Jones Heward Investment Counsel Inc. et al.

Headnote

The relief provides an exemption, pursuant to section 233 of Regulation 1015 made under the Securities Act (Ontario) (the Regulation) from the prohibition in section 227(2)(b)(ii) of the Regulation. The prohibition prevents a registrant, when acting as a portfolio manager with discretionary authority, from providing advice with respect to a client's account to purchase and/or sell the securities of a related issuer or a connected issuer of the registrant, unless the registrant (i) secures the specific and informed written consent of the client once in each twelve month period and (ii) provides the client with its statement of policies.

Statutes Cited

Regulation 1015 made under the Securities Act (Ontario), ss. 227(2)(b)(ii), 233.

October 22, 2008

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO, NEWFOUNDLAND AND LABRADOR,

NEW BRUNSWICK AND NOVA SCOTIA

(the Jurisdictions)

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

JONES HEWARD INVESTMENT COUNSEL INC.

(JHIC)

AND

BMO HARRIS INVESTMENT MANAGEMENT INC.

(BHIMI)

AND

HIM MONEGY, INC. (HIM Monegy)

(individually, a Filer and collectively, the Filers)

DECISION

Background

The securities regulatory authority or regulator in each of the Jurisdictions (Decision Maker) has received an application from the Filers for a decision under the securities legislation of the Jurisdictions (the Legislation) exempting the Filers from the prohibition that a registrant shall not act as an adviser of securities of the registrant or of a related issuer of the registrant or, in the course of a distribution, in respect of securities of a connected issuer of the registrant (the Related/Connected Issuer Prohibition) unless a statement of policy is provided to the client and the specific and informed written consent of the client to invest in related or connected issuers of the registrant has been obtained once in each twelve month period (the Annual Consent Requirement) in the case of a Filer acting as a portfolio manager where the Filer purchases or sells, under its discretionary authority in connection with its managed account programs, securities of Bank of Montreal (the Bank) and its affiliates, as well as securities issued by investment funds that are related or connected issuers to the Filer (the Funds), and where the Filer obtains the specific and informed written consent of its Client(s) (as defined below) in advance of the Filer exercising discretionary authority in respect of securities of the Funds, the Bank and its affiliates (the Exemptive Relief Sought).

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

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

(b) the decision is the decision of the principal regulator and evidences the decision of each other Decision Maker.

Interpretation

Terms defined in National Instrument 14-101 Definitions have the same meaning if used in this decision, unless otherwise defined.

Representations

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

1. JHIC is a corporation incorporated under the laws of the Province of Ontario and has its head office in Toronto. It is registered as an adviser in the categories of investment counsel and portfolio manager, or its equivalent, in every province and territory of Canada. To the best of its knowledge, JHIC is not in default of securities legislation in any jurisdiction.

2. BHIMI is a corporation incorporated under the laws of Canada and has its head office in Toronto. It is registered as an adviser in the categories of investment counsel and portfolio manager, or its equivalent, in every province and territory of Canada. To the best of its knowledge, BHIMI is not in default of securities legislation in any jurisdiction.

3. HIM Monegy is a corporation incorporated under the laws of Canada and has its head office in Toronto. It is registered as an adviser in the categories of investment counsel and portfolio manager in the provinces of Ontario and Alberta. To the best of its knowledge, HIM Monegy is not in default of securities legislation in any jurisdiction.

4. The Filers offer discretionary management services to their clients (Clients) pursuant to a managed account agreement (Managed Account Agreement).

5. Clients enter into a Managed Account Agreement with a Filer that authorizes that Filer to exercise discretion in the Client's account to manage the investments by investing in a variety of securities, which may include investment funds. Under the Managed Account Agreement, Clients have the ability to set constraints regarding the securities that may or may not be purchased by the Filer for the Client's account.

6. The Filers or their affiliates are the managers of groups of mutual funds known as the BMO Nesbitt Burns Group of Funds, the Guardian Group of Funds, the BMO Harris Private Portfolios and the BMO Mutual Funds and may be the managers of other Funds in the future. The Funds are or will be reporting issuers as they are or will be qualified for distribution under a prospectus in some or all of the provinces and territories of Canada.

7. The Funds may be purchased on behalf of Clients of each Filer, including Clients who have entered into a Managed Account Agreement. These Clients consent to investments in mutual funds (which may include the Funds) through their investment policy statement in which their investment mandates are set out.

8. The Related/Connected Issuer Prohibition prohibits a registrant, such as each Filer, from acting as an adviser of securities of the registrant, or of a related issuer of the registrant, or in the course of a distribution in respect of securities of a connected issuer of the registrant.

9. The Annual Consent Requirement and the Statement of Policies Requirement, to the extent applicable, exempts a registrant from the Related/Connected Issuer Prohibition.

10. The Funds are generally connected issuers of the Filers within the meaning of the Legislation and may be related issuers of the Filers. The Filers are not required to list their connected issuers in their statements of policies but, as a result of the fact that the Funds may be related issuers, do list the Funds in their statement of policies.

11. The Filers are wholly owned subsidiaries of the Bank and so the Bank and its affiliates are related issuers to the Filers.

12. As a result of these relationships, the Filers are prohibited from including securities issued by the Bank, its affiliates or the Funds in their Clients' accounts, unless the Filers comply with the Annual Consent Requirement and the Statement of Policies Requirement. Clients thereby may be prevented from investing in securities issued by the Bank, its affiliates or the Funds, even where the inclusion of these securities would be in the best interests of the Client.

13. Each Client receives a statement of policies that lists the related issuers of the applicable Filer when the Client opens an account with that Filer. In the event of a significant change in its statement of policies, each Filer will provide to each of its Clients a copy of the revised version of, or amendment to, its statement of policies.

14. Each Filer will disclose, to each of its Clients in writing, the relationship between the Filers and the Bank, its affiliates and/or Funds.

Decision

Each of the Decision Makers is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.

The decision of the Decision Maker under the Legislation is that the Exemptive Relief Sought is granted to each Filer provided that:

(A) The Filer has secured the specific and informed written consent of the Client in advance of the exercise of discretionary authority for that Client in respect of securities of the Funds, the Bank and its affiliates;

(B) The Filer has previously provided the Client with a statement of policies or equivalent document of the Filer, which identified the relationship between the Filer, the Funds, the Bank and its affiliates; and

(C) All investment decisions to invest in securities of the Funds, the Bank or its affiliates are uninfluenced by considerations other than the best interest of the Client.