IA Clarington Investment Inc. et al.

Headnote

Policy Statement 11-203 respecting Process for Exemptive Relief Applications in Multipl Jurisdictions -- Approval of mutual fund transfer of assets -- Approval Required because transfer of assets do not meet the criteria for pre-approved reorganizations and transfers in Regulation 81-102 -- Continuing Fund have different investment objectives than Terminating Fund, transfer of assets not a "qualifying exchange" or a tax-deferred transaction under Income Tax Act -- securityholders of Terminating Fund provided with timely and adequate disclosure regarding the transfer of assets.

Applicable Legislative Provisions

Regulation 81-102 Mutual Funds, ss. 5.5(1)(b), 5.6.

June 22, 2012

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

QUEBEC AND ONTARIO

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTION

AND

IN THE MATTER OF

IA CLARINGTON INVESTMENT INC.

(the Filer)

AND

IN THE MATTER OF

IA CLARINGTON GLOBAL SMALL CAP FUND

(the Terminating Fund)

AND

IN THE MATTER OF

IA CLARINGTON GLOBAL OPPORTUNITIES FUND

(the Continuing Fund)

DECISION

Background

The securities regulatory authority or regulator in each of Québec and Ontario (the Decision Makers) has received an application from the Filers on behalf of the Terminating Fund, for a decision under the securities legislation of Québec and Ontario (the Legislation) approving the transfer of assets of the Terminating Fund into the Continuing Fund (the Proposed Transfer) pursuant to paragraph 5.5(1)(b) of Regulation 81-102 Mutual Funds (Regulation 81-102) (the Approval Sought).

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

1. the Autorité des marchés financiers (the "Autorité") is the principal regulator for this application;

2. the Filer has provided notice that subsection 4.7(1) of Regulation 11-102 respecting 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, Northwest Territories, Yukon Territory and Nunavut; and

3. the decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.

Interpretation

Defined terms contained in Regulation 14-101 Definitions and Regulation 11-102 have the same meaning in this decision unless otherwise defined.

Representations

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

1. The Filer is a corporation established under the Canada Business Corporations Act, R.S.C. 1985, c. C-44, whose head office is located in the province of Québec.

2. The Filer is a wholly-owned subsidiary of Industrial Alliance Insurance and Financial Services Inc., a public company listed on the Toronto Stock Exchange.

3. The Filer is duly registered as a portfolio manager in each of the provinces of Canada and as an investment fund manager in Quebec.

4. The Filer is acting as the investment fund manager for the Terminating Fund and the Continuing Fund (collectively, the "Funds") under a Master Management Agreement dated August 28, 2000, as amended.

5. Units of the Funds are distributed in each province and territory of Canada under a simplified prospectus governed by Regulation 81-101 respecting Mutual Fund Prospectus Disclosure.

6. The Funds are reporting issuers under applicable securities legislation of each province and territory of Canada.

7. Neither the Filer, nor the Funds, is in default of securities legislation in any province or territory of Canada.

8. The net asset value of the Funds is calculated on a daily basis, each day that the Toronto Stock Exchange is open for trading.

9. The board of directors of the Filer approved the Proposed Transfer on April 10, 2012.

10. On April 13, 2012, the Funds issued a press release and filed a material change report with respect to the Proposed Transfer.

11. On June 5, 2012, the Autorité issued a receipt for the simplified prospectus of the Funds that includes information relating to the Proposed Transfer.

12. In anticipation of the implementation of the Proposed Transfer, distributions of units of the Terminating Fund were suspended on April 20, 2012, with the exemption of the distributions relating to pre-authorized debit plans.

13. In accordance with Regulation 81-107 Independent Review Committee for Investment Funds, the Filer presented the terms of the Proposed Transfer to the Independent Review Committee of the Funds (the "IRC") for its recommendation. In April 2012, further to reasonable inquiry, the IRC recommended the Proposed Transfer, subject to the approval of the securityholders and the Decision Makers, on the basis that the transfer would achieve a fair and reasonable result for the Funds.

14. The approval by the Decision Makers of the Proposed Transfer is required because the Proposed Transfer does not satisfy all of the conditions for pre-approved reorganizations and transfers as set out in section 5.6 of Regulation 81-102.

15. Specifically, the Proposed Transfer does not satisfy the conditions set out in subparagraph 5.6(1)(a)(ii) and in paragraph 5.6(1)(b) of Regulation 81-102 since:

a) a reasonable person would not consider the fundamental investment objectives of the Terminating Fund and those of the Continuing Fund to be substantially similar; and

b) the Proposed Transfer will not be completed as a "qualifying exchange" within the meaning of section 132.2 of the ITA or a tax-deferred transaction under subsection 85(1), 85.1(1), 86(1) or 87(1) of the ITA.

16. Except for the two conditions stated above, the Proposed Transfer meets all of the other conditions for pre-approved reorganizations and transfers under section 5.6 of Regulation 81-102.

17. As required by subsection 5.1(f) of Regulation 81-102, securityholders of the Terminating Fund have approved the Proposed Transfer at a meeting held on June 18, 2012.

18. As required by section 5.4 of Regulation 81-102, a notice of meeting, a proxy solicitation and information circular (the Circular) have been sent to securityholders of the Terminating Fund not less than 21 days before the date of the meeting and have been filed via the System for Electronic Document Analysis and Retrieval ("SEDAR").

19. The Circular sent to the securityholders of the Terminating Fund:

a) complies with paragraph 5.6(1)(f) of the Regulation 81-102;

b) gives information on the significant differences between the Terminating Fund and the Continuing Fund;

c) states the different measures that will be taken to process the Proposed Transfer in an orderly manner;

d) provides information on the Proposed Transfer to enable the securityholders of the Terminating Fund to make an informed decision regarding the Proposed Transfer;

20. The Continuing Fund will not assume liabilities of the Terminating Fund; instead, the Terminating Fund will retain sufficient assets to satisfy its estimated liabilities for custody and fund accounting costs, being an amount approximately of $5,000.

21. Prior to the date of the Proposed Transfer, the Terminating Fund will sell in an orderly manner the securities of its portfolio that do not meet the investment objectives and investment strategies of the Continuing Fund. As a result, the Terminating Fund may temporarily hold cash or money market instruments in an higher proportion than what is suitable in order to achieve its investment objectives.

22. Assets of the Terminating Fund to be acquired by the Continuing Fund will be consistent with the investment objectives of the Continuing Fund.

23. Following the Proposed Transfer, the securityholders of the Terminating Fund will become securityholders of the Continuing Fund. As such, they will receive series of units of the Continuing Fund that are equivalent to the series of units of the Terminating fund.

24. As soon as reasonably possible following the date of the Proposed Transfer, the Terminating Fund will be wound up.

25. No sales charges, redemption fees or other fees or commissions will be payable by securityholders of the Terminating Fund in connection with the acquisition by the Continuing Fund of the assets of the Terminating Fund.

26. The Filer will pay for the costs of the Proposed Transfer. These costs consist mainly of brokerage charges associated with the Proposed Transfer related trades that occur both before and after the Proposed Transfer date, as well as legal fees and fees related to reporting to the securityholders and with respect to the applicable regulatory requirements.

27. Securityholders of the Terminating Fund will continue to have the right to redeem units of the Terminating Fund at any time up to the close of business on the Proposed Transfer date.

28. In the event that securityholders of the Terminating Fund do not approve the Proposed Transfer, the Terminating Fund will not be terminated.

29. Effective June 1, 2012, the Continuing Fund changed its name from IA Clarington Global Equity Fund to IA Clarington Global Opportunities Fund.

Decision

The Decision Makers are satisfied that the decision meets the test set out in the Legislation for the Decision Makers to make the decision.

The decision of the Decision Makers under the Legislation is that the Approval Sought is granted.