Exemption Orders (Discretionary)
RBC DOMINION SECURITIES INC.
2001 BCSECCOM 660
Headnote
Mutual Reliance Review System for Exemptive Relief Applications – relief from the underwriting conflicts requirements to permit registrant to underwrite an offering of securities by a connected party and a related party, subject to certain conditions
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 QUÉBEC, BRITISH COLUMBIA, NEWFOUNDLAND AND ONTARIO
AND
IN THE MATTER OF THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS
AND
IN THE MATTER OF RBC DOMINION SECURITIES INC.
AND
ROYAL BANK OF CANADA
MRRS DECISION DOCUMENT
WHEREAS the securities regulatory authority or regulator (the “Decision Maker”) in each of Québec, British Columbia, Newfoundland and Ontario (the “Jurisdictions”) has received an application from RBC Dominion Securities Inc. (“RBC DS” or the “Filer”) 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 related 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 Filer or to certain other underwriters in connection with the filing of a short form base shelf prospectus (the “Prospectus”) providing for the distributions, from time to time thereunder, (the “Offerings”) of an aggregate amount of up $3,000,000,000 subordinated indebtedness in the form of medium term notes (the “Offered Securities”) of Royal Bank of Canada (the “Bank”);
AND WHEREAS persuant 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 Filer has represented to the Decision Makers that:
1. The Bank is a chartered bank subject to the provisions of the Bank Act (Canada).
2. The Bank is a reporting issuer under the Legislation and is not in default of any requirement of the Legislation.
3. The Prospectus qualifies under National Instrument No. 44-102 (“NI 44-102”) the distribution of debt securities consisting of medium term notes of the Bank (the “Medium Term Notes”). The Prospectus provides that the Medium Term Notes may be offered from time to time (the “Offerings”) in one or more series, in an aggregate principal amount of up to $3,000,000,000 (the “Shelf Amount“) during the period that the receipt for the Prospectus, including any amendments thereto, is valid.
4. The Prospectus provides that the Bank may sell the Medium Term Notes to or through underwriters or dealers, and also may sell the Medium Term Notes to one or more other purchasers, directly or through agents.
5. The Bank also proposes to file in all of the provinces and territories of Canada (the “Jurisdictions”) in accordance with the procedures set out in NI 44-102 from time to time thereafter, pricing supplements (the “Pricing Supplements”) relating to the Medium Term Note program (the “MTN Program”).
6. The Bank will enter into an agency agreement in connection with the MTN Program to, among other things, appoint RBC DS and certain other registrants, and such other registrant or registrants as the Bank may from time to time appoint, as its non-exclusive agents to from time to time solicit offers to purchase Medium Term Notes of the Bank.
7. The Pricing Supplement shall include the following information :
(a) each Pricing Supplement will contain the information specified in Appendix C of Proposed Instrument 33-105 on the basis that the Bank is a related issuer or equivalent of the Filer as such terms are defined in draft Multi-Jurisdictional Instrument 33-105 Underwriting Conflict (the “Proposed Instrument 33-105 “);
(b) each Pricing Supplement will identify each underwriter which is an Independent Underwriter, as defined in Proposed Instrument 33-105, and disclose the role of the Independent Underwriter in the structuring and pricing of the distribution and in the due diligence activities performed by the underwriters for the distribution;
8. At least one independent underwriter (an “Independent Underwriter”), as defined in Proposed Instrument 33-105, will subscribe to at least 20 % of the Offering.
9. Any underwriter or agent, as the case may be, in respect of an Offering shall be identified in the respective Pricing Supplement, and shall in all cases include RBC DS and such other registrants as the Bank may from time to time determine in accordance with applicable laws.
10. The Bank is a related issuer or equivalent of RBC DS as such terms are defined in Proposed Instrument 33-105. RBC-DS is a wholly-owned subsidiary of the Bank.
11. RBC DS proposes to comply, in connection with the Offerings, with the respective provisions of Proposed Instrument 33-105 and NI 44-102 of the Canadian Securities Administrators.
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;
THE DECISION of the Decision Maker, pursuant to the Legislation, is that the Independent Underwriter Requirement shall not apply to RBC DS in respect of the Offering of the Offered Securities provided that:
1. the Independent Underwriter participate in each Offering as stated in paragraph 8 above;
2. the Bank shall disclose in each Pricing Supplement the information required by Appendix C of the Proposed Instrument 33-105;
3. each Pricing Supplement contains the disclosure stated in paragraph 7 above;
4. each Pricing Supplement will describe the role played by Independent Underwriters in the structuring and pricing of the Offering and in the due diligence process.
DATED this 12th days of June, 2001
Me Jean Lorrain
Directeur de la conformité et de l’application