Mackenzie Financial Corporation et al. - MRRS Decision

Headnote

MRRS -- Exemption granted from requirements contained in s. 2.5(2)(a) and 2.5(2)(c) of NI-81-102. Exemption will permit Top Fund to invest in Bottom Fund that is a conventional mutual fund listed on the Irish Stock Exchange. Exemption subject to conditions including: (1) investments to be limited to de minimus amounts; (2) Bottom Fund remains subject to Irish regulations; and (3) Irish regulations contain investment restrictions similar to those contained in NI 81-102.

Rule Cited

National Instrument 81-102 Mutual Funds, ss. 2.5(2)(a), 2.5(2)(c).

January 11, 2006

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

BRITISH COLUMBIA, ALBERTA, SASKATCHEWAN,

MANITOBA, ONTARIO, QUEBEC, NEW BRUNSWICK,

NOVA SCOTIA, PRINCE EDWARD ISLAND,

NEWFOUNDLAND AND LABRADOR, YUKON TERRITORY,

NORTHWEST TERRITORY AND NUNAVUT TERRITORY

(THE "JURISDICTIONS")

AND

IN THE MATTER OF THE

MUTUAL RELIANCE REVIEW SYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

MACKENZIE FINANCIAL CORPORATION

("MACKENZIE")

AND

IN THE MATTER OF

MACKENZIE SELECT MANAGERS FUND,

MACKENZIE SELECT MANAGERS CAPITAL CLASS

AND MACKENZIE UNIVERSAL WORLD SCIENCE &

TECHNOLOGY CAPITAL CLASS (THE "TOP FUNDS")

MRRS DECISION DOCUMENT

Background

The local securities regulatory authority or regulator (the "Decision Maker") in each of the Jurisdictions has received an application (the "Application") from Mackenzie and the Top Funds (the "Filers") for a decision under the securities legislation of the Jurisdictions (the "Legislation") exempting the Top Funds from:

• the prohibition contained in paragraph 2.5(2)(a) of National Instrument NI 81-102 against a mutual fund investing in another mutual fund that is not subject to National Instrument 81-101 or National Instrument 81-102; and

• the prohibition contained in paragraph 2.5(2)(c) of NI 81-102 against a mutual fund investing in another mutual fund's securities where those securities are not qualified for distribution in the Jurisdictions.

(collectively, the "Requested Relief").

Under the Mutual Reliance Review System for Exemptive Relief Applications:

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

(b) this MRRS decision document evidences the Decision of each Decision Maker.

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 Filers:

Mackenzie

1. Mackenzie is a corporation amalgamated under the laws of Ontario. Mackenzie is the manager and portfolio advisor to the Top Funds, and is also trustee to Mackenzie Select Managers Fund. The head office of Mackenzie is located in Ontario.

The Top Funds

2. Mackenzie Select Managers Fund is an open-ended mutual fund trust governed under the laws of Ontario. Securities of this fund are qualified for distribution in the Jurisdictions by way of a simplified prospectus and annual information form.

3. Mackenzie Select Managers Capital Class and Mackenzie Universal World Science & Technology Capital Class are each separate classes of shares of Mackenzie Financial Capital Corporation, a mutual fund corporation governed under the laws of Ontario. Securities of these funds are qualified for distribution in the Jurisdictions by way of a simplified prospectus and annual information form.

4. The investment objectives and/or investment strategies of the Top Funds are to seek long-term capital through global investments in, among other things, equity securities of companies in the field of technology.

Polar Capital LLP

5. Polar Capital LLP ("Polar") is the sole sub-advisor to Mackenzie Universal World Science & Technology Capital Class, and is one of four sub-advisors to both Mackenzie Select Managers Fund and Mackenzie Select Managers Capital Class.

The Underlying Fund

6. Polar is also the investment manager of the Global Technology Fund (the "Underlying Fund"). The Underlying Fund is a class of shares of Polar Capital Funds plc (the "Company"), an open-ended investment company with variable capital organized under the laws of Ireland. The Company has been authorized by and is supervised by the Irish Financial Services Regulatory Authority and is listed on the Irish Stock Exchange.

7. The investment objective of the Underlying Fund is long-term capital growth by way of investing in a globally diversified portfolio of technology companies.

8. The Underlying Fund is a conventional mutual fund. It would not be considered to be a hedge fund. The Company has filed a prospectus with the Irish Financial Services Regulatory Authority that contains disclosure regarding the Underlying Fund. The Company and the Underlying Fund are subject to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2003 (S.I. No. 211 of 2003) of Ireland as amended and any notices issued by the Irish Financial Services Regulatory Authority (collectively, the "Irish Regulations"). The Irish Regulations include, amongst other requirements, investment and borrowing restrictions that are similar in many respects to those contained in NI 81-102.

9. The Underlying Fund is not the only means by which Ireland permits investment in the securities of its issuers.

10. Each of Mackenzie Select Managers Fund and Mackenzie Select Managers Capital Class will not invest more than 5% of their net assets taken at market value at the time of acquisition of such assets in the Underlying Fund. Mackenzie Universal World Science & Technology Capital Class will not invest more than 10% of its net assets taken at market value at the time of acquisition of such assets in the Underlying Fund.

Decision

Each of the Decision Makers 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 Makers under the Legislation is that the Requested Relief is granted for so long as:

(a) The Company is listed on the Irish Stock Exchange and the Company and the Underlying Fund are subject to the Irish Regulations.

(b) The Irish Regulations include investment and borrowing restrictions that are similar in many respects to those contained in NI 81-102.

(c) The Top Funds each limit their respective investments in the Underlying Fund as described in paragraph 10 above.

(d) The investment by the Top Funds in the Underlying Fund is disclosed in their respective simplified prospectus.