Scotia Cassels Investment Counsel Limited, RBC Global Investment Management nc., Natcan Investment Management Inc., Tal Global Asset Management Inc., CM Investment Management Inc., Gaurdian Group of Funds Ltd., BMO Harris Investment Management Inc., BMO N

Headnote

Mutual Reliance Review System for ExemptiveRelief - Portfolio managers of certain mutual funds grantedrelief from provision in securities legislation that prohibitsthem from knowingly causing any investment portfolio managedby them to purchase or sell securities of any issuer from orto the account of a responsible person or its associates, subjectto a number of conditions.

Applicable Ontario Statute

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

Instruments Cited

National Instrument 33-105 - Underwriting Conflicts;National Instrument 44-101 - Short Form Prospectus Distributions;National Instrument 81-102 - Mutual Funds.

IN THE MATTER OF

THE SECURITIES LEGISLATIONOF

BRITISH COLUMBIA, ALBERTA,

SASKATCHEWAN, ONTARIO,

QUEBEC, AND NEWFOUNDLAND &LABRADOR

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEWSYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

SCOTIA CASSELS INVESTMENTCOUNSEL LIMITED

RBC GLOBAL INVESTMENT MANAGEMENTINC.

NATCAN INVESTMENT MANAGEMENTINC.

TAL GLOBAL ASSET MANAGEMENTINC.

CM INVESTMENT MANAGEMENT INC.

GUARDIAN GROUP OF FUNDS LTD.

BMO HARRIS INVESTMENT MANAGEMENTINC.

BMO NESBITT BURNS INC.

JONES HEWARD INVESTMENT COUNSELINC.

SCOTIA CAPITAL INC.

(COLLECTIVELY, THE "PORTFOLIOMANAGERS")

MRRS DECISION DOCUMENT

WHEREAS the local securities regulatory authority or regulator (the "Decision Maker") in eachof British Columbia, Alberta, Saskatchewan, Ontario, Quebec, Nova Scotia, and Newfoundland (the "Jurisdictions") has received an application from the Portfolio Managers fora decision under the securities legislation of the Jurisdictions(the "Legislation") that the provision (the "Investment Prohibition") contained in the Legislation, which prohibitsa portfolio manager from knowingly causing any investment portfoliomanaged by it to purchase or sell securities of any issuer fromor to the account of a responsible person, any associate ofa responsible person or the portfolio manager (collectively,the "Related Persons"), does not apply to the PortfolioManagers, in connection with the purchase or sale (a "Trade")by mutual funds whose investment portfolios are managed by thePortfolio Managers (collectively, the "Managed Funds")of

i. debt securities issued or fully and unconditionallyguaranteed by the federal or provincial governments ("GovernmentDebt Securities"), or

ii. debt securities of an issuer other thanthe federal and provincial governments ("Non-GovernmentDebt Securities");

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

AND WHEREAS the Portfolio Managers haverepresented to the Decision Makers that::

1. Each Portfolio Manager currently acts asportfolio manager for one or more Managed Funds whose investmentobjectives permit them to invest in debt securities.

2. Except for Natcan Investment ManagementInc. ("NIMI") and TAL Global Asset Management Inc.("TAL"), the head office of each Portfolio Manageris in Toronto, Ontario. The head office of NIMI and TAL isin Montreal, Quebec.

3. In recent years, the amount of GovernmentDebt Securities available for investment in Canada has declinedsignificantly due to government deficit reduction programs.As a result, investors in debt securities have had to relyincreasingly on Non-Government Debt Securities. However, becauseof the limited supply of Non-Government Debt Securities inthe primary market, holders of outstanding Non-GovernmentDebt Securities have tended not to sell their holdings priorto the maturity date of their Non-Government Debt holdings.This has, in turn, led to the limited availability of Non-GovernmentDebt Securities in the secondary market. Moreover, becauseof their limited availability, the Non-Government Debt Securitiesthat are available in the secondary market are usually soldat prices that are higher than if they were purchased in theprimary market, assuming no change in the markets and in thestatus of the issuer.

4. The debt securities market is primarilya dealers' market where a dealer provides buy or sell pricequotes (as the case may be) and, if the price quotes are accepted,the resulting Trade is effected with the dealer acting asprincipal.

5. Most, if not all, of the Portfolio Managersor their associates or affiliates are the principal dealersin the Canadian debt securities market -- both primary andsecondary.

6. The Investment Prohibition, combined withthe circumstances described in paragraphs 3 and 4 above, hasmade it even more difficult for the Portfolio Managers toacquire debt securities for their Managed Funds in the secondarymarket.

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

AND WHEREAS each of the Decision Makersis satisfied that the test contained in the Legislation thatprovides the Decision Makers with the Jurisdiction to make theDecision has been met;

THE DECISION of the Decision Makers underthe Legislation is that the Investment Prohibition does notapply so as to enable each Portfolio Manager to cause its ManagedFunds to purchase Government Debt Securities or Non-GovernmentSecurities from, or sell such debt securities to, the accountof a Related Person other than a mutual fund, in the secondarymarket,

PROVIDED THAT

A. at the time of causing a Managed Fund toTrade in Government Debt Securities or Non-Government DebtSecurities pursuant to this Decision, the following conditionsare satisfied:

(1) the Trade

a. represents the business judgment ofthe Portfolio Manager uninfluenced by considerations otherthan the best interests of the Managed Fund, or

b. is, in fact, in the best interestsof the Managed Fund;

(2) the Trade is consistent with, or isnecessary to meet, the investment objective of the ManagedFund as disclosed in its simplified prospectus;

(3) the terms of the Trade are better thanthe terms quoted by one or more dealers who are neitheraffiliates nor associates of the Related Person (the "IndependentDealers") with whom the Trade is made;

(4) if the Trade is a purchase of Non-GovernmentDebt Securities,

a. the purchase is not made from the RelatedPerson during the 60-day period after the distributionof such Non-Government Debt Securities, if the RelatedPerson acted

i. as underwriter in the distributionof the Non-Government Debt Securities, or

ii. as a selling group member sellingmore than 5% of the underwritten securities;

b. the issuer of the Non-Government DebtSecurities is not a "related issuer" or "connectedissuer", as defined in National Instrument 33-105Underwriting Conflicts, of the Related Person;

c. the Related Person is not

i. the issuer of the Non-GovernmentDebt Securities, or

ii. a promoter of the issuer of theNon-Government Debt Securities; and

d. the Non-Government Debt Securitieshave been given, and continue to have, an "approvedrating" by an "approved rating organization"as such terms are defined in section 1.1 of NI 44-101- Short Form Prospectus Distributions;

B. prior to effecting any Trade pursuant tothis Decision,

(1) the simplified prospectus of the ManagedFund discloses that it may purchase or sell Government DebtSecurities or Non-Government Debt Securities from or tothe account of a Related Person pursuant to this Decision,and

(2) the annual information form of the ManagedFund describes the policies or procedures referred to inparagraph (C) below;

C. prior to effecting any Trade pursuant tothis Decision, the Managed Fund has in place written policiesor procedures to ensure that,

(1) there is compliance with the conditionsof this Decision,

(2) in connection with any Trade in GovernmentDebt Securities or Non-Government Debt Securities with aRelated Person,

a. each Managed Fund maintains an itemizeddaily record of all such Trades showing, for each Trade,

i. the name and principal amount ofthe debt securities,

ii. if the Trade is in Government DebtSecurities, the relevant benchmark Canada bond (the"Benchmark Bond"), the bid-ask price of theBenchmark Bond, and the price that was paid or receivedby the Managed Fund on the Trade,

iii. if the Trade is in Non-GovernmentDebt Securities, the relevant Benchmark Bond (or, inthe case of US$-Pay Non-Government Debt Securties, therelevant US Treasury Bond), the bid-ask price of theBenchmark Bond or US Treasury Bond, and the spread overthe Benchmark Bond US Treasury Bond that was paid orreceived by the Managed Fund on the Trade,

iv. the time and date of the Trade,and

v. the name of the dealer on the Trade;

b. the Portfolio Manager of each ManagedFund maintains written records of the quotations receivedfrom Independent Dealers, and each Managed Fund maintainsa daily consolidated record of the quotations (includingthe price, quantity, times and date) received from oneor more Independent Dealers, in respect of each Trademade with a Related Person;

c. the "manager", as definedin National Instrument 81-102 - Mutual Funds, conductsa timely review of each Managed Fund's Trades with RelatedPersons to confirm that each Trade

i. represented the business judgmentof the Portfolio Manager uninfluenced by considerationsother than the best interests of the Managed Fund, or

ii. was, in fact, in the best interestsof the Managed Fund; and

D. the following particulars of each Tradepursuant to this Decision are set out in a report certifiedby the Portfolio Manager and filed on SEDAR, in respect ofeach Managed Fund and no later than 30 days after the endof the month in which one or more such Trades were made:

(1) the issuer of the debt securities,

(2) the principal amount of debt securitiespurchased or sold by the Managed Fund,

(3) the price at which the purchase or salewas made,

(4) the Related Person with whom the Tradewas made, and

a. in the case of a Trade in GovernmentDebt Securities, the price paid or received by the ManagedFund, or

b. in the case of a Trade in Non-GovernmentDebt Securities, the spread over the relevant BenchmarkBond or US Treasury Bond that was paid or received bythe Managed Fund, and

(5) a certification by the Portfolio Managerthat the Trade

a. represented the business judgment ofthe Portfolio Manager uninfluenced by considerations otherthan the best interest of the Managed Fund, or

b. was, in fact, in the best interestsof the Managed Fund; and

E. this Decision, as it relates to the jurisdictionof a Decision Maker, will terminate after the coming intoforce of any legislation or rule of that Decision Maker dealingwith the matters regulated by section 4.2 of NI 81-102.

July 10, 2002.

"Harold P. Hands"                    "RobertL. Shirriff"