Synergy Asset Management Inc. and Synergy Canadian Growth Class of Synergy Canadian Fund Inc., Synergy Global Growth Class of Synergy Global Fund Inc.

Headnote

Investment by a mutual fund in securities of another mutual fund in the same family ofmutual funds managed by the same manager to implement a "passive" fund-of-fundstructure exempted from the requirements of clause 111(2)(b), subsection 111(3),clauses 117(1)(a) and 117(1)(d) and clause 118(2)(a), subject to certain specifiedconditions under which a "passive" investment structure may be used.

Statutes Cited

Securities Act (Ontario), R.S.O. 1990, c.S.5, as am. ss. 111(2)(b), 111(3), 113,117(1)(a), 117(1)(d), 117(2), 118(2)(a) and 121(2)(a)(ii)

Rules Cited

National Instrument 81-102 Mutual Funds

WHEREAS the Canadian securities regulatory authority or regulator (the"Decision Maker") in each of the provinces of British Columbia, Alberta, Saskatchewan,Ontario, Nova Scotia, and Newfoundland (the "Jurisdictions") has received anapplication from Synergy Asset Management Inc. ("Synergy" or the "Manager"), on itsown behalf and on behalf of Synergy Canadian Growth Class (the "Top Fund") ofSynergy Canadian Fund Inc. to invest in Synergy Global Growth Class (the "UnderlyingFund") of Synergy Global Fund Inc., for a decision (the "Decision") pursuant to thesecurities legislation of the Jurisdictions (the "Legislation") that the followingrequirements or prohibitions under the Legislation (the "Applicable Legislation") shallnot apply in connection with investments by the Top Fund in the Underlying Fund:

(a) the prohibition against a mutual fund knowingly making or holding an investmentin a person or company in which the mutual fund, alone or together with one ormore related mutual funds, is a substantial securityholder;

(b) the provisions requiring the management company of a mutual fund to file areport relating to the purchase or sale of securities between a mutual fund andany related person or company, or any transaction in which, by arrangementother than an arrangement relating to insider trading in portfolio securities, themutual fund is a joint participant with one or more of its related persons orcompanies; and

(c) the prohibition against a portfolio manager, and in the case of British Columbia'slegislation the mutual fund, knowingly causing an investment portfolio managedby it to invest in any issuer in which a responsible person is an officer or directorunless the specific fact is disclosed to the client and the written consent of theclient to the investment is obtained before the purchase.

AND WHEREAS pursuant to the Mutual Reliance Review System for ExemptiveRelief Applications (the "System"), the Ontario Securities Commission is the principalregulator for this application;

AND WHEREAS Synergy has made the following representations to theDecision Makers:

1. The Top Fund is a class of mutual fund shares of Synergy Canadian Fund Inc.("Canadian Fund"), a corporation established under the laws of the Province ofOntario.

2. The Underlying Fund is a class of mutual fund shares of Synergy Global FundInc. ("Global Fund"), a corporation established under the laws of the Province ofOntario.

3. Synergy is a corporation established under the laws of the Province of Ontarioand is the manager and promoter of the Canadian Fund and the Global Fund,and is also the manager, trustee and promoter of other mutual funds known asthe Synergy family of Mutual Funds.

4. The classes of shares of the Canadian Fund and Global Fund are currentlyqualified for distribution pursuant to simplified prospectuses and annualinformation forms dated September 28, 1999 and May 24, 2000, respectively,and are, together with certain additional funds, expected to be qualified fordistribution pursuant to a multiple simplified prospectus and multiple annualinformation form to be dated September 2000.

5. The Canadian Fund and the Global Fund are reporting issuers in theJurisdictions and are not in default of any requirements of the Legislation or therules or regulations made thereunder.

6. The investment objective of the Top Fund is to obtain long-term capital growthby investing primarily in equity and equity-related securities of Canadian issuers.Although the Top Fund currently invests a portion of its assets directly in foreignsecurities (the "Foreign Securities"), it seeks to achieve its investment in foreignsecurities by investing a substantial portion of the foreign property content of itsportfolio in securities of the Underlying Fund.

7. The investment objective of the Underlying Fund is to obtain long-term capitalgrowth by investing in equity and equity-related securities of foreign issuerssituated primarily in the developed markets represented on the MSCI WorldIndex and companies operating in emerging markets.

8. The Top Fund will invest an amount in the securities of the Underlying Fundsuch that its securities will be "qualified investments" for registered retirementsavings plans, registered retirement income funds, and deferred profit sharingplans ("Registered Plans") under the Income Tax Act (Canada) (the "Tax Act"),and will not constitute foreign property in a Registered Plan.

9. The Top Fund will achieve its investment in foreign securities by investing inshares of the Underlying Fund in an amount (the "Permitted Amount") which is7.5% less than the maximum permitted amount, presently set at 25% of the costamount of its assets and to be increased to 30% after 2000, capable of beingmade as a foreign property investment for Registered Plans (the "ForeignProperty Limit"), but not to exceed 30%. This investment shall be subject to avariation of 2.5% above or below the Permitted Amount. Additional exposure toforeign securities will be achieved through direct investments, but suchcombined investments will not however at any time exceed the Foreign PropertyLimit. The remaining net assets of the Top Fund will be actively managed andwill be invested in the discretion of the Manager in accordance with its statedinvestment objectives.

10. Amendment No. 1 dated June 13, 2000 to the simplified prospectus and annualinformation form dated September 28, 1999 (the "Amendment") for the SynergyMutual Funds, including the Top Fund, was receipted on June 20, 2000 by theDecision Makers in each province and territory in Canada. The Amendment setforth, among other things, the proposed changes to the investment strategy ofthe Top Fund and provided a description of the investments to be made by theTop Fund in shares of the Underlying Fund up to the Permitted Amount.

11. Except to the extent evidenced by this Decision and specified approvals grantedby the Canadian Securities Administrators pursuant to National Instrument81-102 Mutual Funds ("NI 81-102"), the investment by the Top Fund in theUnderlying Fund will be structured to comply with the investment restrictions ofthe Legislation and NI 81-102.

12. To aid in the implementation of the proposed investment strategy of investing insecurities of the Underlying Fund, the Top Fund wishes to dispose of a portionof its existing portfolio of Foreign Securities and to acquire securities of theUnderlying Fund. The most cost effective and efficient way for the Top Fund todo so, is to have the Top Fund sell such portion of its existing Foreign Securitiesto the Underlying Fund and to use the net proceeds therefrom to acquiresecurities of the Underlying Fund (the "Inter-Fund Trade").

13. The Foreign Securities are appropriate investments for the Underlying Fund.

14. There will be no substantial or adverse tax consequences on securityholders ofthe Top Fund or the Underlying Fund arising from either the proposed change ininvestment strategy or the Inter-Fund Trade.

15. the Inter-Fund Trade will be effected at the "current market price" of each foreignsecurity, that is,

(a) if the principal market for the security is a stock exchange or an over-thecounter market, the last independent sale price on such exchange ormarket, or, if there is not a previously reported transaction on suchexchange or market on that day, the average of the current independentbid and current independent offer on such exchange or market; or

(b) if there is not such a principal market, then the average of the highestcurrent independent bid and lowest current independent offer asdetermined on the basis of reasonable inquiry, which inquiry will includeobtaining at least one independent arm's length quote of the bid and offerprice;

(c) for purposes of establishing the current market price, "principal" meansthe stock exchange or over-the-counter market on which the highestvolume of the securities have traded in the 30 trading days immediatelypreceding the date of the Inter-Fund Trade, and "independent" means asale where neither the Manager, nor any other Synergy mutual fund is aparty;

16. the Inter-Fund Trade has been approved by the directors of the Manager asbeing in the best interests of the Top Fund and the Underlying Fund;

17. Appropriate records will be maintained by Synergy of the Inter-Fund Trade whichwill include the date of the transaction, the name of the issuer of the securities,the class or designation of the securities, the amount or number of thesecurities, the amount and means of determining the purchase price and thenext statement of portfolio transactions for the Top Fund and the UnderlyingFund will include a note providing details of the securities so delivered.

18. In the absence of this Decision, pursuant to the Applicable Legislation, as soonas the aggregate holdings by the Top Fund of securities of the Underlying Fundexceed 10% of the outstanding securities of the Underlying Fund, Synergy, andpossibly the Top Fund, would be required to comply with the reporting and otherrequirements of the Applicable Legislation.

19. In the absence of this Decision, pursuant to the Applicable Legislation, (a) theTop Fund is prohibited from knowingly making an investment and knowinglyholding an investment in shares of the Underlying Fund to the extent that theTop Fund, either alone or in combination with other related mutual funds, is asubstantial security holder of the Underlying Fund; and (b) Synergy would berequired to file reports respecting every purchase or sale of shares of theUnderlying Fund by the Top Fund.

20. Because the directors and officers of Synergy are "responsible persons"pursuant to the Applicable Legislation, in respect of the Top Fund and theUnderlying Fund, in the absence of this Decision, Synergy would be prohibitedfrom causing the Top Fund to invest in the Underlying Fund unless the specificfact is disclosed to investors and the written consent of the investors is obtainedbefore the purchase.

21. Due to the corporate structure of the Top Fund, the Underlying Fund andSynergy, the Legislation does not technically prohibit the Inter-Fund Trade,however, the Inter-Fund Trade will be carried out as described above.

22. The investments of the Top Fund in the Underlying Fund represents thebusiness judgement of "responsible persons" (as defined in the Legislation),uninfluenced by considerations other than the best interest of the Top Fund.

AND WHEREAS pursuant to the System, this MRRS Decision Documentevidences the Decision of each Decision Maker;

AND WHEREAS each Decision Maker is satisfied that the test contained in theLegislation that provides the Decision Maker with the jurisdiction to make the Decisionhas been met;

THE DECISION of the Decision Makers pursuant to the Legislation is that theApplicable Legislation shall not apply to prevent the Top Fund from investing in orredeeming the securities of the Underlying Fund;

PROVIDED THAT:

1. the Decision, as it relates to the jurisdiction of a Decision Maker, shall terminateone year after the publication in final form of any legislation or rule of thatDecision Maker dealing with the matters in section 2.5 of NI 81-102; and

2. the Decision shall only apply in respect of investments in, or transactions with,shares of the Underlying Fund that are made by the Top Fund in compliancewith the following conditions:

(a) the Top Fund and the Underlying Fund are under common management;

(b) shares of the Top Fund are offered for sale in the Jurisdiction of theDecision Makers pursuant to a simplified prospectus and annualinformation form (the "Prospectus") which has been filed with andaccepted by the Decision Makers;

(c) shares of the Underlying Fund are offered for sale in the jurisdiction of theDecision Makers pursuant to a simplified prospectus and annualinformation form which has been filed with and accepted by the DecisionMakers;

(d) the Prospectus of the Top Fund will describe the intent of the Top Fund toinvest in the Underlying Fund and discloses the facts set out insubclauses (f) and (g) below, the voting rights of the Top Fund'sshareholders in respect of the Top Fund's holding in the Underlying Fundas set out in subclauses (q) and (r) below, and the availability (uponrequest) to the Top Fund's shareholders of the disclosure documents andfinancial statements of the Underlying Fund as set out in subclause (t)below;

(e) the investment by the Top Fund in shares of the Underlying Fund iscompatible with the fundamental investment objectives of the Top Fund;

(f) the Top Fund's investments in the Underlying Fund may deviate by nomore than 2.5% (the "Permitted Percentage Deviation") above or belowthe Permitted Amount, but only as a result of market fluctuations andwithout any action being taken by Synergy to increase or decrease theTop Fund's investment within the Permitted Percentage Deviation and theTop Fund's additional exposure to foreign securities will be achievedthrough direct investments in Foreign Securities, but such combinedinvestments will not at any time exceed the Foreign Property Limit (the"Permitted Investments");

(g) if at any time, the investments of the Top Fund in the shares of theUnderlying Fund exceeds (or declines below) the Permitted PercentageDeviation, Synergy will make the necessary changes in the Top Fund'sinvestment portfolio at its next valuation date in order to bring itsinvestment in the Underlying Fund up or down to the Permitted Amount;

(h) the Permitted Investments by the Top Fund in the Underlying Fund, asdisclosed in the Prospectus, will not be changed unless the Top Fund'sProspectus is amended to reflect the proposed change or a newprospectus is filed to reflect such change and the securityholders of theTop Fund have either been given at least 60 days prior written notice ofthe proposed change in the Permitted Investments or the proper approvalof the shareholders has been given to the change in the PermittedInvestments at a meeting of shareholders of the Top Fund called for thatpurpose;

(i) except as permitted by this Decision, the Top Fund will not invest in anyother mutual fund;

(j) the Underlying Fund will not invest in another mutual fund;

(k) there are compatible dates for the calculation of the net asset value of theTop Fund and the Underlying Fund for the purpose of the issue andredemption of their respective shares;

(l) no redemption fees or other charges are charged by anyone in respect ofany redemption by the Top Fund of shares of the Underlying Fund ownedby the Top Fund;

(m) no sales charges will be paid by the Top Fund in respect of the purchaseof shares of the Underlying Fund;

(n) no "trailer fees" or other fees or charges are paid in respect of theinvestment by the Top Fund in shares of the Underlying Fund;

(o) the arrangements between or in respect of the Top Fund and theUnderlying Fund are such as to avoid the duplication of managementfees;

(p) no fees and charges of any sort are paid by the Top Fund, the UnderlyingFund, Synergy or the principal distributor of the Top Fund or theUnderlying Fund, or by any affiliate or associate of any of the foregoingentities, to anyone in respect of the Top Fund's purchase, holding, orredemption of the shares of the Underlying Fund;

(q) in the event of the provision of any notice to shareholders of theUnderlying Fund, as required by the constating documents of theUnderlying Fund or by the laws applicable to the Underlying Fund, suchnotice will also be delivered to the shareholders of the Top Fund; allvoting rights attached to the shares of the Underlying Fund which areowned by the Top Fund will be passed through to the shareholders of theTop Fund;

(r) in the event that a shareholders' meeting is called for the UnderlyingFund, all of the disclosure and notice material prepared in connection withsuch meeting will be provided to the shareholders of the Top Fund; suchshareholders will be entitled to direct a representative of the Top Fund tovote the Top Fund's holdings in the Underlying Fund in accordance withtheir direction; and the representative of the Top Fund will not bepermitted to vote the Top Fund's holdings in the Underlying Fund exceptto the extent the shareholders of the Top Fund so direct;

(s) in addition to receiving the annual and, upon request, the semi-annualfinancial statements of the Top Fund, shareholders of the Top Fund willreceive either (i) appropriate disclosure in the financial statements of theTop Fund concerning the Top Fund's investment in the Underlying Fundor (ii) the annual and, upon request, the semi-annual financial statementsof the Underlying Fund in either a combined report, containing both theTop Fund's and the Underlying Fund's financial statements, or in aseparate report containing the Underlying Fund's financial statements;and

(t) to the extent that the Top Fund and the Underlying Fund do not use acombined simplified prospectus, annual information form and financialstatements containing disclosure about the Top Fund and the UnderlyingFund, shareholders of the Top Fund may obtain, upon request, a copy ofthe simplified prospectus and annual information form and the annual andsemi-annual financial statements of the Underlying Fund.

October 10th, 2000.

"J. A. Geller"     "Stephen N. Adams"