Exemption Orders (Discretionary)
TD SECURITIES INC.
2001 BCSECCOM 735
Headnote
Mutual Reliance Review System for Exemptive Relief Applications – relief from the underwriting conflicts requirements to permit a 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 BRITISH COLUMBIA, ALBERTA, ONTARIO, QUEBEC AND NEWFOUNDLAND
AND
IN THE MATTER OF THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS
AND
IN THE MATTER OF TD SECURITIES INC.
DECISION DOCUMENT
WHEREAS the local securities regulatory authorities or regulators (the “Decision Makers”) in British Columbia, Alberta, Ontario, Quebec and Newfoundland (the “Jurisdictions”) have received an application from TD Securities Inc. (“TDSI”) for a decision pursuant to the securities legislation of the Jurisdictions (the “Legislation”) that, in connection with public offerings (the “Offerings”, and each an “Offering”) of medium term notes (the “Notes”) of The Toronto-Dominion Bank (the “Bank”) by means of a short form shelf prospectus, 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 a related issuer (or the equivalent) or a connected issuer (or the equivalent), shall not apply to TDSI;
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 TDSI has represented to the Decision Makers that:
1. The Bank is a Schedule I chartered bank governed by the Bank Act (Canada). The Bank is a reporting issuer under the Legislation and is not, to its knowledge, in default of any applicable requirement of the Legislation.
2. TDSI is a registered dealer under the Legislation. TDSI is a wholly-owned subsidiary of the Bank and its head office is in Toronto. TDSI is not a reporting issuer under the Legislation.
3. The Bank filed a base shelf prospectus dated June 6, 2001 (the “Prospectus”) in all the provinces and territories of Canada and received a (final) receipt therefor dated June 7, 2001.
4. The Prospectus qualifies the distribution of Notes from time to time in an aggregate principal amount of up to $3,000,000,000 (or the equivalent thereof in other currencies) during the period that the Prospectus, including any amendments, remains valid. The Notes may be issued as interest bearing debentures at rates of interest determined by the Bank from time to time, or as non-interest bearing debentures issued at a discount.
5. The Bank proposes to file, from time to time, in all of the provinces and territories of Canada, supplements (each a “Prospectus Supplement”) and/or pricing supplements to the Prospectus. The specific terms of the Notes, including the amount being offered in a particular Offering, the currency, the delivery date, the maturity date, the issue price, the interest rate and payment dates, will be established prior to each Offering and will be set out in the applicable Prospectus Supplement or pricing supplement, as the case may be.
6. The Bank may sell the Notes to one or more purchasers directly or through investment dealers purchasing as principal or as agent (collectively, the “Underwriters” and each an “Underwriter”). Any syndicate of Underwriters may include TDSI.
7. In respect of a particular Offering, the Underwriters will be identified in the applicable Prospectus Supplement. A prospectus certificate signed by each of such Underwriter will be included in such Prospectus Supplement.
8. As the sole shareholder of TDSI, the Bank is a “related issuer” (or its equivalent) of TDSI and may be a “connected issuer” (or the equivalent) of TDSI.
9. TDSI will receive no benefit under the Offering other than such fees or commissions as may be disclosed in the applicable Prospectus Supplement.
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 TDSI in connection with an Offering, provided that:
1. an independent underwriter ( “Independent Underwriter”), as that term is defined in proposed Multi-Jurisdictional Instrument 33-105 Underwriter Conflict published in February, 1998 (the “Proposed Instrument”), participates in such Offering;
2. (a) where at least one registrant acting as Underwriter in connection with such Offering acts as principal, the portion of the Offering that is underwritten by an Independent Underwriter is not less than the lesser of:
(i) 20% of the dollar value of such Offering; and
(ii) the largest portion of such Offering that is underwritten by TDSI or any other registrant that is not an Independent Underwriter; and
(b) where each registrant acting as Underwriter in connection with such Offering acts as agent and is not obligated to act as principal, an Independent Underwriter receives a portion of the total management fees equal to an amount not less than the lesser of:
(i) 20% of the total management fees for such Offering, and
(ii) the largest portion of the management fees paid or payable in connection with such Offering to TDSI or any other registrant that is not an Independent Underwriter;
3. the Independent Underwriter participates in the pricing of the Notes issued in such Offering; and
4. the information specified in Appendix C of the Proposed Instrument including, the name of the Independent Underwriter and the extent of its participation in the pricing and structuring of such Offering and in the due diligence activities performed by the Underwriters, will be contained in the body of the applicable Prospectus Supplement.
DATED at Toronto 29th day of June, 2001.
Paul Moore R. Stephen Paddon