Sentry Select Capital Corp. et al.

Headnote

Transfer of assets between an non-redeemable investment fund and a mutual fund in connection with proposed merger exempted from the self-dealing prohibition in paragraph 118(2)(b) of the Act and subsection 115(6) of the Regulation -- Merger subject to unitholder approval -- All costs of the Merger to be borne by the Manager.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 118(2)(b), 121(2)(a)(ii).

Ontario Regulation 1015 - General Regulation made under the Securities Act, R.R.O. 1990, Reg. 1015, as am., s. 115(6).

August 19, 2008

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO

AND

IN THE MATTER OF

SENTRY SELECT CAPITAL CORP.

(the "Filer")

AND

COMMERCIAL AND INDUSTRIAL SECURITIES

INCOME TRUST AND

SENTRY SELECT CANADIAN INCOME FUND

(collectively, the "Funds")

DECISION

Background

The Ontario Securities Commission (the "Decision Maker") has received an application from the Filer for a decision under the securities legislation of Ontario (the "Legislation") granting relief from:

(a) the restriction in paragraph 118(2)(b) of the Securities Act (Ontario) (the "Act") which prohibits a portfolio manager from purchasing or selling the securities of any issuer from or to the account of the portfolio manager, and

(b) the restriction in subsection 115(6) of Ontario Regulation 1015, which prohibits a purchase or sale of any security in which an associate of an investment counsel has a direct or indirect beneficial interest from or to any portfolio managed or supervised by the investment counsel,

in connection with a proposed merger between Commercial and Industrial Securities Income Trust (the "Terminating Fund") and Sentry Select Canadian Income Fund (the "Continuing Fund") (the "Requested Relief").

Interpretation

Defined terms contained in National Instrument 14-101 - Definitions have the same meaning in this decision unless they are defined in this decision.

Representations

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

1. The Filer intends to merge the Terminating Fund and the Continuing Fund (the "Merger"), which will involve the transfer of assets of the Terminating Fund in exchange for Series A Units of the Continuing Fund (the "Continuing Fund Units").

2. At the time the Merger is effected, the Filer will be the "portfolio manager" or "investment counsel" for each of the Terminating Fund and the Continuing Fund for purposes of the Legislation.

3. The Filer is registered in Ontario as an adviser under the categories of Investment Counsel and Portfolio Manager.

4. The Filer is the manager and trustee of the Funds.

5. Each Fund was established pursuant to a declaration of trust under the laws of the Province of Ontario. The Terminating Fund is a "non-redeemable investment trust" as defined in the Legislation. The Continuing Fund is a mutual fund for purposes of the Legislation.

6. The Terminating Fund offered its units in all of the Provinces of Canada pursuant to a final prospectus dated May 30, 2002 and its units were, until August 14, 2008, listed on the Toronto Stock Exchange ("TSX").

7. The Continuing Fund offers its units in all of the Provinces of Canada on a continuous basis pursuant to a simplified prospectus dated August 10, 2007.

8. Unitholders of the Terminating Fund approved the Merger at a special meeting of unitholders held on August 13, 2008 (the "Meeting"). In connection with the Meeting, the Filer, as manager of the Terminating Fund (the "Manager") sent to the unitholders of the Terminating Fund a notice of special unitholders meeting and management information circular each dated May 22, 2008 and a related form of proxy (collectively, the "Meeting Materials").

9. It is proposed that the Merger will occur on or about August 20, 2008 (the "Merger Date"), subject to regulatory approvals, where necessary.

10. Unitholders of the Terminating Fund were provided with tax disclosure about the ramifications of the Merger in the Meeting Materials.

11. As required by National Instrument 81-107 Independent Review Committee for Investment Funds, an Independent Review Committee ("IRC") has been appointed for the Funds, and the Filer presented the terms of the Merger to the IRC for a recommendation. The IRC reviewed the proposed Merger and it was recommended that it be put to unitholders of the Terminating Fund for their consideration on the basis that the Merger would achieve a fair and reasonable result for each of the Funds.

12. The Terminating Fund and the Continuing Fund will jointly elect for the Merger to be completed on a tax-deferred basis.

13. The Merger is expected to take place using the following steps:

(a) the Terminating Fund will transfer all of its assets to the Continuing Fund in exchange for Series A Units of the Continuing Fund and the assumption by the Continuing Fund of all of the liabilities of the Terminating Fund. The Series A Units of the Continuing Fund received by the Terminating Fund will have an aggregate net asset value ("NAV") equal to the NAV of the Terminating Fund and will be issued at the NAV per Series A Unit of the Continuing Fund in each case as of the close of business on the business day prior to Merger Date.

(b) immediately thereafter, the Series A Units of the Continuing Fund received by the Terminating Fund will be distributed to unitholders of the Terminating Fund in proportion to the number of units they held in the Terminating Fund. Each unitholder will receive units of the Continuing Fund having the same aggregate NAV as their units of the Terminating Fund as of the close of business on the business day prior to the Merger Date.

(c) as soon as reasonably possible following the Merger, the Terminating Fund will be wound up.

(d) the Filer will issue a press release forthwith after the Merger is completed announcing the completion of the Merger and the ratio by which units of the Terminating Fund were exchanged for Series A Units of the Continuing Fund. The records of the broker or other intermediary through whom a unitholder holds his, her or its units should reflect the Merger within five business days after the Merger.

14. All costs and expenses associated with the Merger will be borne by the Filer. No sales charges, redemption fees or other fees or commissions will be payable by unitholders of the Funds in connection with the Merger.

15. The transfer of the investment portfolio of the Terminating Fund to the Continuing Fund as a step in the Merger may be considered a sale of securities caused by the "portfolio manager" from the Terminating Fund to the account of an associate of the "portfolio manager", contrary to the Legislation.

16. The transfer of the investment portfolio of the Terminating Fund to the Continuing Fund as a step in the Merger may be considered a sale of securities in which an associate of an investment counsel has a direct or indirect beneficial interest to a portfolio managed or supervised by the investment counsel, contrary to the Legislation.

17. The Funds have similar investment objectives and valuation procedures.

18. In the opinion of the Filer, the Merger will not adversely affect unitholders of the Terminating Fund or the Continuing Fund and will in fact be in the best interests of unitholders of each of the Funds.

19. In the absence of this order, the Filer would be prohibited from purchasing and selling the securities of the Terminating Fund in connection with the Merger.

Decision

The Decision Maker is satisfied that the test contained in the Legislation that provides the Decision Maker with the jurisdiction to make the decision has been met. The decision of the Decision Maker under the Legislation is that the Requested Relief is granted.