Burgundy Asset Management Ltd. et al.

Headnote

MI 11-102 -- Relief allowing subscriptions and redemptions at the next weekly net asset value, even though daily net asset values are calculated -- All securityholders are discretionary investment management account clients of the Manager -- National Instrument 81-102 Mutual Funds.

Applicable Legislative Provisions

National Instrument 81-102 Mutual Funds, s. 9.3, 10.3.

National Instrument 81-106 Investment Fund Continuous Disclosure, s. 14.2(3).

January 23, 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

BURGUNDY ASSET MANAGEMENT LTD.

(the Manager)

AND

BURGUNDY AMERICAN EQUITY FUND,

BURGUNDY BALANCED INCOME FUND,

BURGUNDY CANADIAN EQUITY FUND,

BURGUNDY EUROPEAN EQUITY FUND,

BURGUNDY EUROPEAN FOUNDATION FUND,

BURGUNDY FOCUS CANADIAN EQUITY FUND,

BURGUNDY FOUNDATION TRUST FUND,

BURGUNDY PARTNERS' BALANCED RSP FUND,

BURGUNDY PARTNERS' EQUITY RSP FUND AND

BURGUNDY PARTNERS' GLOBAL FUND

(each a Fund and collectively the Funds)

(collectively, the Manager and the Funds are the Filers)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Manager on behalf of the Funds for a decision under the securities legislation of the Jurisdiction (the Legislation) exempting the Funds and any other investment funds managed in the future by the Manager (collectively the Burgundy Funds) from:

(a) the requirement in section 9.3 of National Instrument 81-102 Mutual Funds (NI 81-102) that the issue price of a security of a mutual fund to which a purchase order pertains shall be the net asset value per security of that class, or series of a class, next determined after the receipt by the mutual fund of the order; and

(b) the requirement in section 10.3 of NI 81-102 that the redemption price of a security of a mutual fund to which a redemption order pertains shall be the net asset value of a security of that class, or series of a class, next determined after the receipt by the mutual fund of the order.

(Items (a) and (b) are referred to 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 Filers have provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied on in British Columbia, Alberta, Saskatchewan, Manitoba, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, Northwest Territories, Nunavut and Yukon (with Ontario, the Jurisdictions).

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 Filers:

(a) The Manager is a corporation incorporated under the laws of Ontario. The Manager is the manager, trustee and investment adviser of the Funds and will be the manager, trustee and investment adviser of any other Burgundy Fund.

(b) The Manager is registered under the securities legislation of Ontario as an adviser in the categories of investment counsel and portfolio manager.

(c) Each Fund is a mutual fund trust governed by a Master Declaration of Trust under the laws of Ontario.

(d) Each Fund is a reporting issuer in Ontario pursuant to a current simplified prospectus and annual information form dated July 31, 2008, as amended and restated on November 6, 2008 (the Simplified Prospectus) and is a reporting issuer in each of British Columbia, Alberta, Saskatchewan, Manitoba, New Brunswick, Nova Scotia, Newfoundland and Labrador, Prince Edward Island, Northwest Territories, Nunavut and Yukon as a result of having previously qualified its securities for distribution in these jurisdictions under a simplified prospectus.

(e) Units of the Funds and any other Burgundy Funds are only available to clients of the Manager who have executed a discretionary investment management account agreement with the Manager.

(f) The Manager manages its clients' assets by investing them in securities, which may include units of the Funds, all as appropriate for each client's investment objectives and risk tolerance.

(g) Each Fund has amended the Simplified Prospectus and has provided 60 days written notice to its unitholders of its intention to commence using specified derivatives.

(h) Paragraph 14.2(3) of National Instrument 81-106 Investment Fund Continuous Disclosure requires that the net asset value of an investment fund be calculated at least once every business day if the investment fund will use specified derivatives and at least once in each week if the investment fund will not use specified derivatives.

(i) Currently, all of the Manager's investment funds (except Burgundy Total Return Bond Fund) calculate their net asset value on a weekly basis, as none of them use specified derivatives.

(j) Once the Funds or any other Burgundy Fund commence using derivatives, such Burgundy Funds will be required to calculate its net asset value on a daily basis.

(k) The Manager proposes to calculate the net asset value for the Funds and any other Burgundy Funds that use derivatives on a daily basis in order to meet its obligations under NI 81-102 regarding the use of derivatives, including the obligation to daily mark-to-market the value of its derivatives.

(l) Sections 9.3 and 10.3 of NI 81-102 require that the purchase or redemption price of units of a fund be the net asset value per unit next determined after receipt, by the fund, of the purchase or redemption order. If a Fund moves to a daily net asset value calculation for the purposes of valuing its derivatives, it will be forced to accept purchases and redemptions on a daily basis.

(m) The Manager has structured its mutual fund operations so that it can consolidate all purchase and redemption orders by its managed accounts into one efficient weekly transaction (Weekly Purchase/Redemption Date). It has determined that effecting such purchases and redemptions on a weekly basis strikes the best balance between the needs of a client to invest or access its assets in a timely manner, and the need to minimize the impact of such transactions on other clients in its mutual funds.

(n) The Manager is concerned that more frequent flows of assets into, and out of, its mutual funds will impose greater transactional costs on its clients in the mutual funds by increasing brokerage charges associated with meeting the purchase and redemption orders.

(o) As the Manager has discretionary authority over all of the assets of its clients who invest in the Funds and as the Manager is also the portfolio manager of the Funds, any risks to its clients that are associated with a Fund's use of derivatives will be managed at the portfolio level of the Fund, rather than at the managed account level.

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 provided that:

(i) each Burgundy Fund that uses derivatives calculates its net asset value, and values its derivative positions, on a daily basis;

(ii) each Burgundy Fund to which a purchase or redemption order pertains, uses the net asset value per security, determined as of the next Weekly Purchase/Redemption Date, to calculate the issue and redemption price of its securities; and

(iii) the only investors in a Burgundy Fund are those that have signed a discretionary management agreement with the Manager.