under a simplified prospectus -- Underlying funds will remain reporting issuers in the same jurisdictions as the top mutual funds after their prospectuses lapse and will continue to be subject to the requirements of NI 81-102, NI 81-106 and NI 81-107.

Applicable Legislative Provisions

National Instrument 81-102 Mutual Funds, ss. 2.1(1), 2.2(1)(a), 2.5(2)(a), 2.5(2)(c), 19.1.

June 30, 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

MACKENZIE FINANCIAL CORPORATION

("MACKENZIE or FILER")

AND

IN THE MATTER OF

THE FUNDS AND THE SHORT-TERM YIELD FUNDS

(as each is defined below)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from Mackenzie on behalf of:

(a) each of the mutual funds, other than the Underlying Funds and Short-Term Yield Funds (as each is defined below), of which the Filer is, or in the future becomes, the manager and to which National Instrument 81-102 -- Mutual Funds ("NI 81-102") applies (the "Funds"); and

(b) Mackenzie Sentinel Canadian Short-Term Yield Corporate Class and Mackenzie Sentinel U.S. Short-Term Yield Corporate Class (the "Short-Term Yield Funds");

for a decision under the securities legislation of the Jurisdiction of the principal regulator (the "Legislation") exempting:

(a) the Funds from the requirements of subsection 2.1(1), 2.2(1)(a), 2.5(2)(a) and 2.5(2)(c) of NI 81-102 to permit each Fund to (i) invest in securities of any of Mackenzie Universal Canadian Resource Class, Quadrus Fixed Income Fund, Symmetry Equity Corporate Class, Symmetry Fixed Income Corporate Class, Mackenzie Sentinel Canadian Money Market Fund, and Mackenzie Sentinel U.S. Money Market Fund (the "Underlying Funds") and the Short-Term Yield Funds and/or (ii) maintain positions in specified derivatives for which the underlying interest is securities of an Underlying Fund or of a Short-Term Yield Fund;

and

(b) the Short-Term Yield Funds from the requirements of subsection 2.1(1), 2.2(1)(a), 2.5(2)(a) and 2.5(2)(c) of NI 81-102 to permit each Short-Term Yield Fund to (i) invest in securities of Mackenzie Sentinel Canadian Money Market Fund and/or Mackenzie Sentinel U.S. Money Market Fund (the "Money Market Underlying Funds") and/or (ii) maintain positions in specified derivatives for which the underlying interest is securities of a Money Market Underlying Fund,

after an Underlying Fund or Short-Term Yield Fund ceases to distribute securities under a prospectus but otherwise remains a reporting issuer (the "Requested Relief").

In conjunction with the Requested Relief, Mackenzie seeks the revocation of the decision document granted by the Principal Regulator on October 4, 2010 (the "Previous Decision").

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions:

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

(b) Mackenzie 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 respect of the Requested Relief in British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick, Nova Scotia, Newfoundland and Labrador, Prince Edward Island, Northwest Territories, Nunavut and Yukon.

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

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

1. Mackenzie is a corporation governed by the laws of Ontario and is registered as a Portfolio Manager and Exempt Market Dealer in each Canadian jurisdiction and has applied for registration in Ontario as an Investment Fund Manager. Mackenzie is also registered in Ontario under the Commodity Futures Act (Ontario) in the category of Commodity Trading Manager.

2. The Ontario Securities Commission is the principal regulator to review and grant the Requested Relief as the head office of the Filer is in the Province of Ontario.

3. Each of the Funds, Short-Term Yield Funds, and Underlying Funds is, or in the case of a Fund, will be, a mutual fund to which NI 81-102, National Instrument 81-106 -- Investment Fund Continuous Disclosure ("NI 81-106") and National Instrument 81-107 -- Independent Review Committee for Investment Funds ("NI 81-107" and, together with NI 81-102 and NI 81-106, the "Mutual Fund Instruments") applies.

4. Each Fund's and each Short-Term Yield Fund's investment objectives and/or strategies permit each Fund and each Short-Term Yield Fund to invest, directly and/or indirectly, in securities. Each Fund's and each Short-Term Yield Fund's investment objectives and/or strategies also permit each Fund and each Short-Term Yield Fund to make such investments:

(a) directly, by purchasing and holding such securities; and/or

(b) indirectly, through investments in other mutual funds and/or specified derivatives for which the underlying interest is securities of another mutual fund.

5. Each Short-Term Yield Fund invests directly or indirectly in securities issued by Underlying Funds that are money market funds. Each Fund that invests in a Short-Term Yield Fund is permitted to invest directly or indirectly in securities issued by the Short-Term Yield Funds pursuant to Section 2.5(4)(b)(i) of NI 81-102.

6. A Fund or Short-Term Yield Fund will hold securities of an Underlying Fund or maintain a position in a specified derivative for which the underlying interest is securities of an Underlying Fund, only if such investment is permitted by, and consistent with, the investment objective and/or strategies of the Fund or Short-Term Yield Fund.

7. The securities of each Fund are, or will be, qualified for distribution in some or all of the provinces and territories of Canada pursuant to simplified prospectuses and annual information forms that have been, or will be, prepared and filed in accordance with National Instrument 81-101 -- Mutual Fund Distributions ("NI 81-101"). Each Fund is a reporting issuer in each of the provinces and territories of Canada.

8. The securities of each Short-Term Yield Fund and Underlying Fund were or are qualified for distribution pursuant to simplified prospectuses and annual information forms prepared and filed in accordance with NI 81-101. Each Short-Term Yield Fund and Underlying Fund is a reporting issuer in each of the provinces and territories of Canada.

9. Mackenzie has been granted similar relief in respect of certain of the Underlying Funds in the form of the Previous Decision. This Decision applies in respect of all Underlying Funds and Short-Term Yield Funds.

10. The Underlying Funds and the Short-Term Yield Funds have not renewed, or do not intend to renew, their prospectus after their respective prospectus lapse date.

11. After the lapse date of the prospectus of the Underlying Funds and the Short-Term Yield Funds:

(a) each Short-Term Yield Fund will remain a reporting issuer in each jurisdiction in which the Funds that directly or indirectly invest in that Short-Term Yield Fund are reporting issuers, and accordingly, each Short-Term Yield Fund will remain subject to all of the requirements of the Mutual Fund Instruments; and

(b) each Underlying Fund will remain a reporting issuer in each jurisdiction in which the Short-Term Yield Funds or Funds that directly or indirectly invest in that Underlying Fund are reporting issuers, and accordingly, each Underlying Fund will remain subject to all of the requirements of the Mutual Fund Instruments.

12. A Fund and a Short-Term Yield Fund will not invest, or maintain an investment, directly or indirectly, in securities of an Underlying Fund if the Underlying Fund ceases to be a reporting issuer in any jurisdiction in which that Fund or Short-Term Yield Fund is a reporting issuer.

13. A Fund will not invest, or maintain an investment, directly or indirectly, in securities of a Short-Term Yield Fund if the Short-Term Yield Fund ceases to be a reporting issuer in any jurisdiction in which that Fund is a reporting issuer.

14. The Filer believes that it would be advantageous to each Fund and each Short-Term Yield Fund and each of their securityholders to be able to obtain exposure to the investments of the Underlying Funds or the Short-Term Yield Funds by investing, directly or indirectly, in securities of the Underlying Funds or the Short-Term Yield Funds, as applicable. It would be administratively inefficient, unfeasible, or costly for each Fund and each Short-Term Yield Fund to directly invest in the securities held by the Underlying Funds or Short-Term Yield Funds.

15. Mackenzie, the Funds, the Short-Term Yield Funds, and the Underlying Funds are not in default of securities legislation in any of the provinces and territories of Canada.

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:

(a) the Requested Relief is granted to each Fund provided that the Underlying Funds and/or the Short-Term Yield Funds in which it invests remain reporting issuers that are subject to the Mutual Fund Instruments in all jurisdictions in which the Fund is a reporting issuer;

(b) the Requested Relief is granted to each Short-Term Yield Fund provided that each Short-Term Yield Fund and the Money Market Underlying Funds in which it invests remain reporting issuers that are subject to the Mutual Fund Instruments in all jurisdictions in which the Short-Term Yield Fund is a reporting issuer; and

(c) the Previous Decision is revoked.

"Darren McKall"
Manager, Investment Funds Branch
Ontario Securities Commission
SEDAR No. 1742443