Securities Law & Instruments

Headnote

Investment by mutual funds in another specifiedmutual fund under common management exempted from the self-dealingprohibition in clause 111(2)(b) and subsection 111(3), and fromthe reporting requirements of clauses 117(1)(a) and 117(1)(d).

Statutes Cited

Securities Act (Ontario), R.S.O. 1990, c. S.5,as am., 111(2)(b), 111(3), 117(1)(a) and 117(1)(d).

IN THE MATTER OF
THE SECURITIES LEGISLATION OF
BRITISH COLUMBIA, ALBERTA, SASKATCHEWAN,
ONTARIO, NOVA SCOTIA AND
NEWFOUNDLAND AND LABRADOR

AND

IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM FOR
EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF
MACKENZIE UNIVERSAL SELECT MANAGERS USA CAPITAL CLASS
("USA Fund")
MACKENZIE UNIVERSAL SELECT MANAGERS JAPAN CAPITAL CLASS
("Select Managers Japan Fund")
MACKENZIE UNIVERSAL GLOBAL ETHICS CAPITAL CLASS
("Global Ethics Capital Class")
MACKENZIE UNIVERSAL INTERNET TECHNOLOGIES CAPITAL CLASS
("Internet Technologies Capital Class")
MACKENZIE UNIVERSAL DIVERSIFIED EQUITY CAPITAL CLASS
("Diversified Equity Fund")
MACKENZIE UNIVERSAL WORLD SCIENCE & TECHNOLOGY CAPITAL CLASS
("SciTech Capital Class")
MACKENZIE UNIVERSAL WORLD REAL ESTATE CAPITAL CLASS
("Real Estate Capital Class")
MACKENZIE UNIVERSAL WORLD RESOURCE CAPITAL CLASS
("Resource Capital Class")

MRRS DECISION DOCUMENT

WHEREAS the Canadian securities regulatoryauthority or regulator (the "Decision Maker") in eachof the provinces of British Columbia, Alberta, Saskatchewan,Ontario, Nova Scotia and Newfoundland (the "ParticipatingJurisdictions") has received an application (the "Application")from Mackenzie Financial Corporation (the "Mackenzie"),as manager of USA Fund, Select Managers Japan Fund, Global EthicsCapital Class, Internet Technologies Capital Class, DiversifiedEquity Fund, SciTech Capital Class, Real Estate Capital Classand Resource Capital Class (each a "Top Fund" andcollectively, the "Top Funds") of Mackenzie FinancialCapital Corporation ("Capitalcorp") for a decisionpursuant to the securities legislation of the ParticipatingJurisdictions (the "Legislation") that the followingrequirements and restrictions contained in the Legislation (the"Requirements") shall not apply in respect of certaininvestments to be made by the Top Funds in Mackenzie UniversalAmericas Fund ("Americas Fund"), Mackenzie UniversalJapan Fund ("Japan Fund"), Mackenzie Universal GlobalEthics Fund ("Global Ethics Fund"), Mackenzie UniversalInternet Technologies Fund ("Internet Technologies Fund"),Mackenzie Universal World Value Fund ("Value Fund"),Mackenzie Universal Communications Fund ("CommunicationsFund"), Mackenzie Universal World Science & TechnologyFund ("SciTech Fund"), Mackenzie Universal World RealEstate Fund ("Real Estate Fund") and Mackenzie UniversalWorld Resource Fund ("Resource Fund") (each and "UnderlyingFund" and collectively, the "Underlying Funds"):

1. the Requirements prohibiting a mutual fundfrom knowingly making or holding an investment in a person orcompany in which the mutual fund, alone or together with oneor more related mutual funds, is a substantial unitholder; and
2. the Requirements requiring the management company or, inBritish Columbia, a mutual fund manager, to file a report relatingto a purchase or sale of securities between the mutual fundand any related person or company, or any transaction in which,by arrangement other than an arrangement relating to insidertrading in portfolio securities, the mutual fund is a jointparticipant with one or more of its related persons or companies;

AND WHEREAS pursuant to the Mutual RelianceReview System for Exemptive Relief Applications ("System"),the Ontario Securities Commission is the principal regulatorfor this Application;

AND WHEREAS Mackenzie has representedto the Decision Makers that:

(a) Mackenzie is a corporation governed by thelaws of the province of Ontario with its head office in Toronto,Ontario. Mackenzie is the manager of the Top Funds and the managerand trustee of the Underlying Funds.

(b) Each of the Underlying Funds is a mutualfund trust established by a declaration of trust governed bythe laws of the Province of Ontario.

(c) Each of the Top Funds and the UnderlyingFunds are reporting issuers in each of the Participating Jurisdictionsand are not in default of any requirements of the Legislation.

(d) Series A, F, I and O shares of each of theTop Funds, as well as Series R shares of USA Fund and SelectManagers Japan Fund, are offered for sale under a simplifiedprospectus and annual information form dated October 25, 2001.The shares are offered in all provinces and territories of Canada.

(e) Series A, F, I and O units of each of theUnderlying Funds are offered for sale under an Amended and RestatedSimplified Prospectus and Annual Information Form dated February15, 2002. The funds are offered in all provinces and territoriesof Canada.

(f) The following table reflects the proposedmergers (the "Proposed Mergers", and individually,as a "Proposed Merger") of each Underlying Fund andthe Top Fund with which it will be merged:

Underlying Fund Top Fund
Americas Fund USA Fund
Japan Fund Select Managers Japan Fund
Global Ethics Fund Global Ethics Capital Class
Internet Technologies Fund
Internet Technologies Capital Class
Value Fund Diversified Equity Fund
Communications Fund and SciTechFund (together with Mackenzie Universal Communications CapitalClass) SciTech Capital Class
Real Estate Fund Real Estate Capital Class
Resource Fund Resource Capital Class

(g) The Proposed Mergers are being approvedby securityholders of the Top Funds and Underlying Funds atmeetings of securityholders scheduled to be held on May 6 and7, 2002. Securityholders would have received full disclosureof all relevant facts concerning the Proposed Mergers in advanceof the above meetings. The costs associated with holding themeetings were borne by Mackenzie.

(h) Mackenzie will carry out the following stepsto complete the Proposed Mergers:

(i) the declaration of trust of each UnderlyingFund will be amended to create the right of its correspondingTop Fund to purchase all the units held by each securityholderof the Underlying Fund;

(ii) each Top Fund will purchase all of theunits of securityholders of its corresponding Underlying Fundand it will thereby be a "fund-of-funds" (the "Investments")of the Underlying Fund;

(iii) in exchange for purchasing their units,each Top Fund will issue to each securityholder of the UnderlyingFund shares of a series of the Top Fund equal in value to theunits it previously owned in the Underlying Fund.

(iv) If securityholders of the Underlying Fundhave an accrued gain on the units which the previously heldin the Underlying Fund, then they will be given the opportunityto authorize Mackenzie to file a joint election with Mackenziepursuant to Section 85 of the Income Tax Act (Canada), and pursuantto applicable tax legislation in the Province of Quebec fora unitholder who is resident in such province, to treat thedisposition of their securities to the Top Fund as a tax deferredrollover. Mackenzie will mail election forms for tax purposesto certain securityholders of the Underlying Funds.

(v) Each of the Underlying Funds will be terminatedon or before December 31, 2002.

(i) The portfolio and other assets of each UnderlyingFund to be acquired by its corresponding Top Fund arising fromthe Proposed Mergers may be acquired by the Top Fund and areacceptable to the portfolio advisors of each Top Fund and consistentwith the investment objectives of each Top Fund. No sales chargeswill be payable in connection with the acquisition by each TopFund of the investment portfolio and other assets of its UnderlyingFund.

(j) The portfolio of each Underlying Fund willcontinue to be managed by Mackenzie on the same basis as theportfolio of the corresponding Top Fund until they are mergedinto a single portfolio. There will be no duplication of managementfees, advisor fees or operating expenses in connection withthe management of the portfolios.

(k) During the period until the Underlying Fundis terminated, conditional upon regulatory approval, each TopFund will produce financial statements on a consolidated basis,meaning that it will combine the results of the Top Fund andits Underlying Fund with its financial statements as if theportfolio investments were held by the same legal entity.

(l) Following implementation of the ProposedMergers, the simplified prospectus and annual information formof the Top Funds will be amended to the extent necessary toreflect the Proposed Mergers.

(m) In order to obtain the regulatory approvalsnecessary to implement the Proposed Mergers, an applicationunder National Instrument 81-102 has been filed with applicablesecurities regulatory authorities.

(n) In the absence of this Decision, pursuantto the Legislation, each Top Fund is prohibited from makingor holding an investment in a person or company in which themutual fund, alone or together with one or more related mutualfunds, is a substantial unitholder. As a result, in the absenceof this Decision, each Top Fund would be required to divestitself of the units of its corresponding Underlying Fund acquiredpursuant to the Proposed Mergers.

(o) In the absence of this Decision, pursuantto the Legislation, Mackenzie would be required to file a reporton every purchase or sale of units of a Underlying Fund by itscorresponding Top Fund.

AND WHEREAS pursuant to the System, thisMRRS Decision Document evidences the decision of each DecisionMaker (collectively, the "Decision");

AND WHEREAS each of the Decision Makersare satisfied that the test contained in the Legislation thatprovides the Decision Maker with the jurisdiction to make theDecision has been met;

THE DECISION of the Decision Makers underthe Legislation is that the Requirements shall not apply toeach Top Fund or the Manager, as the case may be, in respectof the Investments;

PROVIDED IN EACH CASE THAT:

1. The Decision as it relates to the jurisdictionof a Decision Maker, will terminate on December 31, 2002; and

2. the foregoing Decision shall only apply inrespect of the Investments made by a Top Fund in compliancewith the following conditions:

(a) the securities of both the Top Fund andthe Underlying Fund are eligible for sale in the jurisdictionof the Decision Maker pursuant to a simplified prospectus andannual information form which has been filed with and acceptedby the Decision Maker;

(b) the investment by the Top Fund in the UnderlyingFund is compatible with the fundamental investment objectivesof the Top Fund;

(c) the Underlying Fund is not a mutual fundwhose investment objective includes investing directly or indirectlyin other mutual funds;

(d) subsequent to each Proposed Merger, eachrespective Underlying Fund will not issue additional units,other than investments as a result of the reinvestment of distributionsof the Underlying Fund;

(e) the simplified prospectus of each Top Fundis amended to disclose details of the Proposed Merger;

(f) no sales charges are payable by the TopFunds in relation to their purchase of units of the UnderlyingFunds;

(g) no fees or charges of any sort are paidby the Top Fund and the Underlying Funds, by their respectivemanagers or principal distributors, or by any affiliate or associateof any of the foregoing entities, to anyone in respect of thepurchase, holding or redemption by the Top Fund of the unitsof the Underlying Funds;

(h) the arrangements between or in respect ofthe Top Funds and the Underlying Funds are such as to avoidthe duplication of management fees;

(i) each of the Top Fund will consolidate itsinterests in the corresponding Underlying Fund for preparingfinancial statements; and

(j) the respective securityholders' approvalfor each Proposed Mergers.

May 14, 2002.

"Theresa McLeod"      "Robert Shirriff"