Headnote

National Policy 11-203 – Process for Exemptive Relief applications in Multiple Jurisdictions – Mutual funds granted relief from certain restrictions in National Instrument 81-102 Mutual Funds on securities lending transactions, including (i) the 50% limit on lending; (ii) the requirement to use the fund’s custodian or sub-custodian as lending agent; and (iii) the requirement to hold the collateral during the course of the transaction – Mutual funds invest their assets in a basket of Canadian equity securities that are pledged to a Counterparty for performance of the funds’ obligations under forward contracts giving the funds exposure to underlying interests – Mutual funds wanting to lend 100% of the basket of Canadian equity securities – not practical for custodian to act as securities lending agent as it does not have control over the Canadian equity securities – Counterparties must release its security interest in the Canadian equity securities in order to allow the funds to lend such securities, provided the funds grant the Counterparties a securities interest in the collateral held by the fund for the loaned securities

Applicable Legislative Provisions

National Instrument 81-102 Mutual Funds, section 2.12(1)1, 2.12(1)2, 2.12(1)12, 2.12(3), 2.15(3), 2.16, 6.8(5) and 19.1.

July 2, 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

In the Matter of

Mackenzie Financial Corporation

(the “Filer”)

and

Mackenzie Sentinel Canadian Short-Term Yield Pool

Mackenzie Sentinel U.S. Short-Term Yield Pool

Symmetry Fixed Income Pool

(the “Present Funds”)

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 exemptive relief for the Present Funds, together with all other mutual funds now or in the future managed by the Filer in respect of which the representations set out below are applicable (collectively, the “Funds” and each a “Fund”), from the following provisions of National Instrument 81-102 Mutual Funds (“NI 81-102”):

1. subsection 2.12(1)1 of NI 81-102 to permit each Fund to enter into securities lending transactions that will not be administered in compliance with all the requirements of section 2.15 and 2.16 of NI 81-102;

2. subsection 2.12(1)2 of NI 81-102 to permit each Fund to enter into securities lending transactions that do not fully comply with all the requirements of section 2.12 of NI 81-102;

3. subsection 2.12(1)12 of NI 81-102 to permit each Fund to enter into securities lending transactions in which the aggregate market value of securities loaned by the Fund exceeds 50% of the total assets of the Fund;

4. subsection 2.12(3) of NI 81-102 to permit each Fund, during the term of a securities lending transaction, to not hold or to dispose of any non-cash collateral delivered to it as a collateral in the transaction;

5. section 2.15(3) of NI 81-102 to permit each Fund to appoint an agent, other than the custodian or sub-custodian of the Fund, as agent for administering the securities lending transactions entered into by the Fund (Agent);

6. section 2.16 of NI 81-102 to the extent this section contemplates that securities lending transactions be entered into through an agent appointed under section 2.15 of NI 81-102; and

7. section 6.8(5) of NI 81-102 to permit the collateral delivered to each Fund in connection with a securities lending transaction to not be held under the custodianship of the custodian or a sub-custodian of the Fund.

Paragraphs 1 through 7 are collectively referred to as the Exemption Sought.

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

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

(ii) the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (“MI 11-102”) is to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, Québec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, Yukon, Northwest Territories and Nunavut.

Interpretation

Defined terms contained in NI 81-102, National Instrument 14-101 Definitions and MI 11-102 have the same meaning in this decision unless they are defined in this decision.

Representations

This Decision is based on the following facts represented by the Filer on behalf of each Fund:

Facts

1. The Filer is a corporation amalgamated under the laws of Ontario and is registered as an advisor in the category of Investment Counsel and Portfolio Manager in Ontario and Alberta and in the category of Portfolio Manager in Manitoba. The Filer is also registered in Ontario as a dealer in the category of Limited Market Dealer, and is registered under the Commodity Futures Act (Ontario) in the category of Commodity Trading Manager. The Filer is the manager and portfolio advisor of each Fund. The Filer’s head office is in Toronto, Ontario.

2. Each Fund is a mutual fund to which NI 81-102 applies. The securities of each Fund are qualified for distribution in each of the provinces and territories of Canada pursuant to a simplified prospectus and annual information form that has been prepared and filed in accordance with the securities legislation of Ontario. Each Fund is, accordingly, a reporting issuer in each of the provinces and territories of Canada.

3. The OSC is the principal regulator to review and grant the Exemption Sought as the head office of the Filer is in the Province of Ontario.

4. The Filer and the Funds are not in default of securities legislation in any province or territory of Canada.

5. Each Fund’s investment objectives include seeking the provision of tax-efficient returns similar to those of a specific type of investment. Each Fund’s investment objectives state that it may use specified derivatives to seek to provide these returns.

6. Each Fund pursues its investment objectives by means of specified derivatives. Generally, each Fund invests its assets in Canadian equity securities (an “Equity Portfolio”). The Equity Portfolio of a Fund is generally a static portfolio that is not actively managed except in limited circumstances. Each Fund also enters into one or more forward contracts (each, a “Forward Contract”) with one or more financial institutions (each a “Counterparty”) to effectively replace the economic return on its Equity Portfolio with the economic return on an underlying interest (such as another mutual fund, one or more indices, or a notional basket of different securities) to achieve the Fund’s investment objectives.

7. Each Fund pledges its Equity Portfolio to its Counterparty (or the portion thereof that is subject to the relevant Forward Contract with that Counterparty) as collateral security for performance of the Fund’s obligations under its Forward Contract with that Counterparty. The Equity Portfolio (or that portion thereof) is held by the Counterparty pursuant to that applicable Forward Contract.

8. The Filer proposes to engage in securities lending transactions on behalf of each Fund that may represent up to 100% of the net assets of that Fund, in order to earn additional returns for that Fund. The Filer proposes to arrange for the Equity Portfolio to be lent to one or more borrowers indirectly, through one or more Agents, other than the Funds’ custodian or sub-custodian.

9. Each Agent shall be acceptable to the Fund and Counterparty and shall be either a Canadian financial institution (including a Counterparty) or an affiliate of a Canadian financial institution. It is not commercially practical for a Fund’s custodian to act as Agent with respect to the Fund’s securities lending transactions as the custodian will not have control over the Fund’s Equity Portfolio for the reason set out in paragraph 7 above.

10. The Filer will ensure that any Agent through which a Fund lends securities maintains appropriate internal controls, procedures, and records for securities lending transactions as prescribed in subsection 2.16(2) of NI 81-102.

11. A Counterparty must release its security interest in the securities in the Equity Portfolio of a Fund in order to allow the Fund to lend such securities, but will generally only do so provided that the Fund grants the Counterparty a security interest in the collateral.

12. To facilitate the Counterparty’s release of its security interest in the securities of the Equity Portfolio of a Fund, securities in the Equity Portfolio will be loaned only to borrowers that are acceptable to the Fund and the Counterparty, and that have an “approved credit rating” as defined in NI 81-102 or whose obligations are unconditionally guaranteed by persons or companies that have such a credit rating. A borrower may include an affiliate of the Counterparty.

13. The collateral received by a Fund in respect of a securities lending transaction, and in which the Counterparty will have a security interest, will be in the form of cash, qualified securities and/or other collateral permitted by NI 81-102, other than collateral described in subsection 2.12(1)6(d) or in paragraph (b) of the definition of “qualified security”. The non-cash collateral will be held by the Agent in the name of the Counterparty and will not be reinvested in any other types of investment products.

14. The prospectus of each Fund discloses that the Fund may enter into securities lending transactions. Other than as set forth herein, any securities lending transactions on behalf of a Fund will be conducted in accordance with the provisions of NI 81-102.

Decision

The principal regulator is satisfied that the test contained in the Legislation that provides the principal regulator with the jurisdiction to make the decision has been met.

The decision of the principal regulator under the Legislation is that the Exemption Sought is granted provided that:

(a) with respect to the exemption from subsection 2.12(1)12 of NI 81-102, each Fund enters into a Forward Contract with an applicable Counterparty and grants that Counterparty a security interest in the securities subject to that Forward Contract and, in connection with a securities lending transaction relative to those securities,

(i) receives the collateral that

(A) is prescribed by subsections 2.12(1)3 to 6 of NI 81-102 other than collateral described in subsection 2.12(1)6(d) or in paragraph (b) of the definition of “qualified security”;

(B) is marked to market on each business day in accordance with subsection 2.12(1)7 of NI 81-102;

(ii) has the rights set forth in subsections 2.12(1)8, 2.12(1)9 and 2.12(1)11 of NI 81-102;

(iii) complies with subsection 2.12(1)10 of NI 81-102; and

(iv) lends its securities only to borrowers that are acceptable to the Fund and the Counterparty, and that have an approved credit rating (as defined in NI 81-102) or whose obligations to the Fund are fully and unconditionally guaranteed by persons or companies that have such a credit rating;

(b) with respect to the exemption from subsection 2.12(3) of NI 81-102, each Fund provides a security interest to the applicable Counterparty in the collateral delivered to it as collateral pursuant to a securities lending transaction as described in representation 11;

(c) with respect to the exemption from section 2.15 of NI 81-102:

(i) each Fund enters into a written agreement with an Agent that complies with each of the requirements set forth in subsection 2.15(4) of NI 81-102, except as set out herein;

(ii) the Agent administering the securities lending transaction of each Fund:

(A) is in compliance with the standard of care prescribed in subsection 2.15(5) of NI 81-102; and

(B) shall be acceptable to the Fund and Counterparty and shall be either a bank or trust company described in paragraph 1 or 2 of section 6.2 of NI 81-102 or the investment bank affiliate of such bank or trust company that is registered as an investment dealer or in an equivalent registration category;

(d) with respect to the exemption from section 2.16 of NI 81-102, the Filer and the Funds comply with the requirements of section 2.16 of NI 81-102 as if references to an “agent appointed under section 2.15” in that section are references to an “agent appointed by the manager”; and

(e) with respect to the exemption from subsection 6.8(5) of NI 81-102, each Fund:

(i) provides a security interest to the applicable Counterparty in the collateral delivered to it as collateral pursuant to a securities lending transaction as described in representation 11; and

(ii) the collateral delivered to the Fund pursuant to the securities lending transaction is held by the Agent, as described in representations 12 and 13.

“Darren McKall”

Darren McKall

Assistant Manager, Investment Funds Branch

Ontario Securities Commission

SEDAR # 1402242

Headnote

National Policy 11-203 – Process for Exemptive Relief applications in Multiple Jurisdictions – Mutual funds granted relief from certain restrictions in National Instrument 81-102 Mutual Funds on securities lending transactions, including (i) the 50% limit on lending; (ii) the requirement to use the fund’s custodian or sub-custodian as lending agent; and (iii) the requirement to hold the collateral during the course of the transaction – Mutual funds invest their assets in a basket of Canadian equity securities that are pledged to a Counterparty for performance of the funds’ obligations under forward contracts giving the funds exposure to underlying interests – Mutual funds wanting to lend 100% of the basket of Canadian equity securities – not practical for custodian to act as securities lending agent as it does not have control over the Canadian equity securities – Counterparties must release its security interest in the Canadian equity securities in order to allow the funds to lend such securities, provided the funds grant the Counterparties a securities interest in the collateral held by the fund for the loaned securities – National Instrument 81-102 Mutual Funds

Applicable Legislative Provisions

National Instrument 81-102 Mutual Funds, section 2.12(1)1, 2.12(1)2, 2.12(1)12, 2.12(3), 2.15(3), 2.16, 6.8(5) and 19.1.