Securities Law & Instruments


Mutual Reliance Review System for ExemptiveRelief Applications - Exemption from the requirements of section62(2) provided in exceptional circumstances. Cancellation rightsgranted to new investors who purchased after the lapse date.

Statutes Cited

Securities Act, R.S.O., 1990 c. S.5, as amended,ss. 62(1), 62(1.1) 62(2) and 147.















(the "Fund")



WHEREAS the Canadian securities regulatoryauthority or regulator (the "Decision Maker") in eachof British Columbia, Alberta, Saskatchewan, Manitoba, Ontario,Quebec, New Brunswick, Prince Edward Island, Newfoundland andLabrador, Yukon Territory and Nunavut (the "Jurisdictions")has received an application (the "Application") fromCI Mutual Funds Inc. ("CI") in its capacity as managerof the Fund for a decision pursuant to the securities legislationof the Jurisdictions (the "Legislation") that thetime periods pertaining to the distribution of units of theFund pursuant to its simplified prospectus and annual informationform dated August 24, 2001 (collectively, the "CurrentProspectus") shall not apply to the Fund until such timeas a final receipt is obtained for a new prospectus of the Fundprovided that the pro forma simplified prospectus of the Fundwas filed by September 18, 2002;

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

AND WHEREAS CI has represented to theDecision Makers that:

1. CI is the manager of the Fund, which isa reporting issuer as defined in the Legislation.

2. On July 25, 2002, C.I. Fund ManagementInc., the parent company of CI, acquired Spectrum InvestmentManagement Limited and Clarica Diversico Ltd. which at thattime were the managers of approximately 88 mutual funds (includingthe Fund). The acquisition resulted in approximately 201 mutualfunds, in aggregate, under CI's management. The lapse dateof the simplified prospectuses and annual information formsunder which most CI mutual funds distributed their securitieswas July 31, 2002 and renewal filings for such prospectuseswere near completion. In anticipation of the need for additionaltime to reorganize the mutual fund's under CI's managementand complete all renewal prospectus filings, an applicationwas filed on July 19, 2002 to extend the lapse dates of suchprospectuses and the Current Prospectus.

3. The Fund distributed its units in eachprovince and territory of Canada pursuant to the Current Prospectus.The lapse date of the Current Prospectus under the Legislationwas August 24, 2002.

4. On August 23, 2002, an MRRS Decision Document(the "First Extension") was issued by the DecisionMakers which extended the time periods provided in the Legislationas they applied to the distribution of units of the Fund andof other mutual funds under CI's management as follows:

(a) in the case of certain mutual fundsthen expected to terminate on or about October 15, 2002(the "Terminating Funds"), to permit the continueddistribution of units of the Terminating Funds to theirexisting unitholders until October 15, 2002 (subject tocertain conditions) (the "Extension for TerminatingFunds"); and

(b) in the case of certain other mutualfunds then expected not to terminate (the "ContinuingFunds"), to the time periods that would be applicableif the lapse date for the distribution of units under theirprospectus was August 29, 2002, provided that a pro formasimplified prospectus in respect of the Continuing Fundswas filed by August 19, 2002 (the "Extension for ContinuingFunds").

5. A combined preliminary and pro forma simplifiedprospectus and a combined preliminary and pro forma annualinformation form (collectively, the "Continuing FundsPro Forma Prospectus") were filed on behalf of the ContinuingFunds on August 12, 2002 and August 14, 2002.

6. At the time the Continuing Funds Pro FormaProspectus was filed, the Fund was expected to be a TerminatingFund and therefore was not included in the Continuing FundsPro Forma Prospectus.

7. On or about August 20, 2002, CI determinedthat the Fund should not terminate and wished to continuethe distribution of units of the Fund as a Continuing Fund.The Continuing Funds Pro Forma Prospectus was refiled on August23, 2002 to include the Fund and the (final) simplified prospectusand annual information form (collectively, the "FinalProspectus") of the Continuing Funds (including the Fund)was filed on August 29, 2002.

8. The Fund did not fulfill the conditionof the Extension for Continuing Funds that the Fund's proforma prospectus be filed by August 19, 2002 and thereforethe Fund cannot rely on the Extension for Continuing Funds.

9. The Fund may not be entitled to continueto rely on the Extension for Terminating Funds for the unitsit distributes during the period (the "Interim Period")commencing on August 25, 2002 and ending on the date a receiptis issued for the Final Prospectus. The Application for thisDecision was filed on August 30, 2002.

10. Except for the Extension for TerminatingFunds, the Fund would have been included in the ContinuingFunds Pro Forma Prospectus or would have ceased the distributionof its units on the lapse date of the Current Prospectus.The Fund has since ceased the distribution of its units.

11. There have been no material changes inthe affairs of the Fund since the filing of the Current Prospectusother than those for which amendments have been filed. Accordingly,the Current Prospectus and the amendments thereto representcurrent information regarding the 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 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 pursuantto the Legislation is that the Fund is exempt from the timelimits provided by the Legislation for the filing of the renewalprospectus until such time as a final receipt is obtained forthe Final Prospectus, provided that:

(a) the final simplified prospectus of theFund was filed by September 18, 2002;

(b) all unitholders of record of the Fundin the Jurisdictions who purchase units of the Fund duringthe Interim Period ("Affected Unitholders") areprovided with the right (the "Cancellation Right")to cancel such trades within 20 business days of receiptof a statement (the "Statement") describing theCancellation Right and to receive, upon the exercise ofthe Cancellation Right, the purchase price paid on the acquisitionof such units and all fees and expenses incurred in effectingsuch purchase (the net asset value per unit on the dateof such a purchase by an Affected Unitholder is hereinafterdefined as the "Purchase Price per Unit");

(c) the Fund mails the Statement, a copyof this Decision, and a copy of the Final Prospectus toAffected Unitholders no later than October 3, 2002; and

(d) if the net asset value per unit of theFund on the date that an Affected Unitholder exercises theCancellation Right is less than the Purchase Price per Unit,CI shall reimburse the Fund for the difference between thePurchase Price per Unit and the net asset value per uniton the date on which such Affected Unitholder exercisesthe Cancellation Right.

September 18, 2002.

"Howard I. Wetston"                    "PaulM. Moore"