Macquarie Emerging Markets Infrastructure Income Fund and Connor, Clark & Lunn Capital Markets Inc.

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Investment fund and its manager exempted from the dealer registration requirement for certain limited trading activities to be carried out by these parties in connection with a warrant offering by the investment fund -- the limited trading activities involve: i) the forwarding of a short form (final) prospectus, and the distribution of warrants to acquire securities of the fund to existing holders of fund securities, and ii) the subsequent distribution of securities to holders of the warrants, upon their exercise of the warrants, through an appropriately registered dealer.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 25(1), 74(1).

Multilateral Instrument 11-102 Passport System, s. 4.7(1).

National Instrument 45-106 Prospectus and Registration Exemptions, ss. 2.1, 3.1, 3.42, 8.5.

National Instrument 31-103, Registration Requirements and Exemptions, s. 8.5.

May 11, 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

MACQUARIE EMERGING MARKETS

INFRASTRUCTURE INCOME FUND

(the Fund)

AND

CONNOR, CLARK & LUNN CAPITAL MARKETS INC.

(the Manager) (collectively, the Filers)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filers for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) for an exemption from the dealer registration requirements in the Legislation in respect of certain trades (the Warrant Offering Activities) to be carried out by the Manager and the Investment Manager (as defined below), on behalf of the Fund, in connection with a proposed distribution (the Warrant Offering) of warrants (the Warrants) to acquire units (the Units) of the Fund, such distribution to be made in Ontario and each of the Passport Jurisdictions (as defined below) pursuant to a (final) short form prospectus (the Warrant Prospectus) (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 for this application; and

(b) each 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 each of the provinces (other than Ontario) and territories of Canada (collectively, the Passport Jurisdictions).

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. The Fund is an investment trust established under the laws of the Province of Ontario pursuant to a trust agreement dated as of January 26, 2011, as amended and restated (the Trust Agreement) between the Manager and RBC Dexia Investor Services Trust (the Trustee).

2. The Manager acts as the investment fund manager of the Fund. The Manager is part of the Connor, Clark & Lunn Financial Group. The head office of each of the Fund and the Manager is located at 181 University Avenue, Suite 300, Toronto, Ontario, M5H 3M7. The Manager is registered as an investment fund manager and as an adviser in the category of portfolio manager in Ontario. The Manager is not in default of any of its obligations under securities legislation in any jurisdiction.

3. The authorized share capital of the Fund consists of an unlimited number of Units, each representing an equal, undivided interest in the net assets of the Fund. The Units are listed and posted for trading on the Toronto Stock Exchange (the TSX).

4. The investment objectives of the Fund are to generate: (a) quarterly distributions for holders of Units (Unitholders) initially targeted to be $0.15 per Unit ($0.60 per annum) and (b) total return for Unitholders consisting of dividend income and capital appreciation.

5. To achieve the Fund's investment objectives, the Fund invests in a portfolio consisting of listed emerging markets infrastructure securities issued by entities that own, operate or provide infrastructure assets or services. These are emerging market domiciled entities that earn a substantial amount of their revenue or profits from owning, operating or providing infrastructure assets or services.

6. Macquarie Capital Investment Management LLC (the Investment Manager) has been retained to provide investment advisory and portfolio management services to the Manager in respect of the Fund subject to the investment objectives, investment strategies and investment restrictions of the Fund. The Investment Manager is not registered in any of the provinces or territories of Canada. The Investment Manager is registered as an investment adviser with the U.S. Securities and Exchange Commission. The Investment Manager provides its investment advice to the Fund pursuant to Section 8.26 of NI 31-103 [International adviser].

7. The Fund does not engage in the continuous distribution of its securities.

8. In connection with the Warrant Offering, the Fund proposes to file a preliminary short form prospectus in April 2012 under the securities legislation of the Province of Ontario and each Passport Jurisdiction. Under the Warrant Offering, each holder of a Unit as at a specified record date will be entitled to receive, for no consideration, one Warrant for each Unit held by such holder.

9. Holders of the Warrants will be entitled, upon the exercise of their Warrants, to subscribe for Units pursuant to subscription privileges provided for in the Warrants, at a subscription price to be specified in the Warrant Prospectus. Each Warrant will entitle the holder to subscribe for one Unit under a basic subscription privilege. Holders of Warrants who exercise their Warrants under the basic subscription privilege may also subscribe, pro rata, for additional Units that are not subscribed for by other holders under the basic subscription privilege pursuant to the terms of an additional subscription privilege. The Warrants (including both the basic subscription privilege and the additional subscription privilege) may be exercised weekly commencing in October 2012 until 5:00 p.m. (Toronto time) on January 31, 2013.

10. The Fund intends to apply to list the Warrants to be distributed under the Warrant Prospectus on the TSX.

11. The Warrant Offering Activities will consist of:

(a) the distribution of the Warrant Prospectus and the issuance of Warrants to the holders of Units (as at the record date specified in the Warrant Prospectus), after the Warrant Prospectus has been filed, and receipts obtained, under the securities legislation of the Province of Ontario and each Passport Jurisdiction; and

(b) the distribution of Units to holders of the Warrants, upon the exercise of Warrants by their holders, through registered dealers that are registered in categories that permit them to make such distribution.

12. The Fund is in the business of trading securities by virtue of its portfolio investing activities, which to the extent carried out in Ontario, are made pursuant to section 8.5 [Trades through or to a registered dealer] of National Instrument 31-103 -- Registration Requirements, Exemptions and Ongoing Registrant Obligations. As a result, its capital raising activities, including the Warrant Offering Activities, would require the Fund and the Manager, acting on the Fund's behalf, to register as a dealer in the absence of the Requested Relief (or another available exemption from the dealer registration requirements).

13. Section 8.5 of National Instrument 45-106 -- Prospectus and Registration Exemptions (NI 45-106) provides that, after March 26, 2010, the exemptions from the dealer registration requirements set out in sections 3.1 [Rights offering] and section 3.42 [Conversion, exchange or exercise] of NI 45-106 no longer apply.

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 Fund and the Manager, acting on behalf of the Fund, are not subject to the dealer registration requirement in respect of the Warrant Offering Activities.