TD Asset Management Inc.

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Relief granted from self-dealing provisions in s. 4.2 of National Instrument 81-102 -- Mutual Funds to permit interfund trades between mutual funds and pooled funds managed by the same manager or an affiliate of the same manager -- inter-fund transfers will comply with conditions in s. 6.1(2) of National Instrument 81-107 - Independent Review Committee for Investment Funds (NI 81-107) including the requirement of independent review committee approval.

Applicable Legislative Provisions

National Instrument 81-102 Mutual Funds, ss. 4.2(1), 4.3(1), 4.3(2), 19.1.

National Instrument 81-107 Independent Review Committee for Investment Funds, s. 6.1(2).

April 27, 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

TD ASSET MANAGEMENT INC.

(the Filer)

AND

THE NI 81-102 FUNDS (as defined below)

DECISION

Background

The principal regulator in the Jurisdiction received an application (the Application) from the Filer on behalf of existing mutual funds and future mutual funds to which National Instrument 81-102 -- Mutual Funds (NI 81-102) applies (each, an NI 81-102 Fund and, collectively, the NI 81-102 Funds) managed by the Filer, or any affiliate of the Filer, (each, TDAM) for a decision (the Exemption Sought) under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) exempting the NI 81-102 Funds from the prohibition in Section 4.2(1) of NI 81-102 to permit the NI 81-102 Funds to purchase debt securities from or sell debt securities to existing mutual funds or future mutual funds managed by TDAM to which NI 81-102 does not apply (each, a Pooled Fund and, collectively, the Pooled Funds) (each purchase or sale of debt securities, an Inter-Fund Trade).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions:

(a) the Ontario Securities Commission is the principal regulator for the Application; and

(b) the Filer has provided notice that Section 4.7 of Multilateral Instrument 11-102 -- Passport System is intended to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland & Labrador, Northwest Territories, Yukon and Nunavut (the Passport Jurisdictions).

Interpretation

Terms defined in National Instrument 14-101 -- Definitions, NI 81-102 or National Instrument 81-107 -- Independent Review Committee for Investment Funds (NI 81-107) have the same meanings in this Decision. Certain other defined terms have the meanings given to them above or below under "Representations".

Representations

1. The Filer's head office is located in Toronto, Ontario.

2. TDAM is, or will be, registered as an investment counsel and portfolio manager or the equivalent in Ontario and each of the Passport Jurisdictions.

3. TDAM is, or will be, the manager and/or portfolio manager of each of the NI 81-102 Funds and the Pooled Funds (each, a Fund, and, collectively, the Funds).

4. Each of the Funds is, or will be, an open-end mutual fund trust or mutual fund corporation. Each NI 81-102 Fund is, or will be, a reporting issuer in one or more of Ontario and the Passport Jurisdictions.

5. The Filer and the Funds are not in default of securities legislation in any jurisdiction of Canada.

6. The securities of the Pooled Funds are or will be qualified for distribution on a private placement basis pursuant to the Legislation and will not be reporting issuers.

7. A Fund may be an associate of TDAM.

8. TDAM may wish to cause an NI 81-102 Fund to engage in Inter-Fund Trades with an NI 81-102 Fund or a Pooled Fund.

9. Sections 4.3(1) and 4.3(2) of NI 81-102 permit an NI 81-102 Fund to purchase exchange traded securities from or sell exchange traded securities to an NI 81-102 Fund or a Pooled Fund and to purchase debt securities from or sell debt securities to an NI 81-102 Fund, provided the terms of Sections 4.3(1) and 4.3(2) are complied with.

10. There is a limited supply of debt securities available to the NI 81-102 Funds and the Pooled Funds.

11. TDAM has established, or will establish, an independent review committee (IRC) in respect of each NI 81-102 Fund in accordance with the requirements of NI 81-107.

12. TDAM will establish an IRC (the members of which may also be members of the IRC of the NI 81-102 Funds) in respect of the Pooled Funds.

13. The IRC of the Pooled Funds will be composed by TDAM in accordance with Section 3.7 of NI 81-107 and will be expected to comply with the standard of care set out in Section 3.9 of NI 81-107.

14. The mandate of the IRC of a Pooled Fund will include approving Inter-Fund Trades between the Pooled Fund and an NI 81-102 Fund on behalf of the Pooled Fund.

15. The IRC of a Pooled Fund will not provide the approval referred to in paragraph 14 unless it has made the determination set out in Section 5.2(2) of NI 81-107.

16. At the time of an Inter-Fund Trade, TDAM will have in place policies and procedures to enable the NI 81-102 Funds to engage in Inter-Fund Trades with NI 81-102 Funds and Pooled Funds.

17. Inter-Fund Trades involving an NI 81-102 Fund will be referred to the IRC of the NI 81-102 Fund under Section 5.2(1) of NI 81-107 for approval on behalf of the NI 81-102 Fund.

18. TDAM will refer the Inter-Fund Trade to the IRC in the manner contemplated by section 5.1 of NI 81-107 and TDAM and the IRC will comply with section 5.4 of NI 81-107 in respect of any standing instructions the IRC provides in respect of an NI 81-102 Fund concerning Inter-Fund Trades.

19. Each Inter-Fund Trade will be consistent with the investment objective of the NI 81-102 Fund or the Pooled Fund, as the case may be.

20. TDAM cannot rely on the exemption from Section 4.2(1) of NI 81-102 in Section 4.3(2) of NI 81-102 because section 4.3(2)(a) of NI 81-102 requires that the Inter-Fund Trade be conducted between mutual funds subject to NI 81-107. The Pooled Funds are not subject to NI 81-107.

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 is that the Exemption Sought is granted provided that the following conditions are satisfied for Inter-Fund Trades:

(a) the IRC of the NI 81-102 Fund has approved the Inter-Fund Trade in respect of the NI 81-102 Fund in accordance with the terms of section 5.2(2) of NI 81-107;

(b) the IRC of the Pooled Fund has approved the Inter-Fund Trade in respect of the Pooled Fund in accordance with the terms of section 5.2(2) of NI 81-107; and

(c) the transaction complies with paragraphs (c) to (g) of subsection 6.1(2) of NI 81-107.