Investment Planning Counsel of Canada Limited and IPC Portfolio Services Inc.

Headnote

NP 11-203 -- Application for exemption from the formal take-over bid and issuer bid requirements under applicable securities legislation as well as relief from the insider and issuer bid requirements under MI 61-101 -- offeree issuer cannot satisfy non-reporting issuer exemptions from formal take-over and issuer bid requirements given that advisors are not technically employees for the purposes of the exemptions -- relief granted subject to conditions.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 93.1 to 99, 104(2)(c).

OSC Rule 62-504 Take-over Bids and Issuer Bids.

MI 61-101 Protection of Minority Security Holders in Special Transactions.

October 13, 2009

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

THE PROVINCE OF ONTARIO

(the Jurisdiction)

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

INVESTMENT PLANNING COUNSEL

OF CANADA LIMITED AND

IPC PORTFOLIO SERVICES INC.

(the Filers)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filers:

(a) for a decision under the securities legislation of the Jurisdiction (the Legislation) that the take-over bid and issuer bid requirements contained in the Legislation (the Takeover Bid and Issuer Bid Provisions) and the requirements related to insider bids and issuer bids set out in Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (the MI 61-101 Provisions and collectively with the Takeover Bid and Issuer Bid Provisions, the Takeover Bid and Issuer Bid Requirements) do not apply with respect to certain transfers of common shares of IPC Portfolio Services Inc. (IPC Portfolio); and

(b) for a decision under the Legislation that the application and this decision (the Confidential Material) be kept confidential and not be made public until the earlier of: (i) the date the Filers advise the principal regulator that there is no need for the Confidential Material to remain confidential; and (ii) the date that is 30 days after the date of this decision.

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):

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

(b) the Filers have provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (the MI 11-102) is intended to be relied upon in all provinces and territories of Canada other than Ontario.

Interpretation

Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.

Representations

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

1. Investment Planning Counsel of Canada Limited (IPCCL) was formed by articles of amalgamation under the Business Corporations Act (Ontario) on January 1, 2009. Its registered and principal office is located in Toronto, Ontario.

2. IPC Portfolio was incorporated under the Business Corporations Act (Ontario) on June 30, 2009 and is currently a wholly-owned subsidiary of IPCCL. Its registered and principal office is located in Toronto, Ontario.

3. Neither IPCCL nor IPC Portfolio is and neither has ever been a reporting issuer, or its equivalent, in any of the provinces or territories of Canada.

4. IPCCL is an indirect wholly-owned subsidiary of IGM Financial Inc. (IGM). IGM was incorporated under the Canada Business Corporations Act on August 3, 1978 and its capital structure was reorganized by Articles of Amendment effective September 19, 1986. Its name was changed to "IGM Financial Inc." by Articles of Amendment effective April 30, 2004 and its Articles were re-stated effective April 30, 2004. IGM's registered and head office is located in Winnipeg, Manitoba. IGM is a reporting issuer, or its equivalent, in all of the provinces and territories of Canada. IGM's common shares and preferred shares, series A are listed on the Toronto Stock Exchange under the symbols "IGM" and "IGM.PR.A", respectively. IGM is not on the list of defaulting reporting issuers, or its equivalent, in any jurisdiction in which such a list is maintained.

5. Counsel Group of Funds Inc. (Counsel) was formed by articles of amalgamation under the Business Corporations Act (Ontario) on January 1, 2008 and is a wholly-owned subsidiary of IPC Portfolio. Counsel is registered as a portfolio manager in the Province of Ontario.

6. IPCCL through certain of its subsidiaries which are also affiliates of IPC Portfolio and Counsel conducts business across Canada through a network of financial advisors (the Advisors) who are affiliated with such subsidiaries. At the date hereof, there are approximately 656 Advisors. The Advisors are engaged in, among other things, the sale of mutual funds which are managed by Counsel. All Advisors have a written contract with an affiliate of IPC Portfolio pursuant to which they devote a substantial amount of their time and attention to the business of such affiliate as generally required by applicable self regulatory organizations. In accordance with such requirements, the written contract that each Advisor has with an affiliate of IPC Portfolio provides that an Advisor cannot engage in any business activity other than providing services to the affiliate of IPC Portfolio without first obtaining the consent of the affiliate of IPC Portfolio, which consent would be subject to receiving all applicable regulatory consents or approvals.

7. As the Filers wish to provide an opportunity to employees and Advisors to subscribe for an equity interest in IPC Portfolio from time to time, employees of IPC Portfolio or an affiliate of IPC Portfolio, Advisors and certain of their permitted assigns will be permitted to subscribe for common shares of IPC Portfolio (Shares) for cash, not to exceed 15% of the issued and outstanding shares of IPC Portfolio.

8. Other than IPCCL, each subscriber and future holder of Shares (the Shareholders) will be an employee of IPC Portfolio or an affiliate of IPC Portfolio, an Advisor or certain of their permitted assigns. For this purpose, a permitted assign of an employee or Advisor will be limited to a holding company, the sole shareholder of which is the employee or Advisor, a registered retirement savings plan or registered retirement income fund of the employee or Advisor and a trustee, custodian or administrator acting on behalf of, or for the benefit of the employee or Advisor or the estate of the employee or Advisor (collectively, the Permitted Assigns).

9. All Shareholders will be required to enter into a shareholders' agreement (the Shareholders' Agreement) with IPC Portfolio, IPCCL and all other Shareholders.

10. The proposed terms of the Shareholders' Agreement include: (i) the right of each Shareholder to require IPCCL to purchase its Shares from time to time; (ii) the right of IPCCL to purchase Shares from each Shareholder from time to time; (iii) an obligation of each Shareholder to sell its Shares to IPCCL or, at the option of IPCCL, to one of IPCCL's affiliates or to IPC Portfolio, and a corresponding obligation of IPCCL or, at the option of IPCCL, one of its affiliates or IPC Portfolio, to purchase Shares from each Shareholder upon the occurrence of certain triggering events, such as death, incapacity, termination, voluntary departure and material breach; and (iv) the right of IPCCL to purchase or, at the option of IPCCL, to cause one of its affiliates or IPC Portfolio to purchase, Shares from each Shareholder and the corresponding obligation of each Shareholder to sell its Shares to IPCCL or, at the option of IPCCL, to one of its affiliates or to IPC Portfolio, upon the occurrence of certain triggering events, such as bankruptcy or insolvency and certain events of default of the Shareholder (collectively, the Transfers).

11. The Shareholders' Agreement will contain an acknowledgement from each Shareholder that the Shareholder is aware that IPC Portfolio is not and will not become a reporting issuer and that IPC Portfolio will not be subject to the continuous disclosure requirements under the Legislation.

12. Pursuant to the terms of the Shareholders' Agreement, each Shareholder will receive copies of IPC Portfolio's annual financial statements.

13. The Legislation provides an exemption from the Takeover Bid and Issuer Bid Requirements in respect of a non-reporting issuer if:

(a) the offeree issuer is not a reporting issuer;

(b) there is no published market for the securities that are the subject of the bid; and

(c) the number of security holders of that class of securities at the commencement of the bid is not more than 50, exclusive of holders who (i) are in the employment of the offeree issuer or an affiliate of the offeree issuer, or (ii) were formerly in the employment of the offeree issuer or in the employment of an entity that was an affiliate of the offeree issuer at the time of that employment, and who while in that employment were, and have continued after that employment to be, security holders of the offeree issuer.

14. Unless relief is granted, the Transfers will be subject to the Takeover Bid and Issuer Bid Requirements because IPC Porfolio's purchase of Shares from the Shareholders will be issuer bids and the purchase by IPCCL or an affiliate of IPCCL of Shares from the Shareholders will be takeover bids and any such Transfers will not be exempt under the Legislation as there may be more than 50 Shareholders, exclusive of employees.

15. If the Legislation treated the Advisors and Permitted Assigns in the same manner as employees, the Transfers would be exempt from the Takeover Bid and Issuer Bid Requirements.

Decision

The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.

The decision of the principal regulator under the Legislation is that:

(a) the Takeover Bid and Issuer Bid Provisions shall not apply to the Transfers pursuant to the Shareholders' Agreement provided that at the time of the applicable Transfer:

(i) IPC Portfolio is not a reporting issuer;

(ii) there is no published market for the Shares; and

(iii) the number of holders of Shares is not more than 50, exclusive of holders who:

(A) are in the employment of IPC Portfolio or an affiliate of IPC Portfolio, are Advisors or are Permitted Assigns; or

(B) were formerly in the employment of IPC Portfolio or in the employment of an entity that was an affiliate of IPC Portfolio at the time of that employment, and who while in that employment were, and have continued after that employment to be, security holders of IPC Portfolio directly or through a Permitted Assign or were formerly Advisors and who while Advisors were, and have continued thereafter to be, security holders of IPC Portfolio directly or through a Permitted Assign.

(b) the Confidential Material will be kept confidential and not be made public until the earlier of: (i) the date the Filers advise the principal regulator that there is no need for the Confidential Material to remain confidential; and (ii) the date that is 30 days after the date of this decision.

The decision of the principal regulator under the Legislation is that:

(a) the MI 61-101 Provisions shall not apply to the Transfers pursuant to the Shareholders' Agreement provided that at the time of the applicable Transfer, the conditions of the above-noted decision of the principal regulator in respect of the Takeover Bid and Issuer Bid Provisions are satisfied; and

(b) the Confidential Material will be kept confidential and not made public until the earlier of: (i) the date the Filers advise the principal regulator that there is no need for the Confidential Material to remain confidential; and (ii) the date that is 30 days after the date of this decision.