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, and NI 81-102 for relief from restrictions on: borrowing, payment of organizational costs, calculation and payment of redemptions, and preparation of compliance reports – The fund is a ‘mutual fund’ for securities legislation purposes but is fundamentally different from a conventional mutual fund - Structure is more akin to a closed-end Fund - Units can only be acquired through exchange of securities – purchases by cash are not permitted - Units not in continuous distribution and not listed on any exchange - Units are redeemable once a month at net asset value - Redemption proceeds are paid on the 15th business day of the following month - Fund permitted to use long form prospectus, permitted to bear expenses of the offering and to borrow money solely to pay expenses of the offering - Exemptive relief also granted from certain other mutual fund requirements concerning calculation and payment of redemptions and preparation of compliance reports– Exemptions Sought would not be prejudicial to investors.

Applicable Legislative Provisions

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

National Instrument 81-102 Mutual Funds, section 2.6(a), 3.3, 1.3, 10.4, 12.1 and 19.1

May 14, 2009

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

SENTRY SELECT CANADIAN INCOME EXCHANGE 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 of the principal regulator (the Legislation) for an exemption from:

(a) National Instrument 81-101 – Mutual Fund Prospectus Disclosure (NI 81-101), which requires a mutual fund to provide its securityholders with a simplified prospectus;

(b) Section 2.6(a) of National Instrument 81-102 - Mutual Funds (NI 81-102), which limits a mutual fund to borrowing no more than five per cent of its net assets and as a temporary measure to accommodate requests for the redemption of its securities or to permit the settlement of portfolio transactions;

(c) Section 3.3 of 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 the preparation and filing of any preliminary simplified prospectus or annual information form;

(d) Section 10.3 of NI 81-102, which requires that the redemption price of a security of a mutual fund to which a redemption order pertains be the NAV of a security of that class, or series of a class, next determined after the receipt by the mutual fund of the order;

(e) Section 10.4(1) of NI 81-102, which generally requires a mutual fund to pay the redemption price for securities that are the subject of a redemption order within three business days after the date of calculation of the NAV per security used in establishing the redemption price; and

(f) Section 12.1(1) of NI 81-102, which requires a mutual fund that does not have a principal distributor to complete and file prescribed compliance reports within specified time frames.

(Items (a) through (f) above are collectively referred to as the Exemptions Sought).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):

(a) the Ontario Securities Commission (the OSC) 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, Québec, New Brunswick, Nova Scotia, Newfoundland and Labrador, Prince Edward Island, Northwest Territories, Nunavut and Yukon.

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.

CIF means Sentry Select Canadian Income Fund.

Manager means Sentry Select Capital Inc.

NAV means net asset value.

Offering means the offering of Units, as contemplated in the Preliminary Prospectus.

Preliminary Prospectus means the preliminary prospectus of the Filer dated April 9, 2009.

Prospectus means the final prospectus of the Filer.

Unitholders means holders of Units.

Units means the units of the Filer.

Representations

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

1. The Filer is an investment fund (as defined in National Instrument 81-106 – Investment Fund Continuous Disclosure (NI 81-106)) to be established under the laws of the Province of Ontario pursuant to a declaration of trust. The Manager is responsible for the management and administration of the Filer. The principal office of the Filer and the Manager is Suite 2850, 130 King Street West, Toronto, Ontario M5X 1A4.

2. The Filer will be authorized to issue an unlimited number of Units.

3. The investment objectives of the Filer are to (i) provide Unitholders with monthly distributions (initially equal to 8.5% per annum, or approximately $0.071 per month, based on the initial price of the Units); and (ii) provide Unitholders with the opportunity for capital appreciation.

4. The Manager will seek to achieve its investment objectives by liquidating the Eligible Securities (defined below) quickly and efficiently, which may include crossing securities into CIF or another mutual fund managed by the Manager in accordance with the policies and procedures of the Filer’s Independent Review Committee, and using the proceeds from such dispositions to acquire Series I units of CIF.

5. Prospective holders of Units may acquire Units only by exchanging with the Filer eligible securities (Eligible Securities) of any of the issuers (Exchange Issuers) specified in the Prospectus at the applicable exchange ratio, subject to the Filer reaching the maximum ownership level and certain other conditions described in the Prospectus. Eligible Securities include common shares, preferred securities, units of real estate investment trusts, units of royalty and income trusts and convertible debentures that have depressed valuations and/or are experiencing liquidity constraints as a result of recent significant market declines or face the uncertainty surrounding the impact of changes to the taxation of royalty and income trusts expected to take effect in 2011.

6. The Filer will be a reporting issuer in Ontario and in each Province and Territory of Canada when the Ontario Securities Commission (OSC) issues a receipt for the final prospectus.

7. The Filer will not be in default of securities legislation in any jurisdiction of Canada.

8. The NAV per Unit of the Filer will be calculated and reported on each Thursday (or if a Thursday is not a day on which the Toronto Stock Exchange (TSX) is open for business (a Business Day), the next Business Day following such Thursday) and on the last Business Day of each month.

9. Subject to the Filer’s right to suspend redemptions, Units may be surrendered at any time by the holders thereof for monthly redemptions on the last Business Day of each month (a Redemption Date) beginning on June 30, 2009. A Unitholder who desires to exercise redemption privileges must do so by causing the participant in CDS Clearing and Depository Services Inc. (CDS) through which such Unitholder holds Units to deliver to CDS on behalf of the owner a written notice of the owner’s intention to redeem Units at any time from the first Business Day of the month until no later than 2:00 p.m. (Toronto time) on the tenth Business Day prior to the applicable Redemption Date. The holder of a Unit surrendered for redemption shall be entitled to receive an amount per Unit equal to the NAV per Unit on such Redemption Date (the Redemption Price). The Redemption Price will be paid to the holder surrendering Units for redemption on or before the 15th Business Day in the month following the applicable Redemption Date (the Redemption Payment Date).

10. Following the Offering, the Manager will begin an orderly disposition of the Eligible Securities in the market, with the goal of liquidating such securities at prices that it believes will exceed those that would otherwise be available to retail investors on the disposal of securities exchanged for Units at the time such securities are sold. The proceeds from the disposition of the Eligible Securities will be used to purchase Series I units of CIF.

11. The Units will not be listed on an exchange.

12. The Units of the Filer will only be sold through investment dealers that are members of the Investment Industry Regulatory Organization of Canada.

13. There will be no issuances of Units following the completion of the Offering, other than as may be permitted under the limited and specified circumstances described in the Prospectus. The Units will not be offered on a continuous basis.

14. The Final Distribution Date, being the date on which the Filer terminates, will be on or before a date which is intended to be approximately one year from the date of closing of the Offering. Once the Manager has liquidated the Eligible Securities held by the Filer and used the proceeds from such liquidation to purchase Series I units of CIF, on the Final Distribution Date, Unitholders will receive Series A units of CIF.

15. CIF is an open-end mutual fund established under the laws of the Province of Ontario on February 11, 2002. As at March 31, 2009, the total assets of CIF were approximately $367 million. On March 26, 2009, the Manager announced that it will seek unitholder approval for the merger of five funds with CIF whereby the five funds will transfer all of their assets to CIF in exchange for Series A units of CIF and the assumption of all the liabilities of each of the five funds. CIF is invested in a diversified portfolio of Canadian securities including equities, fixed-income instruments, real estate investment trusts and royalty and income trusts.

16. CIF and the holding of Series I units of CIF by the Filer will comply with the requirements of Section 2.5(2) of NI 81-102.

17. The Manager, on behalf of the Filer, will enter into a loan facility (the Loan Facility) with a Schedule I Canadian chartered bank (the Lender). The Loan Facility will permit the Filer to borrow an amount not exceeding 6% of the gross proceeds of the Offering, which will be used solely to finance expenses incurred by the Filer under the Offering (such as agents’ fees and expenses of the Offering up to 1.5% of the gross proceeds of the Offering, other than the agents’ fees ). The interest rates, fees and expenses under the Loan Facility will be typical of credit facilities of this nature and the Filer will provide a security interest in all of the assets held by or on behalf of the Filer in favour of the Lender to secure such borrowings. On or prior to the Final Distribution Date, all amounts outstanding under the Loan Facility, including all interest accrued thereon, will be repaid in full.

18. The expenses incurred in connection with the Offering of Units by the Filer will be paid, together with the agents’ fees, by the Filer using the Loan Facility. The Manager has agreed to pay all expenses incurred in connection with the Offering, other than the agents’ fees, that exceed 1.5% of the gross proceeds of the Offering.

19. The Manager is the investment manager of closed-end funds, most of which are listed on the TSX, and open-ended mutual funds offered on a continuous basis. The Manager considers the Filer to be similar to its closed-end funds, as Units of the Filer will be offered through a one-time offering through investment dealers. Typically, the Manager’s closed-end funds are not redeemable at NAV per Unit more frequently than annually. In order for the Filer to be considered a mutual fund trust for the purposes of the Income Tax Act (Canada) (the Tax Act), because it may hold more than 10% of its assets in CIF, Units must be redeemable on demand. In similar circumstances, the other closed-end funds managed by the Manager provide for a monthly redemption right that is based upon a discount to market price. However, because the Units will not be listed on an exchange and, therefore, will not have a readily determinable market price, the redemption right offered to Unitholders will be based upon NAV per Unit. This has the result of causing the Filer to be considered a mutual fund for securities law purposes, although Units will be marketed like the securities of the Manager’s closed-end funds and will not be offered on a continuous basis as part of the Manager’s family of mutual funds.

20. 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.

21. Borrowings of the Filer, to a limit of 6% of the gross proceeds of the Offering, will be used to cover closing costs of the Offering only, and not for working capital or any other purposes.

22. 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.

23. The manner in which the Filer will process redemption requests by Unitholders is consistent with the Manager’s other closed-end funds.

24. As the Filer will not be offering Units in continuous distribution, and will be distributed in a process similar to that of a closed-end fund, Parts 9 to 11 of NI 81-102 will be largely inapplicable to the Filer. Accordingly, compliance reports in the form prescribed by subsection 12.1(1) of NI 81-102 will not disclose relevant information concerning the Filer.

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 Exemptions Sought are granted on the following basis:

(a) NI 81-101 – to enable the Filer, in lieu of a simplified prospectus, to file a long form prospectus prepared in accordance with Form 41-101F2 as prescribed under National Instrument 41-101 General Prospectus Requirements;

(b) Section 2.6(a) of NI 81-102 – to enable the Filer to borrow an amount not to exceed 6% of the gross proceeds of the Offering, for the sole purpose of financing expenses incurred by the Filer under the Offering (such as agents’ fees and expenses of the Offering up to 1.5% of the gross proceeds of the Offering (other than agents’ fees );

(c) Section 3.3 of NI 81-102 – to permit the expenses of the Offering (including agents’ fees) to be borne by the Filer, in the manner provided in paragraph 18 above;

(d) Section 10.3 of NI 81-102 – to permit the Filer to calculate the Redemption Price for the Units in the manner described in the prospectus and on the applicable Redemption Date;

(e) Section 10.4(1) of NI 81-102 – to permit the Filer to pay the Redemption Price on the Redemption Payment Date; and

(f) Section 12.1(1) of NI 81-102 – to relieve the Filer from the requirement to prepare and file the prescribed compliance reports.

“Vera Nunes”

Vera Nunes

Assistant Manager, Investment Funds Branch

ONTARIO SECURITIES COMMISSION

SEDAR # 1404743