Mackenzie Financial Corporation et al.

Headnote

NP 11-203 -- Process for Exemptive Relief Applications in Multiple Jurisdictions -- Approval of mutual fund reorganizations pursuant to section 5.5(1)(b) of NI 81-102 required because the reorganizations do not meet criteria for pre-approval -- the reorganizations do not meet the requirements in sections 5.6(1)(f)(ii) and (iii) of NI 81-102 because the continuing funds will be new funds and do not have a simplified prospectus or fund facts documents -- Exemption from seed capital requirements from section 3.1 of NI 81-102.

Upon reorganization, portfolio assets of terminating funds to continue as portfolio assets referable to the continuing funds -- Reorganization will take two existing classes (hedged and unhedged) and put each existing class into a separate fund going forward, one hedged and one unhedged -- Continuing funds to have same investment objectives, investment strategies, management fees, portfolio investment manager, and, at effective date of mergers, same portfolio assets as the terminating funds -- Financial data of terminating funds is significant information that can assist investors in making decision to purchase or hold shares of continuing funds.

Exemption from requirement in section 2.1 of NI 81-101 and Item 5(b) of Form 81-101F1, Item 2 of Form 81-101F3, to permit terminating funds to preserve their respective start dates once continued as new classes of a mutual fund corporation further to mergers -- Exemption from Item 4 of Form 81-101F3 to permit continuing funds to use information of terminating Funds for the average return and year-by-year return in the fund facts -- Exemption from sections 15.3(2), 15.6(a)(i), 15.6(b), 15.6(d), 15.8(2)(a), 15.8(3)(a) and 15.9(2)(d) of NI 81-102 to permit the continuing funds to use the performance data of the terminating funds in sales communications and reports to securityholders -- Exemption from section 4.4 of NI 81-106 and Items 3.1(1), 3.1(7), 3.1(8), 4.1(1), 4.1(2), 4.2(1), 4.2(2) and 4.3(1)(a) of Part B of Form 81-106F1 and Items 3(1) and 4 of Part C of Form 81-106F1 to permit the continuing funds to include in their annual and interim management reports of fund performance the financial highlights and past performance of the terminating funds.

Applicable Legislative Provisions

National Instrument 81-101 Mutual Fund Prospectus Disclosure, s. 6.1.

National Instrument 81-102 Mutual Funds, s. 19.1.

National Instrument 81-106 Investment Fund Continuous Disclosure, s. 17.1.

July 17, 2012

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

(the Filer)

AND

IN THE MATTER OF

MACKENZIE IVY FOREIGN EQUITY CLASS

(HEDGED CLASS AND UNHEDGED CLASS),

MACKENZIE UNIVERSAL AMERICAN GROWTH CLASS

(HEDGED CLASS AND UNHEDGED CLASS),

MACKENZIE IVY FOREIGN EQUITY CLASS,

MACKENZIE IVY FOREIGN CURRENCY NEUTRAL CLASS,

MACKENZIE UNIVERSAL AMERICAN GROWTH CLASS AND

MACKENZIE UNIVERSAL AMERICAN GROWTH CURRENCY NEUTRAL CLASS

(the Funds)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filer on behalf of the Funds for a decision under the securities legislation of the Jurisdiction (the Legislation) granting an exemption from the following provisions of the Legislation to enable the Continuing Funds (as defined below) to include in their annual and interim management reports of fund performance (MRFPs) the performance data and information derived from the financial statements (collectively, the Financial Data) of the corresponding Terminating Funds (as defined below) that will be presented in the Terminating Funds' annual MRFPs for the year ended March 31, 2012 and interim MRFPs for the period ended September 30, 2012:

(a) Section 4.4 of National Instrument 81-106 -- Investment Fund Continuous Disclosure (NI 81-106) for the relief requested from Form 81-106F1 -- Contents of Annual and Interim Management Report of Fund Performance (Form 81-106F1) for the Continuing Funds;

(b) Items 3.1(1), 3.1(7), 3.1(8), 4.1(1) in respect of the requirement to comply with subsections 15.3(2) and 15.9(2)(d) of National Instrument 81-102 -- Mutual Funds (NI 81-102), 4.1(2), 4.2(1), 4.2(2), and 4.3(1)(a) of Part B of Form 81-106F1; and

(c) Items 3(1) and 4 of Part C of Form 81-106F1 for the Continuing Funds;

(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 (Principal Regulator); and

(b) the Filer has provided notice that section 4.7(1)(c) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon 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.

"Capitalcorp" means Mackenzie Financial Capital Corporation, a corporation formed under the Business Corporations Act (Ontario).

"Continuing Funds" means the Continuing Hedged Funds and the Continuing Unhedged Funds.

"Continuing Hedged Funds" means the portfolio of assets owned by Capitalcorp that will be referable to each of Mackenzie Ivy Foreign Equity Currency Neutral Class and Mackenzie Universal American Growth Currency Neutral Class after the Effective Date.

"Continuing Unhedged Funds" means the portfolio of assets owned by Capitalcorp that will be referable to each of Mackenzie Ivy Foreign Equity Class and Mackenzie Universal American Growth Class after the Effective Date.

"Effective Date" means the date of the Proposed Reorganizations, which is expected to be on or about the date on which the simplified prospectus of each Continuing Fund is receipted.

"Fund" or "Funds" means, individually or collectively, the Continuing Funds and the Terminating Funds.

"Hedged Class" means the hedged class of shares of the Terminating Funds.

"Proposed Reorganizations" means the proposed reorganizations pursuant to which shareholders in the Terminating Funds will become shareholders in the corresponding Continuing Funds set out below:

Terminating Funds	Continuing Funds
Mackenzie Ivy Foreign Equity Class (unhedged class)	Mackenzie Ivy Foreign Equity Class
Mackenzie Ivy Foreign Equity Class (hedged class)	Mackenzie Ivy Foreign Equity Currency Neutral Class
Mackenzie Universal American Growth Class (unhedged class)	Mackenzie Universal American Growth Class
Mackenzie Universal American Growth Class (hedged class)	Mackenzie Universal American Growth Currency Neutral Class

"Terminating Funds" means the portfolio of assets owned by Capitalcorp that is referable to Mackenzie Ivy Foreign Equity Class and Mackenzie Universal American Growth Class prior to the Effective Date.

"Unhedged Class" means the unhedged class of shares of the Terminating Funds.

Representations

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

The Filer and the Funds

1. The Filer is a corporation governed by the laws of Ontario and is registered as portfolio manager and exempt market dealer in all of the provinces and territories of Canada. The Filer is also registered as an investment fund manager in Ontario and registered under the Commodity Futures Act (Ontario) in the category of Commodity Trading Manager.

2. The Filer is the manager and portfolio manager of the Terminating Funds and will be the manager and portfolio manager of the Continuing Funds.

3. The head office of the Filer is located in Toronto, Ontario.

4. The Filer and the Terminating Funds are not in default of securities legislation in any province or territory of Canada.

5. Capitalcorp. is a mutual fund corporation incorporated under the laws of Ontario. Each Terminating Fund is referable to two classes of shares of Capitalcorp, namely, the Hedged Class and the Unhedged Class and each Continuing Fund will be referable to a single class of shares of Capitalcorp. Each class of shares is issuable in more than one series.

6. The Terminating Funds are, and the Continuing Funds will be, reporting issuers under the applicable securities legislation of each province and territory of Canada. The Terminating Funds have been reporting issuers for at least 12 months.

7. The Terminating Funds, and the Continuing Funds will, operate in accordance with NI 81-102, except for exemptive relief that has been previously obtained.

8. The Terminating Funds are currently qualified for sale in each of the provinces and territories of Canada pursuant to the following simplified prospectuses, fund facts, and annual information forms:

(a) for both Mackenzie Ivy Foreign Equity Class (hedged class and unhedged class) and Mackenzie Universal American Growth Class (hedged class and unhedged class), a simplified prospectus, fund facts, and annual information form for the Mackenzie Funds dated September 30, 2011 (as amended) (the Mackenzie prospectus);

(b) for Mackenzie Universal American Growth Class (unhedged class), a simplified prospectus, fund facts, and annual information form for the Quadrus Group of Funds dated June 30, 2011 (as amended) (the Quadrus prospectus);

(c) for Mackenzie Universal American Growth Class (unhedged class), a simplified prospectus, fund facts, and annual information form for the Laurentian Bank Group of Funds dated December 30, 2011 (the LB prospectus);

(collectively, the Prospectuses).

9. The Continuing Funds will be new funds. The Filer intends to file preliminary simplified prospectuses, fund facts, and annual information forms for each of the Continuing Funds, which will be part of the annual renewal for the Mackenzie Prospectus, and a standalone simplified prospectus, fund facts, and annual information form for the Quadrus prospectus and the LB prospectus in respect of Mackenzie Universal American Growth Class, on or about August 28, 2012. The simplified prospectuses for the Continuing Funds will be filed on or about September 28, 2012.

The Proposed Reorganizations

10. The Filer is proposing to reorganize each Terminating Fund by:

(a) causing the pool of assets comprising each Terminating Fund to be "split" to become two separate pools of assets, with one pool of assets becoming referable solely to the Hedged Class and the other pool of assets becoming referable solely to the Unhedged Class, and

(b) amending Capitalcorp's articles of incorporation such that the Hedged Classes of Mackenzie Ivy Foreign Equity Class and Mackenzie Universal American Growth Class will be renamed "Mackenzie Ivy Foreign Equity Currency Neutral Class" and "Mackenzie Universal American Growth Currency Neutral Class", respectively, and the Unhedged Classes of Mackenzie Ivy Foreign Equity Class and Mackenzie Universal American Growth Class will be renamed "Mackenzie Ivy Foreign Equity Class" and "Mackenzie Universal American Growth Class", respectively.

11. The Proposed Reorganizations are not mergers of mutual funds as is commonly understood since the classes of shares referable to the Terminating Funds will not terminate under the Ontario Business Corporations Act but will continue as classes of shares referable to the Continuing Funds after the Effective Date.

12. Upon completion of the Proposed Reorganizations:

(a) their rights as shareholders of the Continuing Funds will be identical to the rights they had as shareholders of the Terminating Funds;

(b) the net asset value (NAV) for each share of the Continuing Hedged Fund and Continuing Unhedged Fund will be equal to the NAV per share of the corresponding Hedged Classes and Unhedged Classes;

(c) the investment objectives, investment strategies, investment portfolio manager, fee structures and valuation procedures applicable to each Continuing Hedged Fund will be identical to those of the corresponding Hedged Class, except that the Continuing Hedged Fund's investment objectives and investment strategies will reflect that the fund will hedge its foreign currency exposure, and

(d) the investment objectives, investment strategies, investment portfolio manager, fee structures and valuation procedures applicable to each Continuing Unhedged Fund will be identical to those of the corresponding Unhedged Class, except that the Continuing Unhedged Fund's investment strategies will reflect that the fund will not hedge its foreign currency exposure.

13. As a result, notwithstanding the reorganization by way of the Proposed Reorganizations, the Continuing Funds will be managed identically to the Terminating Funds.

14. The Proposed Reorganizations will benefit shareholders of the Terminating Funds as follows:

(a) improved hedging: by having two separate mutual funds, with only one using hedging as a fundamental investment strategy, there will be an improved system for administering the hedging activities for the Continuing Funds. This could lead to improved accuracy in hedging and could reduce the potential for administrative errors.

(b) improved clarity: by having two separate mutual funds, there will be improved clarity to shareholders in disclosure documents. Currently, the Terminating Funds' disclosure documents describe information relating to both the Hedged Class and Unhedged Class of each Terminating Fund in one document. If the Proposed Reorganizations are implemented, there will be separate disclosure documents for each Continuing Hedged Fund and the Continuing Unhedged Fund, thereby improving clarity to shareholders.

15. Although shareholders in each of the Continuing Funds will hold the same class of shares of Capitalcorp after the Effective Date as they did before as shareholders of the corresponding Terminating Funds, and they will experience no change in investment objectives or investment strategies (other than as described above), investment portfolio manager, fee structure or valuation procedures, the Proposed Reorganizations will result in the creation of two new mutual funds for each Terminating Fund as contemplated by section 1.3 of NI 81-102. Accordingly, a special meeting (Special Meeting) of shareholders of the Terminating Funds will be held to vote on the Proposed on or about August 27, 2012.

16. If approval of the Proposed Reorganizations by shareholders of the Terminating Funds is obtained at the Special Meeting, subject to having obtained regulatory approval, the Filer wishes to have the Proposed Reorganizations become effective concurrently with the date a receipt is issued for the simplified prospectuses of the Continuing Funds.

17. If approval of investors of the Termination Funds is not received, then the Proposed Reorganizations will not proceed. Accordingly, it is unlikely that the Continuing Funds would be launched if the Proposed Reorganizations are not approved because it would be extremely costly for the Filer to file simplified prospectuses, annual information forms, and fund facts for each Continuing Fund, and have to terminate the Continuing Funds forthwith.

18. The Continuing Funds' financial year-end going forward will be March 31.

19. The Continuing Funds will be new funds. However, while the Continuing Hedged Funds and the Continuing Unhedged Funds will each have the same assets and liabilities as the corresponding Hedged Classes and Unhedged Classes, as new funds, they will not have their own Financial Data as at the Effective Date. In order for the Proposed Reorganizations to be as seamless as possible for shareholders in the Terminating Funds and the Continuing Funds, the Filer proposes that:

(a) the Continuing Funds MRFPs' will include the Financial Data presented in the Terminating Funds' annual MRFPs for the year ended March 31, 2012 and interim MRFPs for the period ended September 30, 2012. The Continuing Funds will file their first annual MRFPs within 90 days of March 31, 2013 as required under NI 81-106. The Continuing Funds will file their first interim MRFPs within 60 days of September 30, 2013 as required under NI 81-106;

(b) the Terminating Funds will each prepare annual financial statements for the year ended March 31, 2012. The Terminating Funds will file and deliver annual financial statements and an annual MRFP for their financial year ended March 31, 2012 within 90 days as required under NI 81-106; and

(c) provided that the simplified prospectuses for the Continuing Funds are filed on or about September 28, 2012, the Terminating Funds will prepare interim financial statements for the period ended September 30, 2012. The Terminating Funds will file and deliver interim financial statements and interim MRFPs for the interim period ended September 30, 2012 within 60 days as required under NI 81-106;

(d) the Continuing Funds will prepare comparative interim and annual financial statements for 2013 under section 2.1 of NI 81-106 using the Terminating Fund's annual financial statements for the year ended March 31, 2012 and interim financial statements for the period ended September 30, 2012. The Continuing Funds will file their first comparative annual financial statements within 90 days of March 31, 2013 as required under NI 81-106. The Continuing Funds will file their first comparative interim financial statements within 60 days of September 30, 2013 as required under NI 81-106.

20. The Financial Data of the Terminating Funds is significant information which can assist shareholders in determining whether to purchase or hold securities of the corresponding Continuing Funds.

21. The Filer has filed a separate application for exemptive relief from certain provisions of (a) NI 81-102 to permit the Continuing Funds to use performance data of the Terminating Funds in sales communications and reports to shareholders (the Fund Communications) and (b) National Instrument 81-101 -- Mutual Fund Prospectus Disclosure and Form 81-101F1 -- Contents of Simplified Prospectus and Form 81-101F3 Contents of Fund Facts Document to permit the Continuing Funds to disclose the state dates of the Terminating Funds as their respective state dates (NI 81-102 and NI 81-101 Relief).

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 provided that:

(a) the Terminating Funds prepare annual financial statements under section 2.1 of NI 81-106 for the year ended March 31, 2012 and interim financial statements for the period ended September 30, 2012;

(b) the MRFP for each series of each Continuing Fund includes Financial Data of the corresponding series of the corresponding Terminating Fund and discloses the Proposed Reorganization for the relevant time periods; and

(c) the Continuing Funds prepare their simplified prospectuses and other Fund Communications in accordance with NI 81-102 and NI 81-101 Relief.