Mackenzie Financial Corporation and Symmetry Managed Return Class (Re), 2008 CanLII 48158

Headnote

National Policy 11-203 Process For Exemptive Relief Applications in Multiple Jurisdictions - Relief granted from multi-layering prohibition in paragraph 2.5(2)(b) of NI 81-102 to permit Symmetry Top Funds to invest in Symmetry Managed Return Pool, which is more than 10% invested in Symmetry Registered Fixed Income Pool through forward contracts - Three tier fund structure not complex and akin to current multi-layering exception in NI 81-102 - Transparent investment portfolio and accountability for portfolio management - National Instrument 81-102 Mutual Funds.

Applicable Legislative Provisions

National Instrument 81-102 Mutual Funds, paragraph 2.5(2)(b) and section 19.1.

August 15, 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 Mackenzie Financial Corporation

(the "Filer" or "Mackenzie")

and

In the Matter of

Symmetry Managed Return Class

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filer on behalf of the Symmetry Managed Return Class and other Symmetry mutual fund share classes of Mackenzie Financial Capital Corporation to be established by the Filer (together with the Symmetry Managed Return Class, the "Symmetry Top Funds") for a decision under the securities legislation of the Jurisdiction of the principal regulator (the "Legislation") exempting the Symmetry Top Funds from the restriction contained in clause 2.5(2)(b) of National Instrument 81-102 Mutual Funds ("NI 81-102") that a fund not invest in another fund if the other fund holds more than 10% of the market value of its net assets in securities of other mutual funds (the "Exemption Sought").

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions:

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 British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick, Nova Scotia, Newfoundland and Labrador, Prince Edward Island, Northwest Territories, Nunavut and Yukon (the "Other Jurisdictions").

Interpretation

Defined terms contained in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision unless they are defined in this decision.

Representations

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

1. Mackenzie is a corporation incorporated under the laws of Ontario. Its head office is in Toronto. Mackenzie is or will be the manager of the Symmetry Top Funds and Symmetry Managed Return Pool.

2. Each Symmetry Top Fund is, or will be, a class of shares of Mackenzie Financial Capital Corporation. Symmetry Managed Return Pool (and Symmetry Equity Pool) will be a class of shares of Multi-Class Investment Corp.

3. Each Symmetry Top Fund will be a fund-of-funds that gains exposure to equity and fixed income investments by investing in underlying Symmetry mutual fund share classes of Multi-Class Investment Corp. To gain fixed income exposure, each Symmetry Top Fund will invest a prescribed percentage of its assets in Symmetry Managed Return Pool.

4. Symmetry Managed Return Pool will be a Mackenzie managed mutual fund that seeks to achieve its investment objective by investing primarily in Canadian equity securities and by entering into forward contracts in order to provide the fund with a return determined with reference to the performance of a Canadian fixed income fund managed by Mackenzie, Symmetry Registered Fixed Income Pool. It is anticipated that the performance of Symmetry Managed Return Pool and Symmetry Registered Fixed Income Pool will differ only by the costs associated with the forward contracts.

5. The Symmetry Top Funds' investments in securities of the Symmetry Managed Return Pool will therefore result in a three-tier fund structure, contrary to the multi-layering restriction in paragraph 2.5(2)(b) of NI 81-102.

6. Symmetry Managed Return Class and Symmetry Registered Fixed Income Pool are currently qualified for distribution in Ontario and the Other Jurisdictions pursuant to a simplified prospectus dated December 7, 2007. A meeting of investors of Symmetry Managed Return Class has been called for September 19, 2008 to approve a change of investment objective to permit it to invest solely in Symmetry Managed Return Pool.

7. Each of the Symmetry Top Funds, the Symmetry Managed Return Pool and Symmetry Registered Fixed Income Pool is, or will be, an open-end mutual fund established under the laws of Ontario and is, or will be, a reporting issuer under the securities laws of Ontario and each of the Other Jurisdictions. Symmetry Managed Return Class and Symmetry Registered Fixed Income Pool are not in default of any requirements under applicable securities legislation.

8. An investment by the Symmetry Top Funds in securities of the Symmetry Managed Return Pool will in each case be made in accordance with the provisions of section 2.5 of NI 81-102, except for the requirement in paragraph 2.5(2)(b). There will accordingly be no duplication of fees between each tier of the three-tier fund structure.

9. An investment by the Symmetry Top Funds in securities of the Symmetry Managed Return Pool will represent the business judgment of responsible persons uninfluenced by considerations other than the best interests of the Symmetry Top Funds.

10. The three-tier fund structure that will result from a Symmetry Top Fund's investment in securities of the Symmetry Managed Return Pool will be akin to, and no more complex than, the three-tier fund structure currently permitted under paragraph 2.5(4)(a) of NI 81-102.

11. The prospectus of each Symmetry Top Fund will disclose that its fixed income exposure will be obtained through an investment in Symmetry Managed Return Pool, the return of which is linked to Symmetry Registered Fixed Income Pool. It will therefore be clear to investors that accountability for portfolio management is at the level of Symmetry Registered Fixed Income Pool. In addition, the Filer will comply with the requirement under National Instrument 81-106 Investment Fund Continuous Disclosure relating to top 25 disclosure in the Management Report of Fund Performance as if each Symmetry Top Fund were invested directly in Symmetry Registered Fixed Income Pool. This will provide transparency to investors relating to the investment portfolio.

Decision

The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make a decision.

The decision of the principal regulator under the Legislation is that the Exemption Sought is granted to allow the Symmetry Top Funds to invest in securities of the Symmetry Managed Return Pool, provided such investments are made in compliance with each provision of section 2.5 of NI 81-102, except for paragraph 2.5(2)(b).

"Vera Nunes"

Vera Nunes

Assistant Manager, Investment Funds Branch

Ontario Securities Commission

SEDAR# 1297691