Exemption Orders (Discretionary)

FRASER MILNER CASGRAIN


2001 BCSECCOM 29


Headnote

Mutual Reliance Review System for Exemptive Relief Applications – relief from the registration and prospectus requirements with respect to the distribution of limited partnership units and notes to individuals, professionals and family trusts connected to the issuer.

Applicable British Columbia Provisions

Securities Act, R.S.B.C. 1996, c. 418, s. 48, 76


IN THE MATTER OF THE SECURITIES LEGISLATION OF ALBERTA,BRITISH COLUMBIA, ONTARIO AND QUÉBEC

AND

IN THE MATTER OF THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OFFRASER MILNER CASGRAIN AND
FM SERVICES LIMITED PARTNERSHIP

MRRS DECISION DOCUMENT


1. WHEREAS the local securities regulatory authority or regulator (the "Decision Maker") in each of Alberta, British Columbia, Ontario and Québec (the "Jurisdictions") has received an application from Fraser Milner Casgrain (“FMC”) and FM Services Limited Partnership (“FM Services”) for a decision under the securities legislation of the Jurisdictions (the “Legislation”) that the requirements under the Legislation to be registered to trade in a security (the “Registration Requirement”) and to file and obtain a receipt for a preliminary prospectus and a prospectus (the “Prospectus Requirement”) shall not apply to distributions by FM Services of certain securities;

2. AND WHEREAS under the Mutual Reliance Review System for Exemptive Relief Applications (the "System"), the Alberta Securities Commission is the principal regulator for this application;

3. AND WHEREAS FMC and FM Services have represented to the Decision Makers that:

3.1. FMC is a general partnership with offices in the Jurisdictions;

3.2. the partners of FMC are individual lawyers or professional corporations (together with the individual lawyers who control partners which are professional corporations, the “FMC Partners”);

3.3. FM Services is a limited partnership established under the laws of the Province of Ontario;

3.4. FM Services is governed by a limited partnership agreement dated December 18, 1995 and subsequently amended and restated on various dates (the “Limited Partnership Agreement”);



3.5. FM Services provides secretarial, accounting, administrative and financial services to FMC for fees;

3.6. FM Services is not a reporting issuer or the equivalent in any of the Jurisdictions;

3.7. the general partner of FM Services is FM Services Business Trust (the “General Partner”);

3.8. the authorized capital of FM Services includes an unlimited number of limited partnership units (“Units”);

3.9. under the Limited Partnership Agreement, FM Services may only issue Units to FMC Partners and trusts established for the benefit of FMC Partners and their family members (“Family Trusts”);

3.10. the beneficiaries of Family Trusts are restricted to the following (the “Eligible Beneficiaries”):

3.10.1. an FMC Partner;

3.10.2. the spouse of an FMC Partner;

3.10.3. the issue of an FMC Partner or spouse of an FMC Partner;

3.10.4. the parents of an FMC Partner or spouse of an FMC Partner;

3.10.5. the grandparents of an FMC Partner or spouse of an FMC Partner; and

3.10.6. a family trust whose beneficiaries are any one or a combination of the above;

3.11. a Family Trust shall cease to hold Units in the event that:

3.11.1. the beneficiaries of the Family Trust are not Eligible Beneficiaries;

3.11.2. the Family Trust purports to transfer the Units held by it; or

3.11.3. the General Partner, in its sole discretion, so determines and such determination has not been revoked by a resolution of the Unit holders within 30 days;

3.12. except for an FMC Partner who is a trustee of a particular Family Trust, no beneficiary of a Family Trust will contribute any monies into the Family Trust, be liable for any amount in respect of the Family Trust or be involved in the making of any investment decision by the Family Trust;

3.13. an FMC Partner shall cease to hold Units in the event that they cease to be a partner of FMC;

3.14. holders of Units may not transfer them, except to FM Services for cancellation;

3.15. FM Services provides holders of Units with its annual audited financial statements within 120 days of its financial year end;

3.16. under the Limited Partnership Agreement, FM Services may issue secured promissory notes (the “Notes”) to FMC Partners and Family Trusts from time to time;

3.17. holders of Notes may not transfer them, except with the consent of FM Services;

3.18. FM Services will only consent to the transfer of a Note where the transfer is to FM Services for cancellation, to another FMC Partner or Family Trust or consists of a pledge of the Note to a lending institution as security for indebtedness incurred for the purpose of financing the acquisition or continued ownership of the Note;

3.19. FM Services and FMC provide holders of Notes with their annual audited financial statements within 120 days of their financial year end;

3.20. as of February 1, 2000, there will be FMC Partners or Family Trusts resident in each of the Jurisdictions;

3.21. all of the outstanding Units are currently held by Family Trusts, such Units having been issued in reliance on exemptions from the Registration Requirement and Prospectus Requirement granted under various local orders of certain of the Decision Makers;

3.22. all of the outstanding Notes are currently held by individual FMC Partners and Family Trusts, such Notes having been issued in reliance on exemptions from the Registration Requirement and Prospectus Requirement granted under various local orders of certain of the Decision Makers;

3.23. FM Services wishes to be able to issue Units and Notes to Family Trusts and FMC Partners in the future;

4. AND WHEREAS under the System, this MRRS Decision Document evidences the decision of each Decision Maker (collectively, the “Decision”);

5. 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;

6. THE DECISION of the Decision Makers is that the distribution of Units and Notes by FM Services to FMC Partners or Family Trusts shall not be subject to the Registration Requirement or the Prospectus Requirement, provided that any further trade of Units or Notes acquired in reliance on this Decision shall be deemed to be a distribution under the Legislation of the Jurisdiction where the trade occurs unless made to a financial institution for the purpose of giving collateral for a bona fide debt or to FM Services, a FMC Partner or a Family Trust.

DATED at Calgary, Alberta this 22nd day of December, 2000.



Glenda A. Campbell, Vice-Chair Wendy E. Best, Q.C., Member
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