Exemption Orders (Discretionary)
LAURENTIAN BANK SECURITIES INC.
2001 BCSECCOM 620
Headnote
Mutual Reliance Review System for Exemptive Relief Applications - Issuer is a “connected issuer,” and a “related issuer,” of registrants that are to act as underwriters in a proposed distribution of debentures of the Issuer - Issuer is not a “specified party” as defined in Draft Multi-Jurisdictional Instrument 33-105 - Underwriting Conflicts – independent underwriter to underwrite 20% of the Offering - registrant underwriters exempted from independent underwriter requirements.
Applicable British Columbia Provisions
Securities Act, R.S.B.C. 1996, c. 418, s. 48
Securities Rules, B.C. Reg. 194/97, s. 78(2)(b)
IN THE MATTER OF THE SECURITIES LEGISLATION OF THE BRITISH COLUMBIA, ALBERTA, ONTARIO, QUÉBEC AND NEWFOUNDLAND
AND
IN THE MATTER OF THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS
AND
IN THE MATTER OF LAURENTIAN BANK SECURITIES INC.
AND THE LAURENTIAN BANK OF CANADA
MRRS DECISION DOCUMENT
WHEREASthe securities regulatory authority or regulator (the "Decision Maker") in each of British Columbia, Alberta, Ontario, Québec and Newfoundland (the "Jurisdictions") has received an application from Laurentian Bank Securities Inc. (the “Applicant”) for a decision, pursuant to the securities legislation of the Jurisdictions (the "Legislation"), that the requirement (the ‘’Independent Underwriter Requirement’’) contained in the Legislation which restricts a registrant from acting as an underwriter in connection with the distribution of securities of a related issuer will not apply to the Applicant in connection with the proposed public offering of Series 9 Debentures (the “Offering”) of the Laurentian Bank of Canada (the "Issuer") by means of a prospectus.
AND WHEREASpursuant to the Mutual Reliance Review System for Exemptive Relief Applications (the "System"), the Commission des valeurs mobilières du Québec is the principal regulator for this application;
AND WHEREASthe Applicant has represented to the Decision Makers that:
1. The Issuer is a Canadian chartered bank with activities across Canada and is constituted pursuant to the Bank Act (Canada). Its head offices are located at 1981 McGill College Avenue, Montreal, Québec. On November 12, 1997, the Issuer was continued as a listed bank in Schedule I of the Bank Act (Canada).
2. The Issuer is a reporting issuer under the Legislation and is not in default of any requirement of the Legislation.
3. The Issuer intends to file a preliminary prospectus (the "Preliminary Prospectus") within the next few days and also intends to file a final prospectus (" Prospectus") during May 2001 in order to qualify the Offering.
4. The Issuer intends to enter into an underwriting agreement with the Applicant and, at least one other underwriter (collectively, the "Underwriters"), pursuant to which the Issuer will agree to create, issue and sell the Debentures and the Underwriters will purchase said Debentures.
5. At least one independent underwriter (an "Independent Underwriter"), as defined in draft Multi-Jurisdictional Instrument 33-105 Underwriting Conflict (the "Proposed Instrument"), will subscribe to at least 20 % of the Offering.
6. The Issuer is considered to be a related issuer (or its equivalent) of the Applicant, as defined in the Legislation for the purpose of the Offering because the Applicant is a wholly-owned subsidiary of the Issuer.
7. The Issuer will not, at the time of the Offering, be a related issuer of any of the Independent Underwriters.
8. Because the Issuer is a related and connected issuer of the Applicant, the proposed underwriting syndicate will not comply with the applicable requirements under the Legislation.
9. The Applicant is registered under the applicable regulations in the categories of broker and investment dealer.
10. The requirement that an Independent Underwriter be part of the underwriting syndicate will be fulfilled since the Independent Underwriters will subscribe to at least 65% of the Offering and an Independent Underwriter will subscribe to at least 20% of the Offering.
11. The Prospectus shall include the following information:
(a) the information requested in Appendix C of the Proposed Instrument;
(b) a statement to the effect that an Independent Underwriter is subscribing to at least 20% of the Offering and that such Independent Underwriter has actively participated in the due diligence process and in the pricing of the Offering. Each Underwriter, including the Independent Underwriters, will execute the certificate pages in the Prospectus; and
(c) the Independent Underwriters will be identified in the Prospectus and their role in the structuring and pricing of the Offering and in the due diligence activities performed by the Underwriters shall be described in the Prospectus.
12. The nature and details of the relationship between the Issuer and the Applicant is described in the Preliminary Prospectus.
13. The Applicant will receive no benefit other than the payment of its portion of its underwriter’s fees in connection with the Offering.
AND WHEREAS pursuant to the System, this MRRS Decision Document evidences the decision of each Decision Maker (the "Decision");
AND WHEREASeach 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;
The Decision of the Decision Makers, pursuant to the Legislation, is that the Independent Underwriter Requirement shall not apply to the Applicant in connection with the Offering provided that:
1. the Independent Underwriters participate in the Offering as stated in paragraph 5 above;
2. the Issuer shall disclose in its prospectus the information required by Appendix C of the Proposed Instrument;
3. the Prospectus shall describe the relationship between the Issuer and the Underwriters; and
4. the Prospectus will describe the role played by the Independent Underwriters in the structuring and pricing of the Offering and in the due diligence process.
DATED this 22 th days of May, 2001
Me Jean Lorrain
Directeur de la conformité et de l’application