BCSC

Exemption Orders (Discretionary)

BMO NESBITT BURNS INC.

2001 BCSECCOM 702

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 debt securities of the Issuer – Issuer is not a "specified party" as defined in proposed Multi-Jurisdictional Instrument 33-105 Underwriting Conflicts – 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 SECURITIES LEGISLATION OF 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 BMO NESBITT BURNS INC., SCOTIA CAPITAL INC.,
TD SECURITIES INC. AND CIBC WORLD MARKETS INC.

AND

IN THE MATTER OF TORSTAR CORPORATION

MRRS DECISION DOCUMENT

WHEREAS the local 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 BMO Nesbitt Burns Inc., Scotia Capital Inc., TD Securities Inc. and CIBC World Markets Inc. (collectively, the "Applicant Dealers") for a decision under the securities legislation of the Jurisdictions (the "Legislation") that the requirement contained in the Legislation that restricts a registrant from participating in a distribution of securities of a connected issuer (or equivalent) of the registrant unless a specified portion of the distribution is underwritten by one or more independent underwriters (the "Independent Underwriter Requirement") shall not apply to the Applicant Dealers in respect of proposed offerings in one or more series or issues (each, an "Offering" and collectively, the "Offerings") by Torstar Corporation ("Torstar") of Medium Term Notes (the "Notes") to be made by means of a short form base shelf prospectus (the "Prospectus") and a pricing supplement for each particular Offering (each, a "Pricing Supplement") to such Prospectus;

AND WHEREAS under 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 Applicant Dealers and Torstar have represented to the Decision Makers that:

1. The Applicant Dealers are registrants under the Legislation and their head offices are located in the Province of Ontario.

2. Torstar was incorporated on February 6, 1958 under the predecessor legislation of the Business Corporations Act (Ontario). Its registered office is located at One Yonge Street, Toronto, Ontario, M5E 1P9. Torstar is a broadly based information and entertainment communications company with primary interests in the newspaper and book publishing business and their related internet activities.

3. Torstar intends to enter into an agency agreement (the "Agency Agreement") with the Dealers at the time of filing the Prospectus whereby Torstar will agree to issue and sell, and the Applicant Dealers, RBC Dominion Securities Inc. and National Bank Financial Inc. (collectively, the “Dealers”) will agree to solicit, from time to time, offers to purchase, the Notes. Torstar may select other investment dealers ("Additional Dealers") to participate in one or more Offerings. Any Additional Dealers will become parties to the Agency Agreement.

4. One or more of the Dealers or the Additional Dealers will participate as agent or principal in each Offering.

5. Torstar is a party to a long-term revolving credit facility (the "$200 Million Facility") with a syndicate of Canadian banks comprised of The Toronto-Dominion Bank, Canadian Imperial Bank of Commerce and The Bank of Nova Scotia. The credit facility provides Torstar with a facility of up to $200 million.

6. Torstar is also a party to a long-term revolving credit facility (the "$160 Million Facility") with a syndicate of Canadian Banks comprised of The Toronto-Dominion Bank, The Bank of Nova Scotia and Bank of Montreal. The credit facility provides Torstar with a facility of up to $160 million.

7. Torstar is party to a revolving operating credit facility (the "Operating Facility") with Canadian Imperial Bank of Commerce. The Operating Facility provides Torstar with a facility of up to $15 million.

8. The Applicant Dealers are subsidiaries of Canadian chartered banks (the "Banks") which are lenders to Torstar under one or more of the $200 Million Facility, the $160 Million Facility and the Operating Facility (collectively, the "Credit Facilities").

9. Torstar may apply the proceeds of one or more of the Offerings to repay amounts that may be outstanding under one or more of the Credit Facilities from time to time. Certain of the Offerings may proceed without the participation of a Dealer who is not an Applicant Dealer.

10. The Banks will not participate in the decision to make an Offering nor in the determination of the terms of an Offering or in the determination of the use of the proceeds thereof.

11. The Applicant Dealers will not benefit in any manner from an Offering other than through their receipt of payment of their portion of the commissions in connection with an Offering in which they participate.

12. Torstar is not, and will not be, a "related issuer" (or its equivalent), as that term is defined in the Legislation and Proposed Multi-Jurisdictional Instrument 33-105 and Companion Policy 33-105CP on Underwriting Conflicts ("Proposed Instrument 33-105"), of any of the Dealers.

13. By virtue of the Applicant Dealers' relationship with the Banks, Torstar and the Applicant Dealers may be considered connected issuers (or equivalent) for the purposes of the Legislation. Pursuant to the Agency Agreement, the Applicant Dealers may purchase an aggregate amount of one or more Offerings that would constitute a percentage that is greater than would otherwise be permitted by the Legislation.

14. The Pricing Supplement will contain such disclosure concerning the nature of the relationship between Torstar, the Applicant Dealers and the Banks as would be required under Appendix "C" of Proposed Instrument 33-105.

15. Torstar is not in financial difficulty.

16. Torstar is not a "specified party" as that term is defined in Proposed Instrument 33-105.

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 Makers pursuant to the Legislation is that the Independent Underwriter Requirement shall not apply to the Applicant Dealers in respect of the Offerings provided that:

(a) at the time of each Offering, Torstar is not a "specified party" as that term is defined in Instrument 33-105, and Torstar is not a "related issuer" of an Applicant Dealer as that term is defined in Proposed Instrument 33-105; and

(b) if, at the time of an Offering, Torstar is a "connected issuer" of an Applicant Dealer participating in the Offering, the Pricing Supplement relating to such Offering contains disclosure of the relationship between Torstar, the Applicant Dealer and the Bank as would be required under Appendix "C" of Proposed Instrument 33-105.

Dated this 27th day of June, 2001.

Paul Moore John Geller