Exemption Orders (Discretionary)

BMO NESBITT BURNS INC.


2001 BCSECCOM 460


Headnote

Mutual Reliance Review System for Exemptive Relief Applications - Issuer is a “connected issuer,” but not a “related issuer,” of registrants that are to act as underwriters in a proposed distribution of the Issuer - Registrant underwriters exempted from independent underwriter requirements, provided that, at the time of the distribution, issuer is not a "specified party” as defined in Draft Multi-Jurisdictional Instrument 33-105 - Underwriting Conflicts, and the Issuer is not a “related issuer” to any of the underwriters.

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 CANADIAN SECURITIES LEGISLATION OF THE PROVINCES OF ALBERTA, BRITISH COLUMBIA, NEWFOUNDLAND, QUEBEC AND ONTARIO

AND

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

AND

IN THE MATTER OF BMO NESBITT BURNS INC. AND CANBRAS COMMUNICATIONS CORP.

MRRS DECISION DOCUMENT

WHEREAS an application has been received by the Alberta Securities Commission, the British Columbia Securities Commission, the Securities Commission of Newfoundland, the Québec Securities Commission and the Ontario Securities Commission (the “Decision Makers”) from BMO Nesbitt Burns Inc. (“NB”) (the “Filer”) for a decision pursuant to the Canadian securities legislation (the “Legislation”) of Alberta, British Columbia, Newfoundland, Québec and Ontario (the “Jurisdictions”) that the restrictions against acting as an underwriter with respect to the conflict interest rules contained in the Legislation (“Independent Underwriter Requirement”) shall not apply to the Filer in connection with a proposed public offering (the “Offering”) by Canbras Communications Corp. (the “Corporation”) to its registered holders of common shares (the “Common Shares”) of rights (the “Rights”) to subscribe for additional Common Shares by way of a prospectus (the “Prospectus”) to be filed with all securities commissions in Canada.

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 Jurisdiction for this application;

AND WHEREAS the Filer has represented to the Decision Makers that:

1. The Corporation was incorporated under the Company Act (British Columbia) on August 7, 1986 and was continued under the Canada Business Corporations Act on June 22, 1998;

2. The head office of the Corporation is located in Montreal;

3. The Corporation was recognized as a reporting issuer under the Legislation of the Principal Jurisdiction in April 2000, with such status deemed effective as of August 1987;

4. The Corporation has filed an undertaking to file all continuous disclosure documents that they would be required to file under the Legislation in Newfoundland, New-Brunswick, Prince Edward Island and Manitoba until they are recognized as a reporting issuer in such jurisdictions;

5. The Corporation is also a reporting issuer under the Legislation of the following jurisdictions: British-Columbia, Alberta, Saskatchewan, Ontario and Nova-Scotia;

6. The Common Shares are listed on the Toronto Stock Exchange (“TSE”);

7. The Corporation is not in financial difficulty and is not in default under any of its obligations;

8. The Corporation is proposing to complete the Offering in each of the provinces of Canada and the Offering is to be made by way of a short form Prospectus;

9. A preliminary prospectus in respect of the Offering was filed with the securities regulators of each province, with the Commission des valeurs mobilières du Québec designated as the principal regulator under National Policy 43-201 (Mutual Reliance Review System for Prospectuses and Annual Information Forms), on December 21, 2000;

10. NB proposes to act as dealer manager together with CIBC World Markets Inc. (“WM”) (collectively, the “Underwriters”) for the purpose of the Offering. In respect to the fees concerning the offering (the “Fee”), NB will receive 60 % of the Fee and WM will receive 40 % of the Fee;

11. WM is a wholly owned subsidiary of a Canadian chartered bank;

12. NB is an indirect wholly-owned subsidiary of BMO Nesbitt Burns Corporation Limited, an indirect majority-owned subsidiary of a Canadian chartered bank which has provided the Corporation with borrowings under a bank financing facility for up to $25 million, with negotiations underway for an additional facility to be granted to the Corporation prior to the closing of the Offering (the “Bank Facility”);

13. NB or its affiliates, has performed and may continue to perform from time to time various investment and/or commercial banking services for the Corporation, and has acted and may continue to act as a financial advisor to the Corporation;

14. The net proceeds of the Offering will be used among other things to repay the borrowings under the Bank Facility;

15. The decision to undertake the Offering and the determination and the use of proceeds thereof were made without the involvement of the aforementioned bank;

16. Both NB and WM have participated in the negotiating and establishing of the terms of the Offering, including the price, and have participated in the due diligence process related to the Offering;

17. By virtue of the Bank Facility, the Corporation may be considered a connected issuer (as that term is defined in the Proposed Multi-Jurisdictional Instrument 33-105 entitled Underwriting Conflicts (the “Proposed Conflicts Instrument”) of NB, thus the Underwriters do not comply with the proportionate requirement of the Legislation;

18. In connection with the Offering, the Corporation is not a “related issuer” or its equivalent as such terms are defined in the Legislation, in respect of NB and WM and is not a “connected issuer” or its equivalent in respect of WM. WM is an independent underwriter as defined in the Proposed Conflicts Instrument;

19. The disclosure required by Schedule C of the Proposed Conflicts Instrument will be contained in the Preliminary Prospectus and in the Prospectus and the certificate in such prospectus will be signed by each of the Underwriters.

Decision

AND WHEREAS pursuant to the System, this Decision Document evidences the decision of each Decision Maker;

AND WHEREAS each of the Decision Makers is satisfied that the requirement contained in the Legislation that provides the Decision Makers with the jurisdiction to make the Decision has been met;

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

DATED at Montréal, this 23rd day of January, 2001

Guy Lemoine Viateur Gagnon
©2024 British Columbia Securities Commission