Exemption Orders (Discretionary)

SCOTIA CAPITAL INC.


2001 BCSECCOM 550


Headnote

Mutual Reliance Review System for Exemptive Relief Applications – Issuer is a “connected issuer,” but not a “related issuer,” of the registrants that are to act as underwriters in a proposed distribution of securities of the Issuer – Issuer is not a “specified party” as defined in proposed Multi-Jurisdictional Instrument 33-105 Underwriting Conflicts – Registrant underwriters exempted from independent underwriter requirements provided that, at the time of the distribution, the issuer is not a “specified party” as defined in the proposed Instrument, and, in the case of each registrant, is not a “related issuer.”

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 CANADIAN SECURITIES LEGISLATION OF QUEBEC, BRITISH COLUMBIA, ALBERTA, ONTARIO AND NEWFOUNDLAND

AND

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

AND

IN THE MATTER OF SCOTIA CAPITAL INC., TD SECURITIES INC.,
NATIONAL BANK FINANCIAL INC., RBC DOMINION SECURITIES INC., BMO NESBITT BURNS INC. AND TRILON SECURITIES CORPORATION
AND ASTRAL MEDIA INC.

MRRS DECISION DOCUMENT

WHEREAS the securities regulatory authority or regulator (the “Decision Maker”) in each of Ontario, British Columbia, Alberta, Quebec and Newfoundland (the “Jurisdictions”) has received an application from Scotia Capital Inc., TD Securities Inc., National Bank Financial Inc., RBC Dominion Securities Inc., BMO Nesbitt Burns Inc. and Trilon Securities Corporation (collectively, the “Underwriters”) for a decision pursuant to the securities legislation of Ontario, British Columbia, Alberta, Quebec and Newfoundland (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 a distribution of securities of an issuer made by means of prospectus, where the issuer is a connected issuer (or the equivalent) of the registrant unless a portion of the distribution at least equal to that portion underwritten by non-independent underwriters is underwritten by an independent underwriter, shall not apply to the Underwriters in respect of a proposed distribution (the “Offering”) of Class A Non-Voting Shares of Astral Media Inc. (the “Issuer”) to be made by means of a prospectus (the “Prospectus”);

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 Issuer and the Underwriters have represented to the Decision Makers that:

1. The Issuer was continued under the Canada Business Corporations Act by Certificate of Continuance dated August 27, 1986.

2. The Class A shares of the Issuer are listed on The Toronto Stock Exchange.

3. The head office of the lead underwriter, Scotia Capital Inc., is in Ontario.

4. The Issuer is a reporting issuer under the Legislation and is not in default of any requirement under the Legislation.

5. The Issuer filed a preliminary prospectus dated March 12, 2001 (the “Preliminary Prospectus”) in all Canadian provinces in order to qualify the distribution of 2,130,000 Class A Non-Voting Shares at a price of $ 47/per share.

6. Pursuant to the terms of an underwriting agreement (the “Underwriting Agreement”) between the Issuer and the Underwriters, the Underwriters will agree to act as underwriters in connection with the Offering. The proportionate share of the Offering to be underwritten by each of the Underwriters is as follows:
Scotia Capital Inc.45%
TD Securities Inc.15%
CIBC World Markets Inc.10%
National Bank Financial Inc.10%
RBC Dominion Securities Inc.10%
BMO Nesbitt Burns Inc.8%
Trilon Securities Corporation2%

7. Timothy R. Price, a Director of the Issuer, is Chairman of Trilon Financial Corporation, an affiliate of Trilon Securities Corporation (“Trilon”).

8. The Issuer has an agreement with a syndicate of financial institutions (the “Syndicate”) for a revolving facility of up to $60 million and an acquisition facility of up to $145 million (collectively, the “Facilities”). Each of Scotia Capital Inc., RBC Dominion Securities Inc., TD Securities Inc., BMO Nesbitt Burns Inc. and National Bank Financial Inc. is controlled by a Canadian chartered bank: the Scotia Bank, the Royal Bank, the Toronto-Dominion Bank, the Bank of Montreal and the National Bank, respectively (the “Banks”), each of which is a member of the Syndicate and accordingly, the Issuer may be a connected issuer of the Banks. The Scotia Bank, the Royal Bank, the Toronto-Dominion Bank, the Bank of Montreal and the National Bank are responsible for 17.07%, 21.95%, 14.63%, 17.07% and 21.95% respectively, of any sums borrowed under the Facilities.

9. As of the date hereof, there are no amounts outstanding under the Facilities.

10. The Issuer is not a “related issuer”, as defined in Section 1.2(2) of the proposed Multi-Jurisdictional Instrument 33-105, Underwriting Conflicts (“33-105") of any of the Underwriters for the purposes of the Offering. In addition, the Issuer is not a “specified party”, as the term is defined in Section 3.2(b)(i)(A) of 33-105.

11. The Banks did not participate in the decision to make the Offering nor in the determination of the terms of the Offering.

12. The Underwriters will not benefit in any manner from the Offering other than the payment of their fee in connection with the Offering.

13. CIBC World Markets Inc., one of the Underwriters of the Offering, and Trilon Securities Corporation are not members of the Syndicate under the Facilities.

14. The disclosure required by Schedule C to 33-105 is contained in the Preliminary Prospectus and will be contained in the Prospectus which will disclose the nature of the relationship between the Issuer and the Underwriters.

15. The Issuer is not in financial difficulty, is not under any financial pressure to proceed with the Offering and is not in default in any of its obligations.

16. The certificate in the Prospectus will be signed by each of the Underwriters as required by the legislation.

AND WHEREAS pursuant to the System, this MRRS Decision Document evidences thedecision 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;

THE DECISION of the Decision Makers, under the Legislation is that the Independent Underwriter Requirement shall not apply to the Underwriters in connection with the Offering provided the Issuer is not a related issuer, as defined in 33-105, to the Underwriters at the time of the Offering and is not a specified party, as defined in the 33-105, at the time of Offering.

DATED this 21st day of March, 2001.



J.A. Geller R. Stephen Paddon
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