Headnote

National Policy 11-203 Process For Exemptive Relief Applications in Multiple Jurisdictions - Relief granted from NI 81-101, which requires a mutual fund to use a simplified prospectus form, and from prohibition against reimbursement of organizational costs in NI 81-102 - Investment fund that is a mutual fund for purposes of securities legislation issuing units under initial public offering - Expenses of the offering to be borne by the fund - Units not in continuous distribution and not listed for trading on any exchange - Units redeemable at net asset value on any business day - Fund permitted to use long form prospectus and permitted to bear expenses of the offering - National Instrument 81-101 Mutual Fund Prospectus Disclosure - National Instrument 81-102 Mutual Funds.

Applicable Legislative Provisions

National Instrument 81-101 Mutual Fund Prospectus Disclosure, sections 1.3 and 6.1.

National Instrument 81-102 Mutual Funds, sections 3.3 and 19.1.

June 4, 2008

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 CONNOR, CLARK & LUNN RISK-MANAGED ENERGY FUND (the "Filer")

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction (the "Legislation") for relief from:

(i) National Instrument 81-101 Mutual Fund Prospectus Disclosure ("NI 81-101"), which requires a mutual fund to use a simplified prospectus (as such term is defined in NI 81-101); and

(ii) Section 3.3 of National Instrument 81-102 Mutual Funds ("NI 81-102"), which prohibits a mutual fund or its securityholders from bearing the costs of incorporation, formation or initial organization of a mutual fund, or of the preparation and filing of any prospectus, (this paragraph (i) together with paragraph (ii) above are collectively referred to in this decision as 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) 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 jurisdictions of British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, Northwest Territories, Yukon Territory and Nunavut.

Interpretation

Defined terms contained 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 Filer:

1. The Filer is an investment fund (as defined in NI 81-106) to be established under the laws of the Province of Ontario pursuant to a trust agreement. Connor, Clark & Lunn Capital Markets Inc. (the "Manager") is responsible for the management and administration of the Filer. The principal office of the Filer and the Manager is located at Suite 300, 181 University Ave., Toronto, Ontario M5H 3M7.

2. The Filer will make an offering (the "Offering") to the public on a best efforts basis of Class A Units and Class F Units (collectively, the "Units") pursuant to a final long form prospectus (the "Final Prospectus") in respect of which the preliminary long form prospectus (the "Preliminary Prospectus") was filed on May 6, 2008. The costs of formation and initial organization of the Filer, including the preparation and filing of the Preliminary Prospectus and Final Prospectus (collectively, the "Expenses of the Offering"), will be paid out of the proceeds of the Offering and therefore borne by the Filer.

3. The Filer has been created to provide investors with a stable stream of monthly cash distributions and to preserve and enhance the net asset value per Unit of the Filer by investing in energy-related securities and employing a risk management strategy (the "Risk Management Strategy").

4. The net proceeds from the Offering of Units will be invested in a portfolio (the "Energy Portfolio") consisting of the 12 largest issuers by market capitalization included in the S&P/TSX Capped Energy Index (the "Energy Index") on the basis that 10% of the net proceeds of the Offering will be invested in the top six of the 12 largest issuers of the Energy Index, 8% will be invested in the 7th and 8th largest issuers of the Energy Index, 7% will be invested in 9th and 10th largest issuers of the Energy Index and 5% will be invested in the 11th and 12th largest issuers of the Energy Index.

5. The Risk Management Strategy involves purchasing put options and selling call options on the Energy Portfolio and selling call options on the individual securities held in the Energy Portfolio. Under the Risk Management Strategy, the Filer intends to: (i) purchase "out-of-the-money" put options on the Energy Portfolio in order to protect the net asset value of the Filer from a significant decline in value; and (ii) sell "out-of-the-money" call options on the securities held in the Energy Portfolio in order to pay for the put options and to generate additional proceeds above the dividend and distribution income earned from these securities. The Filer will purchase and sell options in compliance with NI 81-102.

6. The Filer does not intend to list the Units on any stock exchange. In order to provide investors with liquidity for their investment, Units of each class may be redeemed on any business day, subject to the Filer's right to suspend redemptions in certain circumstances, for a redemption price equal to the net asset value per Unit of that class of the Filer on that date less any costs of funding the redemption and less, if applicable, the Early Trading Charge (as described in the Preliminary Prospectus).

7. The Filer will be a mutual fund trust for purposes of the Income Tax Act (Canada) and, as a result of the redemption provisions provided, will be a mutual fund for purposes of securities legislation. However, its operation will differ from that of a conventional mutual fund as follows:

(a) The initial public offering of the Filer will be conducted through the full service investment dealer distribution channel, as is the case for listed non-redeemable investment funds.

(b) The Filer does not intend to continuously offer Units once the Filer is out of primary distribution.

(c) The Filer will endeavour to maintain the Energy Portfolio and generally will not otherwise engage in trading.

8. In the absence of being granted the Exemption Sought from NI 81-101, the Filer would be required to file a simplified prospectus in the form of Form 81-101F1 prescribed under NI 81-101. The disclosure requirements of Form 81-101F1 are not intended for investment funds making one-time offerings through a syndicate of full service investment dealers. The use of the simplified prospectus form to sell Units of the Filer in the investment dealer channel may create confusion and may consequently negatively impact the marketing of the Units.

9. Unitholders of the Filer will not be prejudiced as a result of the Filer paying the Expenses of the Offering because, in the case of a one-time fully marketed offering of units where the fund is not in continuous distribution, all unitholders are subject to these same costs at the same time.

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 to permit the Filer to (i) use a long form prospectus in lieu of a simplified prospectus and (ii) bear the Expenses of the Offering, provided that:

(a) the Filer files a Final Prospectus that is a long form prospectus in the form of Form 41-101F2 prescribed under National Instrument 41-101 General Prospectus Requirements; and

(b) the Expenses of the Offering borne by the Filer do not exceed 1.5% of the gross proceeds of the Offering.

"Rhonda Goldberg"

Rhonda Goldberg

Manager, Investment Funds Branch

SEDAR #1264655 & 1261359