National Policy 11-203 Process For Exemptive Relief Applications in Multiple Jurisdictions -MRRS exemption granted from paragraph 2.5(2)(a) of National Instrument 81-102 Mutual funds to permit a top fund to invest up to 10% of its net assets in aggregate in commodity pools, that use financial instruments that correlate to the performance of an Underlying Index, and that are not subject to National Instrument 81-101 Mutual Fund Prospectus Disclosure. The commodity pools are qualified under a long form prospectus.

National Instrument 81-101 Mutual Funds ss. 2.5(2)(a) and 19.1.

June 20, 2008

In the Matter of the Securities Legislation of ONTARIO (the Ontario Jurisdiction)

AND

IN THE MATTER OF Galileo Funds Inc., BluMont Capital Corporation, TDK Fund Management Inc., Webb Asset Management Canada, Inc., JovFunds Management Inc. AND T.E. Investment Counsel Inc.

(each a MANAGER)

AND

(EACH AN EXISTING FUND)

AND

BetaPro Management Inc.

(BetaPro)

Background

The principal regulator in the Ontario Jurisdiction has received an application from the Managers with respect to the Existing Funds, which are all subject to National Instrument 81-102 Mutual Funds (NI 81-102), and such other mutual funds subject to NI 81-102 as the Managers or an affiliate of the Managers may establish in the future and/or become the manager of in the future (each a Future Fund and together with the Existing Funds, individually, a Fund and, collectively, the Funds), and BetaPro, the manager and trustee of the Horizons BetaPro Pools set out in Schedule B and any similar funds established and/or managed by BetaPro in the future (each a HBP Pool), for a decision under the securities legislation of the Ontario Jurisdiction of the principal regulator (the Legislation) exempting the Funds from paragraph 2.5(2)(a) of NI 81-102 to permit each Fund to invest in the HBP Pools (the Exemption Sought).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions:

(i) the Ontario Securities Commission (the OSC) is the principal regulator for this application; and

(ii) the Managers on behalf of the Funds have provided notice that subsection 4.7(2) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in each of the other Provinces and Territories of Canada (together with Ontario, the Jurisdictions, and individually a Jurisdiction).

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 Managers on behalf of the Funds and by BetaPro on behalf of the HBP Pools:

Previous Decision

1The Exemption Sought supersedes and replaces the relief previously granted to JovFunds Management Inc. on March 4, 2008 by the OSC and certain of the other Canadian securities regulatory authorities, which is substantially the same as the Exemption Sought, except that, unlike the Exemption Sought, such relief did not apply in Québec.

Managers

2Each Manager, or an affiliate of the Manager, acts, or will act, as the manager of each Fund that forms part of its mutual fund complex. The head office of each Manager is located in Toronto, Ontario.

3Neither the Managers, nor the Existing Funds, are in default of the securities legislation in any of the Jurisdictions.

4Each Fund is, and will be, a mutual fund organized under the laws of Canada or a Jurisdiction and is, and will be, a reporting issuer under the laws of one or more of the Jurisdictions.

5Securities of each Fund are, and will be, distributed pursuant to a prospectus that has been filed with and receipted by some or all of the securities regulatory authorities in the Jurisdictions.

BetaPro

6BetaPro, a corporation incorporated under the laws of Canada, acts, or will act as, the trustee and manager of each HBP Pool. The head office of BetaPro is located in Toronto, Ontario.

7Neither BetaPro, nor the HBP Pools listed in Schedule B, are in default of the securities legislation in any of the Jurisdictions.

HBP ETFs

8Each Horizons BetaPro exchange traded fund set out in Schedule B, including any similar exchange traded funds established and/or managed by BetaPro in the future, (each an HBP ETF) is, and will be, a mutual fund organized under the laws of Ontario and is, or will be, a reporting issuer under the laws of some or all of the Jurisdictions.

9Securities of each HBP ETF are, or will be, listed on the Toronto Stock Exchange (the TSX). BetaPro will not file a final prospectus for an HBP ETF unless the TSX has conditionally approved the listing of securities of the HBP ETF.

10Each HBP ETF is, or will be, a commodity pool, as such term is defined in section 1.1(1) of National Instrument 81-104 Commodity Pools (NI 81-104), in that each HBP ETF has adopted, or will adopt, fundamental investment objectives that permit that HBP ETF to use or invest in financial instruments in a manner that is not permitted under NI 81-102.

11Each HBP ETF’s investment objective will be to provide daily results, before fees, expenses, distributions, brokerage commissions and other transaction costs, that endeavour to correspond to a multiple or the inverse (opposite) multiple of the daily performance of a “permitted index” as defined in NI 81-102 (the Underlying Index).

12In order to achieve its investment objective, each HBP ETF will invest in equity securities and/or other financial instruments, including derivatives.

13Each bull HBP ETF uses, or will use, financial instruments to track its Underlying Index by +200% on a daily basis. Each bear HBP ETF uses, or will use, financial instruments to track its Underlying Index by -200% on a daily basis.

14Each bull HBP ETF will be rebalanced daily to ensure that its exposure and performance will be +200% of its Underlying Index on each day on which it is valued and each bear HBP ETF will be rebalanced daily to ensure that its exposure and performance will be -200% of its Underlying Index on each day on which it is valued.

HBP Funds

15Each Horizons BetaPro Fund set out in Schedule B, including any similar funds established and/or managed by BetaPro in the future, (each a HBP Fund) is, or will be, a mutual fund trust organized under the laws of Ontario and is, or will be, a reporting issuer under the laws of some or all of the Jurisdictions.

16Securities of each HBP Fund are, and will be, distributed pursuant to a prospectus that has been filed with and receipted by the securities regulatory authorities in the applicable Jurisdictions.

17Each HBP Fund is, or will be, a commodity pool, as such term is defined in section 1.1(1) of NI 81-104, in that each HBP Fund has adopted, or will adopt, fundamental investment objectives that permit that HBP Fund to use or invest in financial instruments in a manner that is not permitted under NI 81-102.

18Each HBP Fund’s investment objective will be to provide daily results, before fees, expenses, distributions, brokerage commissions and other transaction costs, that endeavour to correspond to a multiple or the inverse (opposite) multiple of the daily performance of its Underlying Index.

19In order to achieve its investment objective, each HBP Fund will invest in equity securities and/or other financial instruments, including derivatives.

20Each bull HBP Fund uses, or will use, financial instruments to track its Underlying Index by +200% on a daily basis. Each bear HBP Fund uses, or will use, financial instruments to track its Underlying Index by -200% on a daily basis.

HBP Pools

21The maximum exposure of an investment by an investor in a HBP Pool will be the amount invested by the investor in securities of the HBP Pool.

22The HBP Pools are attractive investments for the Funds as they provide an efficient and cost effective means of achieving diversification and exposure that would not otherwise be possible.

23An investment by a Fund in units of a HBP Pool will represent the business judgment of responsible persons uninfluenced by considerations other than the best interests of the Fund.

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 in those Jurisdictions in which a Fund is a reporting issuer provided that:

(a) no more than 10% of the Fund’s net assets, in the aggregate at the time of purchase, may be invested in securities of the HBP Pools;

(b) if the Fund has obtained relief to use short selling it may invest up to, but no more than, 20% of its net assets in aggregate at the time of purchase in securities of the HBP Pools and the shorting of securities;

(c) the investment by the Fund in securities of a HBP Pool is in accordance with the fundamental investment objective of the Fund;

(d) the prospectus of the Fund discloses, or will disclose the next time it is renewed after the date hereof, that the Fund may invest in commodity pools that use financial instruments that correlate to the performance of an Underlying Index and, to the extent applicable, the risks associated with such an investment; and

(e) the Fund will not invest in an HBP Pool with an Underlying Index based on:

i. a physical commodity other than gold, or

ii. a specified derivative of which the underlying interest is a physical commodity other than gold.

“Rhonda Goldberg”

Rhonda Goldberg

Manager, Investment Funds

Ontario Securities Commission

Sedar No. 1262940

Schedule A

List of Existing Funds

Galileo Funds

Galileo Fund

Galileo Small/Mid Cap Fund

Galileo Absolute Return Fund

Galileo Canadian Active/Passive Fund

Galileo Global Active/Passive Fund

Galileo High Income Plus Fund

BluMont Funds

BluMont Canadian Fund

BluMont North American Fund

TDK Fund

TDK Resource Fund Inc.

Webb Funds

Webb Enhanced Growth Fund

Webb Enhanced Income Fund

JovFunds Management Inc.

Jov Talisman Fund

Jov Diversified Monthly Income Fund

Jov Leon Frazer Balanced Fund

Jov North American Momentum Fund

Jov Leon Frazer Dividend Fund

Jov BetaPro Short-Term Income Fund

Jov Winslow Global Green Growth Fund

Horizons Advantaged Equity Fund Inc.

Jov Fiera Growth Tactical Portfolio

Jov Fiera Balanced Tactical Portfolio

Jov Fiera Conservative Tactical Portfolio

T.E. Investment Counsel Inc.

Jov Prosperity Canadian Fixed Income Fund

Jov Prosperity Canadian Equity Fund

Jov Prosperity U.S. Equity Fund

Jov Prosperity International Equity Fund

Schedule B

List of HBP Pools

HBP ETFs

Horizons BetaPro S&P/TSX 60® Bull Plus ETF

Horizons BetaPro S&P/TSX 60® Bear Plus ETF

Horizons BetaPro S&P/TSX® Global Mining Bull Plus ETF

Horizons BetaPro S&P/TSX® Global Mining Bear Plus ETF

Horizons BetaPro COMEX® Gold Bullion Bull Plus ETF

Horizons BetaPro COMEX® Gold Bullion Bear Plus ETF

Horizons BetaPro S&P/TSX Capped Financials Bull Plus ETF

Horizons BetaPro S&P/TSX Capped Financials Bear Plus ETF

Horizons BetaPro S&P/TSX Capped Energy Bull Plus ETF

Horizons BetaPro S&P/TSX Capped Energy Bear Plus ETF

Horizons BetaPro S&P/TSX Global Gold Bull Plus ETF

Horizons BetaPro S&P/TSX Global Gold Bear Plus ETF

Horizons BetaPro S&P 500® Bull Plus ETF

Horizons BetaPro S&P 500® Bear Plus ETF

Horizons BetaPro NASDAQ-100® Bull Plus ETF

Horizons BetaPro NASDAQ-100® Bear Plus ETF

Horizons BetaPro MSCI Emerging Markets Bull Plus ETF

Horizons BetaPro MSCI Emerging Markets Bear Plus ETF

Horizons BetaPro US Dollar Bull Plus ETF

Horizons BetaPro US Dollar Bear Plus ETF

Horizons BetaPro US 30-year Bond Bull Plus ETF

Horizons BetaPro US 30-year Bond Bear Plus ETF

HBP Funds

Horizons BetaPro S&P/TSX 60® Bull Plus Fund

Horizons BetaPro S&P/TSX 60® Bear Plus Fund

Horizons BetaPro NASDAQ-100® Bull Plus Fund

Horizons BetaPro NASDAQ-100® Bear Plus Fund

Horizons BetaPro Canadian Bond Bull Plus Fund

Horizons BetaPro Canadian Bond Bear Plus Fund

Horizons BetaPro U.S. Dollar Bull Plus Fund

Horizons BetaPro U.S. Dollar Bear Plus Fund

Horizons BetaPro S&P 500® Bull Plus Fund

Horizons BetaPro S&P 500® Bear Plus Fund

Horizons BetaPro COMEX® Gold Bull Plus Fund

Horizons BetaPro COMEX® Gold Bear Plus Fund

Galileo Funds Inc. et al. (Re), 2008 CanLII 30319

Case Summary