Marquest Asset Management Inc. and Mineralfields Asset Management Inc.

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Approval granted for change of manager of a mutual fund -- unitholders have received timely and adequate disclosure regarding the change of manager -- change of manager is not detrimental to unitholders or the public interest.

Applicable Legislative Provisions

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

October 9, 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

MARQUEST ASSET MANAGEMENT INC. AND

MINERALFIELDS ASSET MANAGEMENT INC.

(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 the approval (the Approval Sought):

(a) of the change of manger of Pathway Multi-Series Fund Inc. -- Explorer Series Fund, Pathway Multi-Series Fund Inc. -- Canadian Flex Series Fund, Pathway Multi-Series Fund Inc. -- Energy Series Fund, Pathway Multi-Series Fund Inc. -- Resource Flex Series Fund and Pathway Multi-Series Fund Inc. -- Flex Dividend and Income Growth Series Fund (the Funds), each a series of shares of Pathway Multi Series Fund Inc., a multi-series mutual fund corporation (PMSFI), from the current manager of the Funds, Mineralfields Asset Management Inc. (Mineralfields), to Marquest Asset Management Inc. (Marquest); and

(b) for Marquest to act as the manager of the Funds;

in accordance with the requirements of paragraph 5.5(1)(a) and subsection 5.5(2) of National Instrument 81-102 Mutual Funds (NI 81-102), respectively.

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 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 the provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, Nova Scotia, New Brunswick, Prince Edward Island, Newfoundland and Labrador, the Northwest Territories, the Yukon Territory and Nunavut.

Interpretation

Defined terms contained in National Instrument 14-101 -- Definitions and MI 11-102 have the same meaning in this decision, unless otherwise defined.

Representations

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

1. The head office of Marquest is located at Suite 4420, 161 Bay Street, TD Canada Trust Tower, Toronto, Ontario, M5J 2S1. The head office of Mineralfields is located at 1110 Finch Avenue West, Toronto, Ontario, M3J 2T2. Accordingly, the Principal Regulator is the principal regulator for this Application under National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions.

2. Marquest, a corporation incorporated under the laws of Ontario, is registered as a dealer in the category of exempt market dealer, as an adviser in the category of portfolio manager and as an investment fund manager with the Principal Regulator and with the securities regulatory authorities of each of British Columbia, Alberta, Saskatchewan, Quebec and New Brunswick (collectively, the Marquest Regulators). Marquest is not in default of the securities legislation in any of the jurisdictions of Canada.

3. Mineralfields, a corporation incorporated under the laws of Ontario, is registered as an investment fund manager with the Principal Regulator.

4. Each of the Funds is a series of shares of PMSFI, and is considered to be a separate mutual fund pursuant to section 1.3(1) of NI 81-102. The share capital of the Funds consists of mutual funds shares (the Mutual Fund Shares), owned by the public (the Shareholders), and voting securities of PMSFI (the PMSFI Voting Equity), which are owned by Mineralfields. The Mutual Fund Shares are offered for sale in each of the jurisdictions of Canada pursuant to a simplified prospectus, annual information form and fund facts documents dated December 22, 2011. Accordingly, the Funds are reporting issuers in the Principal Jurisdiction and in each of the other provinces and territories of Canada. None of the Funds is in default of the securities legislation in any of the jurisdictions of Canada.

5. On July 18, 2012, Marquest signed a letter of intent (the LOI) with Joe Dwek Management Consulting Group of Companies with respect to the purchase (the Proposed Transaction) all or substantially all of the assets (the Acquired Assets) of MineralFields, Pathway Investment Counsel Inc. (Pathway) and Limited Market Dealer Inc. (LMDI). The Acquired Assets include the agreements pursuant to which Mineralfields acts as the manager (within the meaning of such term in NI 81-102) of the Funds; thus the consummation of the Proposed Transaction would result in a change of the manager of the Funds from Mineralfields to Marquest. In addition, the PMSIF Voting Equity also form part of the Acquired Assets, and will be transferred to Marquest on the consummation of the Proposed Transaction.

6. The LOI contemplated that the relevant parties would enter into a formal agreement of purchase and sale with respect to the Acquired Assets and the Proposed Transaction. On September 14, 2012, Marquest and Marquest Acquisition Limited Partnership, as purchasers (the Purchasers), entered into an agreement (thePurchase Agreement) with Mineralfields, Pathway, LMDI, Consolidated International Investment Holdings Inc., Joe Dwek Management Consultants Inc. and 2311442 Ontario Inc., as vendors (Vendors), relating to the purchase by the Purchasers of the Acquired Assets.

7. Pursuant to section 5.1(b) of NI 81-102, the approval of the Shareholders of the Funds is required to the change of manager of the Funds from Mineralfields to Marquest. Such approval is being sought at a meeting of the Shareholders in this regard to be held on September 21, 2012.

8. A press release, material change report and prospectus amendment for the Funds will be filed immediately following closing of the Proposed Transaction.

9. Marquest is a Canadian investment management firm incorporated in 1986 that offers a diverse range of investment products covering a variety of equity and fixed income products. The management team at Marquest is highly experienced, with over 100 years of combined investment management and financial services expertise, as well as experience in founding, building and managing many asset management firms. Marquest is currently the manager and portfolio manager of the Marquest Canadian Equity Income Fund, a closed end investment fund whose units are listed on the Toronto Stock Exchange. It also manages a family of six pooled funds, the securities of which are offered on a prospectus-exempt basis in Canada, and also provides portfolio management to a flow-through limited partnership, the Terra 2012 Flow-Through LP, managed by Terra Fund Management Ltd. (Terra), and has previously advised similar flow-through offerings by Terra in 2010 and 2011. As at September 17, 2012, Marquest had assets under management of approximately $100 million.

10. Other than a reconstitution of the IRC for the Funds, required by NI 81-107, there is no current intention to change of the operations of the Funds, including, in particular, no current intention to change investment objectives or strategies (including provisions relating to use of derivatives or securities lending) of any Fund, fee structures, sub-advisors, auditor or custodian.

Decision

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

The decision of the principal regulator under the Legislation is that the Approval Sought is granted.