O'Leary Funds Management LP and O'Leary Founder's Series Income & Growth Fund

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Relief granted to permit a closed-end fund converting into a mutual fund to show pre-conversion past performance in sales communications; relief also granted from the prohibition against reimbursement of organization costs, a new mutual fund requirement -- the closed-end fund has always complied with the investment restrictions of NI 81-102 and the Fund as an adequate level of assets for its operations. The Fund is a new mutual fund but not a new fund.

Applicable Legislative Provisions

National Instrument 81-102 Mutual Funds, ss. 3.3 and 15.6(a) & (d) and 19.1.

[Translation]

December 21, 2010

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

QUEBEC AND ONTARIO

(the Jurisdictions)

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

O'LEARY FUNDS MANAGEMENT LP

(the "Manager" or the "Filer")

AND

O'LEARY FOUNDER'S SERIES INCOME & GROWTH FUND

(the "Fund")

DECISION

Background

The securities regulatory authority or regulator in each of the Jurisdictions (the "Decision Maker") has received an application from the Filer and the Fund for a decision under the securities legislation of the Jurisdictions (the "Legislation") granting exemptive relief to the Fund, pursuant to section 19.1 of National Instrument 81-102 - Mutual Funds ("NI 81-102"), from the following provisions of NI 81-102:

(a) the prohibition contained in section 3.3 to permit the costs of preparation and filing a preliminary simplified prospectus, preliminary annual information form, initial simplified prospectus or annual information form to be borne by the Fund; and

(b) the prohibitions in subsections 15.6(a) and (d) to permit the Fund to show its historic performance data in sales communications notwithstanding that it has not, as a mutual fund, distributed its securities under a simplified prospectus for 12 consecutive months and to permit sales communications relating to the Fund to contain performance data of the Fund for the period prior to the Fund offering its securities under a simplified prospectus,

(collectively, the "Requested Relief").

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

(a) the Autorité des marchés financiers is the principal regulator for this application;

(b) the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 - Passport System ("MI 11-102") is intended to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, New Brunswick, Nova Scotia and Prince Edward Island, Newfoundland and Labrador (the "Jurisdictions"); and

(c) the decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.

Interpretation

Terms defined in NI 81-102, National Instrument 14-101 -- Definitions and MI 11-102 have the same meaning if used in this decision, unless they are defined in this section. Certain other defined terms have the meanings given to them above or below.

Conversion means the conversion of the Fund from a closed - end investment fund into a mutual fund on November 1, 2010;

Conversion Date means the date upon which the Conversion was effected, being close of business on November 1, 2010.

Representations

This decision is based on the following facts represented by the Filer and the Fund:

(a) The Manager is a limited partnership formed under the laws of Ontario with its head office located in Montreal, Quebec.

(b) The Manager acts as manager and trustee of the Fund.

(c) The Fund was established as a closed - ended investment fund under the laws of Ontario pursuant to a declaration of trust dated September 28, 2009 which was amended and restated on August 9, 2010 and further amended and restated on November 1, 2010 (the "Declaration of Trust").

(d) The Fund is a reporting issuer under the securities legislation of each of the provinces of Canada.

(e) Prior to Conversion, units of the Fund were distributed pursuant to an initial public offering under a long form prospectus dated September 28, 2009 (the "Long Form Prospectus") and were listed and traded on the Toronto Stock Exchange (the "TSX").

(f) As of the Conversion Date, there were 13,536,185 units of the Fund outstanding with a net asset value ("NAV") per unit of $11.93, for an aggregate NAV of the Fund of $161,518,157.

(g) Since its inception, the Fund has complied with the investment restrictions contained in NI 81-102.

(h) Neither the Manager nor the Fund is in default of any of the requirements of applicable securities legislation in any of the Jurisdictions.

(i) The Declaration of Trust and the Long Form Prospectus provided that, effective at the close of business on the Conversion Date, units of the Fund would be delisted from any stock exchange on which they were then listed and the Fund would convert to an open -- ended mutual fund.

(j) A press release announcing the Conversion was issued on October 12, 2010 and was filed, along with the related material change report, on SEDAR on that date.

(k) On the Conversion Date,

(i) the Fund converted to an open-ended mutual fund;

(ii) units of the Fund were delisted from the TSX;

(iii) the capital of the Fund was divided into series and all outstanding units of the Fund were re-designated as "Founder's series units";

(iv) the management fee for the Founder's series was increased from 1.5% to 1.95%, by reducing the portion of the management fee retained by the Filer to 0.95% and adding an amount equal to a servicing fee of 1.0%, which is payable out of the management fee; and

(v) the consulting agreement ("Consulting Agreement") between Stanton Asset Management Inc. ("Portfolio Manager"), the portfolio manager of the Fund, and Savtrev, Inc. ("O'Leary"), of which Mr. Kevin O'Leary is Chairman, was terminated.

(l) The Consulting Agreement was considered a material contract of the Fund as a result of the close relationship between Mr. Kevin O'Leary, O'Leary and the Filer and thus, in light of these relationships, the termination of the Consulting Agreement was treated as a material change to the Fund.

(m) A press release confirming the Conversion was completed as of the close of business on the Conversion Date was issued on November 2, 2010 and was filed, along with the related material change report, on SEDAR on that date.

(n) The Filer filed a preliminary simplified prospectus and annual information form dated September 28, 2010 on SEDAR to qualify series A, F, Founder's series, H, I and M units of the Fund under National Instrument 81-101 - Mutual Fund Prospectus Disclosure in each of the Jurisdictions. A receipt was issued for the final simplified prospectus and the annual information form dated November 1, 2010 on November 2, 2010.

(o) Following the Conversion, the investment practices of the Fund will continue to comply in all respects with the requirements of Part 2 of NI 81-102, except to the extent that the Fund has received permission from the Canadian securities regulatory authorities to deviate therefrom.

(p) The Filer expects that the Fund will be managed substantially similarly post-Conversion as it was pre-Conversion. Any changes between the Fund pre- and post- Conversion that could have materially affected the performance of the Fund, including the increase in the overall fees charged in respect of the Founder's series, as well as how these changes could have affected performance had they been in effect throughout the performance measurement period, will be disclosed in sales communications pertaining to the Fund.

(q) The Filer has determined that the termination of the Consulting Agreement will not materially affect the performance of the Fund, as the Portfolio Manager remains responsible for the investment decisions of the Fund and O'Leary's role was limited to identifying markets and investment opportunities that could potentially be of interest to the Portfolio Manager. The Portfolio Manager has always generated investment ideas from many sources and made investment decisions in particular securities based upon its own research and analysis and has continued to do so following the termination of the Consulting Agreement.

(r) Without the Requested Relief:

(i) none of the Conversion costs associated with the preparation and filing of the preliminary simplified prospectus, preliminary annual information form, initial simplified prospectus or annual information form may be borne by the Fund;

(ii) sales communications pertaining to the Fund would not be permitted to include performance data until November 2, 2011, being the date when the Fund has distributed securities, as a mutual fund, under a simplified prospectus in a jurisdiction for 12 consecutive months; and

(iii) sales communications pertaining to the Fund would only be permitted to include performance for the period commencing after November 2, 2010, being the date on which the Fund commenced distributing securities, as a mutual fund, under a simplified prospectus.

Decision

Each of the Decision Makers is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.

The decision of the Decision Makers under the Legislation is that the Requested Relief is granted.