Exemption Orders (Discretionary)

QUEBECOR WORLD INC.

2001 BCSECCOM 263

Headnote

Mutual Reliance Review System for Exemptive Relief Applications - Relief granted from certain underwriting conflict provisions of the Rules on the basis that if proposed Multi-Jurisdictional Instrument 33-105 Underwriting Conflicts was in effect, no such relief would be required. The issuer is a “connected issuer” of the applicant underwriters but is neither a “related issuer” nor a “specified party”, as defined in 33-105.

Applicable British Columbia Provisions

Securities Act, R.S.B.C. 1996, c. 418, s. 48
Securities Rules, R.B.C. Reg. 194/97, s. 78

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

AND

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

AND

IN THE MATTER OF QUEBECOR WORLD INC.

AND

IN THE MATTER OF
BMO NESBITT BURNS INC.
RBC DOMINION SECURITIES INC.
SCOTIA CAPITAL INC.
CIBC WORLD MARKETS
NATIONAL BANK FINANCIAL INC.
TD SECURITIES INC.

MRRS DECISION DOCUMENT

WHEREAS the securities regulatory authority or regulator (the “Decision Maker”) in each of Alberta, British Columbia, Newfoundland, Québec and Ontario (the “Jurisdictions”) has received an application from BMO Nesbitt Burns (“BMO”), RBC Dominion Securities Inc. (“RBC”), Scotia Capital Inc. (“Scotia”), CIBC World Markets Inc. (“CIBC”), National Bank Financial Inc. (“NBF”) and TD Securities Inc. (“TD”) (collectively, the “Filers”) 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 a distribution of securities by an issuer made by means of a prospectus where the issuer is a connected issuer of the registrant unless a portion of the distribution at least equal to that portion underwritten by non-independent underwriters is underwritten by independent underwriters shall not apply to the Filers in respect of a proposed distribution (the “Offering”), for an aggregate principal amount of $150 million ($200 million, if the option granted to the underwriters is exercised in full), of 6.75% Cumulative Redeemable First Preferred Shares, Series 4 (the “Offered Securities”) of Quebecor World Inc. (the “Issuer”), pursuant to a short form prospectus (the “Prospectus”);

AND WHEREAS pursuant 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 WHEREAS the Filers have represented to the Commissions that:

1 The Issuer was incorporated under the Canada Business Corporation Act on February 23, 1989 and its head office is located in Montreal, Quebec.

2 The issuer is a reporting issuer under the Legislation of each Jurisdiction and is not in default of any requirements of the Legislation.

3 The Issuer is a diversified global commercial printing company and it is the largest commercial printer in the world.

4 The Issuer's Subordinate Voting Shares are listed on The Toronto Stock Exchange and on the New York Stock Exchange, its Series 2 Cumulative Redeemable First Preferred Shares are listed on The Toronto Stock Exchange and its Multiple Voting Shares are not publicly traded.
5 The Issuer's parent company is Quebecor Inc. which, as of February 7, 2001, held 56,211,277 Multiple Voting Shares of Quebecor World, representing approximately 84.9% of the voting interest in the Issuer.

6 On February 9, 2001, the Issuer entered into an underwriting agreement with a syndicate of underwriters including the Filers and Merrill Lynch Canada Inc. («Merrill Lynch», collectively the «Underwriters») whereby the Issuer has agreed to issue and sell, and the Underwriters have agreed to purchase, as principals, the Offered Securities.

7 The proportionate share of the Offering to be underwritten by each of the Underwriters is as follows:

Underwriter	Proportionate Share
Nesbitt	20%
RBC	20%
Scotia	20%
CIBC	12%
NBF	12%
Merrill Lynch	8%
TD	8%
	100%

8 On February 9, 2001, the Issuer filed a preliminary short form prospectus (the “Preliminary Prospectus”) under the Mutual Reliance Review System for Prospectuses. Québec has been designated as principal regulator in connection with the filing of the Preliminary Prospectus. The Issuer will file a final short form Prospectus on or about February 20, 2001, pursuant to which the Issuer will issue the Offered Securities.

9 BMO is a wholly-owned subsidiary of BMO Nesbitt Burns Corporation Limited, an indirect majority-owned subsidiary of the Bank of Montreal. RBC is an indirect wholly-owned subsidiary of the Royal Bank of Canada. Scotia is a wholly-owned subsidiary of the Bank of Nova Scotia. CIBC is a wholly-owned subsidiary of the Canadian Imperial Bank of Commerce. NBF is an indirect wholly-owned subsidiary of the National Bank of Canada. TD is a wholly-owned subsidiary of the Toronto-Dominion Bank.



10 The Bank of Montreal, the Royal Bank of Canada, the Bank of Nova Scotia, the Canadian Imperial Bank of Commerce, the National Bank of Canada and the Toronto-Dominion Bank are hereinafter referred to as the “Related Banks”.

11 As at December 31, 2000, Quebecor Inc.'s syndicated credit facilities, which included facilities of Quebecor Inc., Quebecor World, Quebecor Media Inc., Videotron Ltd. and Sun Media Corporation (the “Quebecor Group Facilities”) provided for an aggregate maximum availability of CDN$6.925 billion.

12 As of December 31, 2000, the total indebtedness under the Quebecor Group Facilities to the Related Banks stood at approximately CDN$2.833 billion.

13 By virtue of its indebtedness to the Related Banks, Quebecor World may be considered a connected issuer (or the equivalent) to each of the Filers within the meaning of the Legislation and the proposed Multi-Jurisdictional Instrument No 33-105 – Underwriting Conflicts («Proposed Instrument 33-105»). The Issuer is not a "related issuer" (or equivalent) within the meaning of the Legislation or Proposed Instrument 33-105 of the Filers.

14 The Underwriters, in connection with the Offering, do not comply with the proportional requirements set out in the Legislation.

15 The Prospectus will contain the information specified in Appendix "C" of the Proposed Instrument.

16 The decision to issue the Offered Securities, including the determination of the terms of such distribution, has been made through negotiations between the Issuer and the underwriters without the involvement of the Related Banks.

17 The Issuer is in good financial condition.

18 The Issuer is not a “specified party”, as defined in Proposed Instrument 33-105.

19 The net proceeds of the Offering, which are estimated to be CDN $145 million or CDN$194 million if the option granted to the Underwriters is exercised in full), will be used to invest in capital expenditures and to fund other general corporate purposes.

20 The Underwriters will not benefit in any matter from the Offering other than the payment of their fees in connection therewith.

21 The certificate required by the Legislation in each of the Preliminary Prospectus and the Prospectus will be signed by the Underwriters.

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 Makers with the jurisdiction to make the Decision has been met;

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

DATED at Montreal, this 20th day of February 2001.


Jean Lorrain
Directeur de la conformité et de l’application