Exemption Orders (Discretionary)
CANADIAN IMPERIAL BANK OF COMMERCE
2001 BCSECCOM 386
Headnote
Mutual Reliance Review System for Exemptive Relief Applications – Relief from the insider reporting requirements for directors of a reporting issuer regarding purchases of securities under an automatic share purchase plan subject to certain conditions.
Applicable British Columbia Provisions
Securities Act, R.S.B.C. 1996, c. 418, s. 87, 91(1)(b)
IN THE MATTER OF THE SECURITIES LEGISLATION OF BRITISH COLUMBIA, ALBERTA AND ONTARIO
AND
IN THE MATTER OF THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS
AND
IN THE MATTER OF CANADIAN IMPERIAL BANK OF COMMERCE
MRRS DECISION DOCUMENT
WHEREAS the Canadian securities regulatory authority or regulator (the “Decision Maker”) in each of British Columbia, Alberta and Ontario (the “Jurisdictions”) has received an application from Canadian Imperial Bank of Commerce (the “Applicant”) for a decision pursuant to the securities legislation of the Jurisdictions (the “Legislation”) that the requirement contained in the Legislation for an insider of a reporting issuer to file insider reports (the “Insider Reporting Requirement”) shall not apply to certain directors of the Applicant with respect to their acquisition of Common Shares (defined below) under the Applicant’s Director Deferred Share Unit/Common Share Election Plan (the “Plan”), subject to certain conditions;
AND WHEREAS pursuant to the Mutual Reliance Review System for Exemptive Relief Applications (the “System”), the Ontario Securities Commission is the Principal Regulator for this application;
AND WHEREAS the Applicant has represented to the Decision Makers that:
1. The Applicant is a Schedule 1 Canadian chartered bank governed by the Bank Act (Canada) and is a reporting issuer in each of the provinces of Canada and is not in default of any requirements of the securities legislation of each province of Canada. The Applicant’s head office is located in Toronto, Ontario.
2. The authorized share capital of the Applicant consists of an unlimited number of common shares without par value, the aggregate consideration of which shall not exceed $10,000 million (the "Common Shares"), and an unlimited number of Class A preferred shares and Class B preferred shares without par value, issuable in series, the aggregate consideration of which shall not exceed $5,000 million for each class. As at October 31, 2000, 377,140,195 Common Shares were issued and outstanding.
3. The Common Shares are listed and posted for trading on the Toronto, New York and London stock exchanges.
4. CIBC has established the Plan for directors of CIBC who are not officers or employees of CIBC or its subsidiaries (each, an “Eligible Director”).
5. Under the Plan, an Eligible Director must elect to receive a portion of his or her annual board retainer (the “Annual Amount”) in either: (a) deferred share units (“DSUs”) or (b) Common Shares. A DSU represents the right to receive the equivalent value of a Common Share in cash at the time that an Eligible Director ceases to be a director.
6. Once an Eligible Director makes his or her election, the election remains in effect unless changed by the Eligible Director. An Eligible Director may change his or her election by giving notice to CIBC’s Corporate Secretary at least 30 days before the commencement of a fiscal year.
7. The Annual Amount is payable quarterly in arrears for the periods ended January 31, April 30, July 31 and October 31 in each fiscal year.
8. If an Eligible Director elects to receive his or her Annual Amount in Common Shares then, on a quarterly basis, CIBC pays the Annual Amount, net of applicable withholding tax, to the Eligible Director’s discount brokerage account.
9. Each Eligible Director maintains his or her account at CIBC Investor’s Edge. The Annual Amount is used to purchase Common Shares through the facilities of The Toronto Stock Exchange at such times as CIBC’s insider policies permit.
10. Once an Eligible Director makes his or her election under the Plan, the timing of the acquisition of Common Shares, the number of Common Shares acquired and the price payable for the Common Shares are all determined by the criteria set out in the Plan.
11. The Plan is an "automatic securities purchase plan" as such term is defined in proposed National Instrument 55-101 – Exemption From Certain Insider Reporting Requirements.
12. Unless the decision sought is granted, and failing any other exemptive relief, each Eligible Director who elects to receive Common Shares under the Plan would be subject to the Insider Reporting Requirement each time he or she acquired Common Shares under the Plan.
AND WHEREAS, pursuant to the System, this MRRS Decision Document evidences the decision of each Decision Maker (collectively, the “Decision”);
AND WHEREAS each of the Decision Makers is satisfied that the test contained in the Legislation that provides the Decision Maker with the jurisdiction to make the Decision has been met;
IT IS THE DECISION of the Decision Makers pursuant to the Legislation that the Insider Reporting Requirement shall not apply to the acquisition by an Eligible Director of Common Shares pursuant to the Plan, provided that:
(a) each Eligible Director who relies on the exemption provided for by this Decision shall report, in the form prescribed for insider trading reports under the Legislation, all acquisitions of Common Shares under the Plan that have not been previously reported by or on behalf of the Eligible Director,
(i) for any Common Shares acquired under the Plan which have been disposed of or transferred, within the time required by the Legislation for reporting the disposition or transfer; and
(ii) for any Common Shares acquired under the Plan during a calendar year which have not been disposed of or transferred, within 90 days of the end of the calendar year; and
(b) the exemption provided for by this Decision is not available to an Eligible Director who beneficially owns, directly or indirectly, voting securities of the Applicant, or exercises control or direction over voting securities of the Applicant or a combination of both, that carry more than 10% of the voting rights attached to the Applicant's outstanding voting securities.
DATED this 30th day of March, 2001.
Iva Vranic