Exemption Orders (Discretionary)

RBC DOMINION SECURITIES INC.


2001 BCSECCOM 384


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 medium term notes 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 SECURITIES LEGISLATION OF ONTARIO BRITISH COLUMBIA, ALBERTA, QUEBEC AND NEWFOUNDLAND

AND

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

AND

IN THE MATTER OF RBC DOMINION SECURITIES INC.

AND

CIBC WORLD MARKETS INC.

AND

SEARS CANADA 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 RBC Dominion Securities Inc. (“RBCDS”) and CIBC World Markets Inc. (“CIBCWM”) (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 (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 independent underwriters, shall not apply to the Filers in respect of each proposed distribution (the “Offerings”) of an aggregate amount of up to $500,000,000 medium term notes (the “Notes”) of Sears Canada Inc. (the “Issuer”) to be made pursuant to a short form shelf prospectus (the “Prospectus”) dated February 9, 2001 which has been filed with the Decision Maker of each of the Jurisdictions and a prospectus supplement (the “Prospectus Supplement”) expected to be filed with the Decision Maker of each of the Jurisdictions.

AND 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 Filers have represented to the Decision Makers that:

1. The Issuer is a corporation governed by the Canada Business Corporations Act. The Issuer’s head office is at 222 Jarvis Street, Toronto, Ontario.

2. The Issuer is a “reporting Issuer” or the equivalent thereof, and to the Filers’ knowledge is not in default, in each of the provinces and territories of Canada.

3. The Issuer is engaged in the retail business.

4. The Issuer’s common shares are listed on the Toronto Stock Exchange Inc.

5. RBCDS will be the lead dealer for certain of the Offerings and its executive and registered office is at 200 Bay Street, Royal Bank Plaza, P. O. Box 50, Toronto, Ontario, M5J 2W7.

6. RBCDS is a corporation governed by the Canada Business Corporations Act and is a wholly owned subsidiary of a Canadian chartered bank, the Royal Bank of Canada (the “Royal Bank”).

7. CIBCWM will be the lead dealer for certain of the Offerings and its head office is at BCE Place, 161 Bay Street, Toronto, Ontario, M5J 2S8.

8. CIBCWM is a corporation governed by the Business Corporations Act (Ontario) and is a wholly owned subsidiary of a Canadian chartered bank, the Canadian Imperial Bank of Commerce (the “CIBC”).

9. In connection with the Offerings, the Issuer has filed the Prospectus with the Decision Makers and a MRRS decision document (a receipt) was issued on February 12, 2001.

10. The Prospectus, together with the Prospectus Supplements, will qualify the distribution of the Notes which may be offered from time to time in an aggregate principal amount of up to $500,000,000.

11. The Filers, together with BMO Nesbitt Burns Inc., Scotia Capital Inc. and TD Securities Inc. (collectively, the “Dealers”) intend to act as the Issuer’s exclusive agents to solicit, from time to time, offers to purchase the Notes.

12. The approximate proportionate share of the initial Offering to be distributed by each of the Dealers is expected to be as follows:

Dealer NameProposed Proportionate Share of the Offerings
      RBCDS 40%
      CIBCWM 30%
      BMO Nesbitt Burns Inc. 10%
      Scotia Capital Inc. 10%
      TD Securities Inc. 10%





13. The Issuer has a credit facility in the amount of $50 million from the Royal Bank and a credit facility from the CIBC in the amount of $50 million (together the "Credit Facilities"). The Issuer intends to draw down on the Credit Facilities in the approximate amount of $100 million to repay certain debentures issued by the Issuer maturing on March 1, 2001. Such amount drawn on the Credit Facilities will be repaid from the net proceeds of the Offerings.

14. The Royal Bank or the CIBC did not participate, and will not in the future participate, in any decision to make the Offerings of the Notes under Prospectus Supplements nor in the determination of the terms of the Offerings or the use of proceeds thereof.

15. BMO Nesbitt Burns Inc., Scotia Capital Inc. and TD Securities Inc. are independent dealers (collectively, the “Independent Dealers”) within the meaning in the proposed Multi-jurisdiction Instrument 33-105 – Underwriters Conflicts (the “Proposed Instrument”). The Independent Dealers will distribute at least 20% of the Notes distributed during each Offering conducted while the Credit Facilities remain outstanding, and have been and will participate in the due diligence relating to the Offerings and in the structuring and pricing of the Offerings.

16. The Filers will not benefit in any manner from the distribution of the Notes other than the payment of the fees in connection with the distribution of such Notes.

17. By virtue of the Credit Facilities, the Issuer may, in connection with the Offerings, be considered a “connected issuer” or the equivalent to each of RBCDS and CIBCWM pursuant to the Legislation.

18. The Issuer is not a “related issuer” or the equivalent to the Filers or any other Dealers within the meaning of the Proposed Instrument.

19. The nature and details of the relationship between the Issuer and the Filers will be described in the Prospectus Supplement and the Prospectus Supplement will contain the information specified in Appendix “C” of the Proposed Instrument with respect of each Offering made while the Credit Facilities remain outstanding.

20. The Issuer is not a “specified party” within the meaning of the Proposed Instrument.

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;

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

DATED this 8th day of March, 2001.


J.A. Geller Robert W. Davis
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