McLean Budden Limited et al.

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- approval for fund mergers under 5.5 of NI 81-102 -- relief needed because mergers will not meet pre-approval criteria -- continuing funds have different investment objectives than terminating funds and some mergers will not be tax deferred -- securityholders of terminating funds provided with timely and adequate disclosure regarding the mergers.

Applicable Legislative Provisions

National Instrument 81-102 Mutual Funds, ss. 5.5(1)(b), 5.6, 5.7(1)(b), 19.1.

March 2, 2012

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO

(the Jurisdiction)

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

McLEAN BUDDEN LIMITED

(MFS McLean Budden)

AND

SUN LIFE GLOBAL INVESTMENTS (CANADA) INC.

(Sun Life Global Investments)

AND

SUN LIFE McLEAN BUDDEN CANADIAN BOND FUND

McLEAN BUDDEN REAL RETURN BOND FUND

McLEAN BUDDEN GLOBAL BOND FUND

McLEAN BUDDEN LIFEPLAN® RETIREMENT FUND

McLEAN BUDDEN LIFEPLAN® 2020 FUND

McLEAN BUDDEN LIFEPLAN® 2030 FUND

(each, a Terminating Fund and collectively,

the Terminating Funds)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from MFS McLean Budden and Sun Life Global Investments for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) for approval of the mergers (the Mergers) of the Terminating Funds into the applicable Continuing Funds (as defined below) as set out in paragraph 11 below (the Exemption Sought).

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

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

(b) each of MFS McLean Budden and Sun Life Global Investments 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, Quebec, Nova Scotia, New Brunswick, Prince Edward Island, Newfoundland and Labrador, Northwest Territories, Yukon and Nunavut.

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. The following additional terms shall have the following meanings:

Continuing Funds means McLean Budden Fixed Income Fund, Sun Life Managed Conservative Portfolio, Sun Life Milestone 2020 Fund and Sun Life Milestone 2030 Fund;

Fund or Funds means, individually or collectively, the Terminating Funds and the Continuing Funds;

IRC means, in respect of each Fund, the independent review committee for the Fund;

Managers means, collectively, MFS McLean Budden and Sun Life Global Investments;

MB Funds means McLean Budden Real Return Bond Fund, McLean Budden Fixed Income Fund, McLean Budden Global Bond Fund, McLean Budden LifePlan® Retirement Fund, McLean Budden LifePlan® 2020 Fund and McLean Budden LifePlan® 2030 Fund;

NI 81-102 means National Instrument 81-102 Mutual Funds;

NI 81-107 means National Instrument 81-107 Independent Review Committee for Investment Funds;

Sun Life Global Investments Funds means Sun Life McLean Budden Canadian Bond Fund, Sun Life Managed Conservative Portfolio, Sun Life Milestone 2020 Fund and Sun Life Milestone 2030 Fund;

Tax Act means the Income Tax Act (Canada).

Representations

This decision is based on the following facts represented by MFS McLean Budden and Sun Life Global Investments:

1. MFS McLean Budden is a corporation continued under the laws of Canada. MFS McLean Budden is an indirect, majority-owned subsidiary of Sun Life Financial Inc., a public company listed on the Toronto Stock Exchange.

2. Sun Life Global Investments is a corporation incorporated under the laws of Canada. Sun Life Global Investments is an indirect wholly-owned subsidiary of Sun Life Financial Inc.

3. As both MFS McLean Budden and Sun Life Global Investments are subsidiaries of Sun Life Financial Inc., MFS McLean Budden and Sun Life Global Investments are affiliates.

4. MFS McLean Budden is the manager of each of the MB Funds and RBC Dexia Investor Services Trust is currently the trustee of the MB Funds. Effective on or about April 2, 2012, Sun Life Global Investments will become the trustee and manager of these Funds.

5. Sun Life Global Investments is the trustee and manager of the Sun Life Global Investments Funds.

6. Each Fund is an open-end mutual fund trust established under the laws of Ontario by a master trust agreement or a master declaration of trust.

7. Units of the MB Funds are currently qualified for sale by a simplified prospectus and annual information form dated April 4, 2011, as amended. Units of Sun Life McLean Budden Canadian Bond Fund are currently qualified for sale by a simplified prospectus and annual information form dated April 7, 2011, as amended. Units of Sun Life Milestone 2020 Fund and Sun Life Milestone 2030 Fund are currently qualified for sale by a simplified prospectus and annual information form dated August 24, 2011, as amended. Units of Sun Life Managed Conservative Portfolio are currently qualified for sale by a simplified prospectus and annual information form dated January 11, 2012.

8. Each of the Funds is a reporting issuer under applicable securities legislation of each province and territory of Canada. None of the Managers nor the Funds is in default of securities legislation in any province or territory of Canada.

9. Other than circumstances in which the securities regulatory authority of a province or territory of Canada has expressly exempted a Fund therefrom, each of the Funds follows the standard investment restrictions and practices prescribed by applicable securities legislation.

10. The net asset value for each class or each series of the Funds, as applicable, is calculated on a daily basis on each day that the Toronto Stock Exchange is open for trading.

11. The Terminating Funds will merge into the Continuing Funds as follows:

(a) Sun Life McLean Budden Canadian Bond Fund, McLean Budden Real Return Bond Fund and McLean Budden Global Bond Fund into McLean Budden Fixed Income Fund;

(b) McLean Budden LifePlan® Retirement Fund into Sun Life Managed Conservative Portfolio;

(c) McLean Budden LifePlan® 2020 Fund into Sun Life Milestone 2020 Fund; and

(d) McLean Budden LifePlan® 2030 Fund into Sun Life Milestone 2030 Fund.

12. The Merger of McLean Budden LifePlan® Retirement Fund into Sun Life Managed Conservative Portfolio will be a material change for this Continuing Fund, as the net asset value of the Continuing Fund is smaller than the net asset value of the Terminating Fund merging into it.

13. Each Manager, in respect of the Terminating Funds it manages, concluded that approval of the Mergers is required because:

(a) for each Merger, the fundamental investment objectives of each Continuing Fund are not, or may be considered not to be, "substantially similar" to the investment objectives of its corresponding Terminating Fund; and

(b) for the Merger of McLean Budden Real Return Bond Fund into McLean Budden Fixed Income Fund, the Merger of McLean Budden Global Bond Fund into McLean Budden Fixed Income Fund and the Merger of McLean Budden LifePlan® 2030 Fund into Sun Life Milestone 2030 Fund (collectively, the Taxable Mergers), each such Merger will not be a "qualifying exchange" within the meaning of the Tax Act or a tax deferred transaction under the Tax Act,

and therefore each Merger does not satisfy all of the criteria for pre-approved reorganizations and transfers set out in section 5.6 of NI 81-102.

14. Each Manager, in respect of the Funds it manages, will, except as noted in paragraph 13, comply with all of the other criteria for pre-approved reorganizations and transfers set out in section 5.6 of NI 81-102.

15. In the Merger of Sun Life McLean Budden Canadian Bond Fund into McLean Budden Fixed Income Fund, Series A units, Series F units and Series I units of the Terminating Fund will be exchanged for Class A units, Class F units (a new class to be created and qualified under a simplified prospectus) and Class O units of the Continuing Fund, respectively. Units of the Continuing Fund received by the Terminating Fund will be distributed to unitholders of the Terminating Fund on a dollar-for-dollar basis, with holders of Series A units, Series F units and Series I units of the Terminating Fund receiving Class A units, Class F units and Class O units of the Continuing Fund, respectively.

16. In the Merger of McLean Budden Real Return Bond Fund into McLean Budden Fixed Income Fund, Class C units and Class D units of the Terminating Fund will be exchanged for Class C units and Class D units of the Continuing Fund, respectively. Units of the Continuing Fund received by the Terminating Fund will be distributed to unitholders of the Terminating Fund on a dollar-for-dollar basis, with holders of Class C units and Class D units of the Terminating Fund receiving Class C units and Class D units of the Continuing Fund, respectively. Currently, McLean Budden Real Return Bond Fund does not have any Class A units, Class F units or Class O units outstanding and these classes are no longer offered for sale.

17. In the Merger of McLean Budden Global Bond Fund into McLean Budden Fixed Income Fund, Class A units, Class C units, Class D units and Class O units of the Terminating Fund will be exchanged for Class A units, Class C units, Class D units and Class O units of the Continuing Fund, respectively. Units of the Continuing Fund received by the Terminating Fund will be distributed to unitholders of the Terminating Fund on a dollar-for-dollar basis, with holders of Class A units, Class C units, Class D units and Class O units of the Terminating Fund receiving Class A units, Class C units, Class D units and Class O units of the Continuing Fund, respectively. Currently, McLean Budden Global Bond Fund does not have any Class F units outstanding and this class is no longer offered for sale.

18. Immediately upon the Merger of Sun Life McLean Budden Canadian Bond Fund, McLean Budden Real Return Bond Fund and McLean Budden Global Bond Fund into McLean Budden Fixed Income Fund, the Continuing Fund will be renamed Sun Life MFS McLean Budden Canadian Bond Fund, and its Class A, Class C, Class D, Class F and Class O units will be reclassified as Series A, Series I, Series D, Series F and Series I units, respectively.

19. In the Merger of McLean Budden LifePlan® Retirement Fund into Sun Life Managed Conservative Portfolio, Class A units and Class VMD units of the Terminating Fund will be exchanged for Series A units of the Continuing Fund, and Class O units of the Terminating Fund will be exchanged for Series I units of the Continuing Fund. Units of the Continuing Fund received by the Terminating Fund will be distributed to unitholders of the Terminating Fund on a dollar-for-dollar basis, with holders of Class A units and Class VMD units of the Terminating Fund receiving Series A units of the Continuing Fund and holders Class O units of the Terminating Fund receiving Series I units of the Continuing Fund. Currently, McLean Budden LifePlan® Retirement Fund does not have any Class F units outstanding and this class is no longer offered for sale.

20. In the Merger of McLean Budden LifePlan® 2020 Fund into Sun Life Milestone 2020 Fund, Class A units, Class VMD units and Class O units of the Terminating Fund will be exchanged for Series A units of the Continuing Fund. Units of the Continuing Fund received by the Terminating Fund will be distributed to unitholders of the Terminating Fund on a dollar-for-dollar basis, with holders of Class A units, Class VMD units and Class O units of the Terminating Fund receiving Series A units of the Continuing Fund. Currently, McLean Budden LifePlan® 2020 Fund does not have any Class F units outstanding and this class is no longer offered for sale.

21. In the Merger of McLean Budden LifePlan® 2030 Fund into Sun Life Milestone 2030 Fund, Class A units, Class VMD units and Class O units of the Terminating Fund will be exchanged for Series A units of the Continuing Fund. Units of the Continuing Fund received by the Terminating Fund will be distributed to unitholders of the Terminating Fund on a dollar-for-dollar basis, with holders of Class A units, Class VMD units and Class O units of the Terminating Fund receiving Series A units of the Continuing Fund. Currently, McLean Budden LifePlan® 2030 Fund does not have any Class F units outstanding and this class is no longer offered for sale.

22. The portfolios and other assets of each Terminating Fund to be acquired by the applicable Continuing Fund arising from the Mergers are currently, or will be, acceptable, on or prior to the effective date of the Mergers, to the portfolio advisors of the applicable Continuing Fund and are or will be consistent with the investment objectives of the applicable Continuing Fund.

23. No sales charges will be payable in connection with the acquisition by a Continuing Fund of the investment portfolio of the applicable Terminating Fund.

24. Unitholders of a Terminating Fund will continue to have the right to redeem units of the Terminating Fund for cash at any time up to the close of business on the business day immediately prior to the effective date of the Mergers.

25. An amendment to the simplified prospectus and annual information form of the Terminating Funds, other than Sun Life McLean Budden Canadian Bond Fund, was filed via SEDAR on December 15, 2011 with respect to the proposed Mergers and a material change report was filed via SEDAR on December 16, 2011. An amendment to the simplified prospectus and annual information form of Sun Life McLean Budden Canadian Bond Fund was filed via SEDAR on December 12, 2011 with respect to the proposed Merger and a material change report was filed via SEDAR on December 12, 2011.

26. As required by NI 81-107, the terms of each Merger were presented to the respective IRC of the Funds for its review and recommendation. The IRC reviewed the potential conflict of interest matters related to the applicable Merger and has determined that each proposed Merger, if implemented, would achieve a fair and reasonable result for the applicable Funds.

27. A notice of meeting, a management information circular and a proxy (collectively, meeting materials) in connection with meetings of unitholders were mailed to unitholders of the Terminating Funds and of Sun Life Managed Conservative Portfolio. The meeting materials were mailed to unitholders commencing on or about February 28, 2012 and have been filed via SEDAR.

28. Unitholders of the Terminating Funds and of Sun Life Managed Conservative Portfolio will be asked to approve the Mergers at meetings to be held on or about March 23, 2012.

29. Each of the Mergers, other than the Taxable Mergers, will be effected on a tax-deferred basis.

30. For each Taxable Merger, the Merger must be effected on a taxable basis because the applicable Terminating Fund is not a "mutual fund trust" under the Tax Act and therefore the Merger is not eligible to be effected on a tax-deferred basis.

31. Sun Life Global Investments will pay for the costs of the Mergers. These costs consist mainly of brokerage charges associated with the Merger related trades that occur both before and after the date of the Mergers and legal, proxy solicitation, printing, mailing and regulatory fees.

32. If the requisite approvals are obtained, each Terminating Fund will merge into the applicable Continuing Fund on or about the close of business on March 30, 2012. If unitholder approval for the merger of McLean Budden Real Return Bond Fund into McLean Budden Fixed Income Fund or McLean Budden Global Bond Fund into McLean Budden Fixed Income Fund is not obtained, the applicable Terminating Fund will be terminated on or about May 31, 2012. If unitholder approval is not obtained for any of the other Mergers, it is the current intention of Sun Life Global Investments that the remaining Terminating Funds will continue to operate.

33. The following steps will be carried out to effect each Merger:

(a) Prior to the date of the Merger, each applicable Terminating Fund will sell securities in its portfolio that do not meet the investment objectives and investment strategies of the applicable Continuing Fund, if any. As a result, a Terminating Fund may temporarily hold cash or money market instruments and may not be fully invested in accordance with its investment objectives for a brief period of time prior to the relevant Merger. It is anticipated that McLean Budden LifePlan® Retirement Fund, McLean Budden LifePlan® 2020 Fund and McLean Budden LifePlan® 2030 Fund will each sell all or substantially all of its portfolio assets prior to the applicable Merger;

(b) The value of each Terminating Fund's portfolio and other assets will be determined at the close of business on the effective date of the relevant Merger in accordance with its trust agreement or declaration of trust, as applicable;

(c) The applicable Continuing Fund will acquire the investment portfolio and other assets of each applicable Terminating Fund in exchange for units of the Continuing Fund;

(d) The applicable Continuing Fund will not assume liabilities of any applicable Terminating Fund and each Terminating Fund will retain sufficient assets to satisfy its estimated liabilities, if any, as of the date of the relevant Merger;

(e) The units of the applicable Continuing Fund received by each Terminating Fund will have an aggregate net asset value equal to the value of the applicable Terminating Fund's portfolio assets and other assets that the Continuing Fund is acquiring, which units will be issued at the applicable series net asset value per unit as of the close of business on the effective date of the relevant Merger;

(f) Each Terminating Fund will distribute to its unitholders a sufficient amount of its net income and net realized capital gains so that it will not be subject to tax under Part I of the Tax Act for its taxation year ending on the date of the Merger;

(g) Immediately thereafter, the units of the applicable Continuing Fund received by each Terminating Fund will be distributed to unitholders of the Terminating Fund on a dollar for dollar basis in exchange for their units in the Terminating Fund, with unitholders of each class or each series of the Terminating Fund receiving the corresponding class or series of units of the Continuing Fund in the manner described above; and

(h) As soon as reasonably possible following the relevant Merger, each Terminating Fund will be wound up.

34. Units of each of the Funds are qualified investments under the Tax Act for registered retirement savings plans, registered retirement income funds, tax-free savings accounts, registered education savings plans, deferred profit sharing plans and registered disability savings plans.

35. Following each Merger, the applicable Terminating Fund will be wound up as soon as reasonably possible and the applicable Continuing Fund will continue as publicly offered open-end mutual fund governed by the laws of Ontario.

36. Following each Merger, units of the applicable Continuing Fund received by unitholders of the Terminating Fund as a result of the Merger will have the same sales charge option and, for units purchased under the deferred sales charge option or the low load option (such options will only be applicable to unitholders of Sun Life McLean Budden Canadian Bond Fund), remaining deferred sales charge schedule as their units in the Terminating Fund.

37. Each Manager, in respect of the Terminating Funds it manages, believes that the applicable Merger will be beneficial to unitholders of each Terminating Fund and Continuing Fund for the following reasons:

(a) In the case of the Merger of McLean Budden Real Return Bond Fund into McLean Budden Fixed Income Fund and the Merger of McLean Budden Global Bond Fund into McLean Budden Fixed Income Fund, there will be a savings in brokerage charges for these Terminating Funds over a straight liquidation of the portfolio of securities of that Fund if it were terminated;

(b) Unitholders of each Terminating Fund and each Continuing Fund will enjoy increased economies of scale and potentially lower aggregate Fund operating expenses (which are borne indirectly by unitholders) as part of a larger combined Continuing Fund. Sun Life McLean Budden Canadian Bond Fund is responsible for the payment of its operating expenses. Currently, each of the other Terminating Funds (which are all MB Funds) do not pay such expenses, as they have been absorbed by the Manager. As disclosed in the simplified prospectus of the MB Funds, the Manager has the authority to cease absorbing these expenses upon providing prior written notice to unitholders. Unitholders of each such Terminating Fund have been sent a notice that, effective on or about April 2, 2012, Sun Life Global Investments, as the new manager of the MB Funds, will cease absorbing the expenses of these Funds. As a result, administrative expenses either currently are (in the case of Sun Life McLean Budden Canadian Bond Fund), or will be (in the case of the other Terminating Funds), payable by the Terminating Funds. Accordingly, if the Terminating Funds that are MB Funds were to continue after April 2, 2012, there will be an increase in the management expense ratios of such Funds. The Mergers are expected to result in increased economies of scale for each Terminating Fund because the combined Continuing Fund will have a greater asset base following the Merger over which to distribute the costs of operating a mutual fund and thus will result in a potentially lower management expense ratio to be borne by unitholders of each Terminating Fund as part of the larger Continuing Fund compared to the management expense ratio of the Terminating Fund following April 2, 2012;

(c) Each Continuing Fund will have a portfolio of greater value, allowing for increased portfolio diversification opportunities, which may lead to increased returns and/or a reduction of risk;

(d) Each Continuing Fund, as a result of its greater size, will benefit from a larger profile in the marketplace by potentially attracting more investors and enabling it to maintain a "critical mass"; and

(e) A line-up consisting of fewer mutual funds that target similar types of investors will allow the Manager to concentrate its marketing efforts to attract additional assets in the Continuing Funds. Ultimately this benefits unitholders because it ensures that each Continuing Fund remains a viable, long-term investment vehicle for existing and potential investors.

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 the Exemption Sought is granted.