Mackenzie Financial Corporation - MRRS Decision

Headnote

Revocation and replacement of MRRS decisiondocument dated July 26, 2002. New decision document providingthe same exemptions from the mutual fund self-dealing prohibitionsof clauses 111(2)(a) and (c) and 111(3) of the Securities Act(Ontario) but relief expanded to include new related partiesand additional funds as a result of a merger. Mutual funds allowedto hold securities of companies that are related to the mutualfunds and to make further purchases and sales of those securitiesand retain those securities provided that a fund governancemechanism is used to oversee the holdings, purchases or salesof securities of related companies for the mutual funds andto ensure that such holdings, purchases or sales have been madefree from any influence by a related company and without takinginto account any consideration relevant to a related company.

Statutes Cited

Securities Act (Ontario), R.S.O. 1990 c. S.5,as am., 111(2)(a) and (c) and 111(3) and 144.

IN THE MATTER OF

THE SECURITIES LEGISLATIONOF

BRITISH COLUMBIA, ALBERTA,SASKATCHEWAN, ONTARIO,

NOVA SCOTIA AND NEWFOUNDLANDAND LABRADOR

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEWSYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

MACKENZIE FINANCIAL CORPORATION

MACKENZIE UNIVERSAL CANADIANGROWTH FUND

MACKENZIE UNIVERSAL CANADIANGROWTH CAPITAL CLASS

MACKENZIE SHORT-TERM BONDFUND

LLIM BALANCED STRATEGIC GROWTHFUND

LLIM CANADIAN DIVERSIFIEDEQUITY FUND

LLIM CANADIAN GROWTH SECTORSFUND

LLIM CANADIAN BOND FUND

LLIM INCOME PLUS FUND

GWLIM CORPORATE BOND FUND

KEYSTONE AGF BOND FUND

MACKENZIE MAXXUM PENSION FUND

MACKENZIE MAXXUM CANADIANVALUE FUND

MACKENZIE BALANCED FUND

MACKENZIE MAXXUM DIVIDENDFUND

MACKENZIE MAXXUM DIVIDENDGROWTH FUND

MACKENZIE INCOME FUND

MACKENZIE IVY ENTERPRISE FUND

MACKENZIE IVY GROWTH AND INCOMEFUND

MACKENZIE IVY CANADIAN FUND

MACKENZIE HORIZON CAPITALCLASS

MACKENZIE IVY CANADIAN CAPITALCLASS

MACKENZIE IVY ENTERPRISE CAPITALCLASS

MACKENZIE PREMIER INTERNATIONALINVESTMENT CANADIAN EQUITY FUND

MACKENZIE UNIVERSAL FUTURECAPITAL CLASS

MACKENZIE UNIVERSAL SELECTMANAGERS CANADA CAPITAL CLASS

MACKENZIE UNIVERSAL CANADIANBALANCED FUND

MACKENZIE UNIVERSAL FUTUREFUND

MACKENZIE UNIVERSAL SELECTMANAGERS CANADA FUND

CLARICA SUMMIT EQUITY FUND

CLARICA SUMMIT GROWTH ANDINCOME FUND

CLARICA SUMMIT DIVIDEND GROWTHFUND

KEYSTONE AIM/TRIMARK CANADIANEQUITY FUND

KEYSTONE AGF EQUITY FUND

KEYSTONE SPECTRUM EQUITY FUND

AND

TOGETHER WITH SUCH OTHER FUNDSAS ARE OR MAY BE ESTABLISHED AND POSSIBLY ADVISED BY MACKENZIE

FINANCIAL CORPORATION

FROM TIME TO TIME

MRRS DECISION DOCUMENT

WHEREAS the local securities regulatoryauthority or regulator (the "Decision Maker") in eachof the provinces of British Columbia, Alberta, Saskatchewan,Ontario, Nova Scotia and Newfoundland and Labrador (the "Jurisdictions")issued a decision on April 17, 2001 which was replaced by anamended decision on July 26, 2002 (the "First Amended Decision")pursuant to the securities legislation of the Jurisdictions(the "Legislation") that certain provisions of theLegislation do not apply so as to prevent certain funds establishedand possibly advised by Mackenzie from investing in, or continuingto hold an investment in, the securities of Power Corporationof Canada ("PCC"), Power Financial Corporation ("PFC")and Great-West Lifeco Inc. ("Lifeco") (collectively,the "Initial Related Companies"), subject to certainconditions;

AND WHEREAS Lifeco has entered into asecurities exchange transaction (the "Exchange Transaction")with Canada Life Financial Corporation ("CLFC") wherebyLifeco will acquire all of the outstanding common shares ofCLFC pursuant to a transaction agreement made as of February14, 2003;

AND WHEREAS the Decision Makers wishto rescind the First Amended Decision dated July 26, 2002;

AND WHEREAS Mackenzie has made a furtherapplication for a decision (the "Decision") pursuantto Legislation as a result of the Exchange Transaction thatthe following provisions do not apply so as to prevent the fundslisted in Schedule A (the "New Funds") together withthe funds set out in the First Amended Decision listed in ScheduleB and such other funds that are or may be established and possiblyadvised by Mackenzie from time to time (individually a "Fund"and collectively the "Funds") from investing in, orcontinuing to hold an investment in, securities of the RelatedCompanies (as hereinafter defined):

(a) the provisions prohibiting a mutual fundfrom knowingly making or holding an investment in any personor company who is a substantial security holder of the mutualfund, its management company or distribution company; and

(b) the provision prohibiting a mutual fundfrom knowingly making or holding an investment in an issuerin which a substantial security holder of the mutual fund,its management company or its distribution company has a significantinterest (the provisions of (a) and (b) being collectively,the "Investment Restrictions");

AND WHEREAS under the Mutual RelianceRelief System for Exemptive Relief of Applications (the "System"),the Ontario Securities Commission is the principal regulatorfor this Application;

AND WHEREAS it has been represented tothe Decision Makers as follows:

1. The Funds are open-ended mutual fund trustsestablished or mutual fund corporations incorporated, underthe laws of the Province of Ontario.

2. Mackenzie is the manager, registrar andadvisor of each of the New Funds and will also be the advisorto the Funds and may also be the manager of the Funds. Mackenzieis a corporation incorporated under the laws of Ontario andis registered as an investment counsel and portfolio manager/commoditytrading manager under the securities legislation in Ontario,as an investment portfolio manager and investment counselunder the securities legislation in Alberta and as a portfoliomanager under the securities legislation in Manitoba.

3. The securities of the Funds are or willbe offered for sale in all of the provinces and territoriesof Canada. Each of the Funds is or will be a reporting issueror equivalent under the Legislation and is not on a list ofdefaulting issuers maintained under the Legislation.

4. On April 17, 2001, Investors Group Inc.("IG") purchased all of the outstanding common sharesof Mackenzie.

5. As a result of the First Amended Decisiongranted by the Decision Makers dated July 26, 2002, the Fundsare permitted to purchase and hold securities of the InitialRelated Companies.

6. Lifeco is a company incorporated underthe Canada Business Corporations Act and is a reportingissuer or equivalent in each of the Jurisdictions.

7. As at April 8, 2003, PCC held 67.1% ofthe voting securities of PFC. As at February 14, 2003, PFCheld 78.49% of the common equity share capital of Lifeco.PFC will hold approximately 69.21% of the common equity sharecapital of Lifeco after the completion of the Exchange Transaction.PFC holds, directly and indirectly, more than 58% of the outstandingcommon shares in the capital of IG and IG owns 100% of theoutstanding common shares of Mackenzie.

8. CLFC is an insurance company incorporatedunder the Insurance Companies Act (Canada) and is areporting issuer or equivalent in each of the provinces andterritories in Canada. CLFC's registered office is locatedat 330 University Avenue, Toronto, Ontario M5G 1R8.

9. The authorized share capital of CLFC consistsof an unlimited number of CLFC Common Shares and an unlimitednumber non-voting preferred shares, issuable in series ("CLFCPreferred Shares"). As of April 8, 2003, there were nomore than 160,440,000 CLFC Common Shares and 6,000,000 CLFCPreferred Shares issued and outstanding. The CLFC PreferredShares are currently listed and posted for trading on theToronto Stock Exchange ("TSX") and the CLFC CommonShares are currently listed and posted for trading on theTSX and the New York Stock Exchange.

10. The Canada Life Assurance Company ("CLA")is a direct subsidiary of CLFC and CLFC owns all of the outstandingcommon shares of CLA. CLA has issued and outstanding a $250million principal amount 8% subordinated debenture, a $200million principal amount 5.8% subordinated debenture, SeriesA, and a $100 million principal amount 6.4% subordinated debenture,Series B (collectively, the "CLA Debentures").

11. CLA has a significant interest in CanadaLife Capital Trust (the "Trust"). The Trust issuedCanada Life Capital Securities ("CLiCS") pursuantto a prospectus dated March 7, 2002. Each CLiCS representsan undivided beneficial ownership interest in the assets ofthe Trust. Holders of CLiCS have the right at any time tosurrender their CLiCS for CLA Shares. The CLiCS will automaticallybe exchanged into CLA Shares if certain capital ratios arenot maintained in the Trust or upon the occurrence of certaininsolvency events. Starting in 2012, the CLA Shares are exchangeablefor CLFC Common Shares.

12. It is anticipated that Lifeco will acquireall of the outstanding common shares of CLFC through the ExchangeTransaction.

13. The Exchange Transaction will be effectedthrough a reorganization of CLFC's capital structure. TheExchange Transaction was approved by more than 66-2/3% ofthe holders of common shares of CLFC who voted at a specialmeeting held on May 5, 2003.

14. Subject to the satisfaction of all closingconditions and obtaining all applicable regulatory approvals,it is anticipated that the Exchange Transaction will be completedon July 10, 2003.

15. As at April 8, 2003 each of the New Fundsowned securities in CLFC, CLA and/or the Trust (collectively,the "CL Companies").

16. At the time the securities of the CL Companieswere initially purchased, the CL Companies were not affiliatedwith the Funds or Mackenzie, and each investment by the Fundsin the securities of the CL Companies represented the businessjudgment of professional portfolio advisers uninfluenced byconsiderations other than the best interests of the investorsof the Funds.

17. Mackenzie believes that it is in the bestinterests of investors in the New Funds to retain the investmentsin the securities of the CL Companies.

18. Mackenzie believes that it would be inthe best interests of investors of the Funds to be permittedto invest in the securities of the Initial Related Companiesand the CL Companies (collectively, the "Related Companies"),in keeping with the investment objectives of the Funds, upto the limits allowed by applicable Legislation.

19. Mackenzie has established an IndependentReview Committee (the "Independent Committee"),comprised entirely of individuals who are wholly independentof Mackenzie, to oversee the holdings, purchases or salesof securities of Related Companies for the Funds.

20. The Independent Committee shall reviewthe holdings, purchases or sales of securities of the RelatedCompanies to ensure that they have been made free from anyinfluence by a Related Company and without taking into accountany consideration relevant to a Related Company.

21. The Independent Committee will take intoconsideration the best interests of unitholders of the Fundsand no other factors.

22. Compensation to be paid to members ofthe Independent Committee will be paid by the Funds basedon the relative size of holdings of the Related Companiesin a Fund.

AND WHEREAS pursuant to the System thisMRRS Decision Document evidences the decision of each DecisionMaker (collectively, the "Decision");

AND WHEREAS each of the Decision Makersis satisfied that the test contained in the Legislation thatprovides the Decision Maker with the Jurisdiction to make theDecision has been met;

THE DECISION of the Decision Makers pursuantto the Legislation is that:

1. the First Amended Decision is hereby rescinded;

2. the Funds are exempt from the InvestmentRestrictions so as to enable the Funds to invest, or continueto hold an investment in, securities of a Related Company;and

3. this Decision, as it relates to the jurisdictionof a Decision Maker, will terminate one year after the publicationin final form of any legislation or rule of that DecisionMaker dealing with mutual fund governance in a manner thatconflicts with or makes inapplicable any provision of thisDecision;

provided that:

(a) Mackenzie has appointed the IndependentCommittee to review the Funds' purchases, sales and continuedholdings of securities of a Related Company;

(b) the Independent Committee has at leastthree members, none of whom is an associate, employee, directoror officer of (i) Mackenzie, (ii) any portfolio manager ofthe Funds, or (iii) any associate or affiliate of Mackenzieor the portfolio managers of the Funds;

(c) the Independent Committee has a writtenmandate describing its duties and standard of care which,as a minimum, sets out the conditions of this Decision;

(d) the members of the Independent Committeeexercise their powers and discharge their duties honestly,in good faith and in the best interests of investors in theFunds and, in doing so, exercise the degree of care, diligenceand skill that a reasonably prudent person would exercisein the circumstances;

(e) none of the Funds relieves the membersof the Independent Committee from liability for loss thatarises out of a failure to satisfy the standard of care setout in paragraph (d);

(f) none of the Funds indemnifies the membersof the Independent Committee against legal fees, judgmentsand amounts paid in settlement as a result of a breach ofthe standard of care set out in paragraph (d);

(g) none of the Funds incurs the cost of anyportion of liability insurance that insures a member of theIndependent Committee for a liability for loss that arisesout of a failure to satisfy the standard of care set out inparagraph (d);

(h) the cost of any indemnification or insurancecoverage paid for by Mackenzie, any portfolio manager of theFunds, or any associate or affiliate of Mackenzie or the portfoliomanagers of the Funds to indemnify or insure the members ofthe Independent Committee in respect of a loss that arisesout of a failure to satisfy the standard of care set out inparagraph (d) is not paid either directly or indirectly bythe Funds;

(i) the Independent Committee reviews theFunds' purchases, sales and continued holdings of securitiesof a Related Company on a regular basis, but not less frequentlythan every three months;

(j) the Independent Committee forms the opinion,after reasonable inquiry, that the decisions made on behalfof each Fund by Mackenzie or the Fund's portfolio managerto purchase, sell or continue to hold securities of a RelatedCompany were and continue to be in the best interests of theFund, and:

(i) represent the business judgment of Mackenzieor the Fund's portfolio manager, uninfluenced by considerationsother than the best interest of the Fund,

(ii) have been made free from any influenceby a Related Company and without taking into account anyconsideration relevant to a Related Company, and

(iii) do not exceed the limitations of theapplicable legislation;

(k) the determination made by the IndependentCommittee pursuant to paragraph (j) is included in detailedwritten minutes provided to Mackenzie not less frequentlythan every three months;

(l) the reports required to be filed pursuantto the Legislation with respect to every purchase and saleof securities of a Related Company are filed on SEDAR in respectof the relevant mutual fund;

(m) the Independent Committee advises theDecision Makers in writing of:

(i) any determination by it that the conditionset out in paragraph (j) has not been satisfied with respectto any purchase, sale or holding of securities of a RelatedCompany,

(ii) any determination by it that any othercondition of this Decision has not been satisfied,

(iii) any action it has taken or proposesto take following the determinations referred to above,and

(iv) any action taken, or proposed to betaken, by Mackenzie or a portfolio manager of the Fundsin response to the determinations referred to above; and

(n) the existence, purpose, duties and obligationsof the Independent Committee, the names of its members, whetherand how they are compensated by the Funds, and the fact thatthey meet the requirements of the condition set out in paragraph(b) are disclosed:

(i) in a press release issued, and a materialchange report filed, prior to reliance on the Decision,

(ii) in item 12 of Part A of the simplifiedprospectus of the Funds, excluding the names of the membersof the Independent Committee which will be provided in theannual information form of the Funds, and

(iii) on Mackenzie's internet website.

July 9, 2003.

SCHEDULE A

NEW FUNDS

SCHEDULE B

FUNDS SET OUT IN FIRST AMENDEDDECISION