Exemption Orders (Discretionary)
RBC DOMINION SECURITIES INC.
2001 BCSECCOM 296
Headnote
Mutual Reliance Review System for Exemptive Relief Applications - Relief granted from certain underwriting conflict provisions of the Rules on the basis that if proposed Multi-Jurisdictional Instrument 33-105 Underwriting Conflicts was in effect, no such relief would be required. The proportionality requirements of the Rules are not met because no independent underwriter is underwriting an amount equal to that of the largest portion being underwritten by a non-independent underwriter. The issuer is a “connected issuer” but is neither a “related issuer” nor a “specified party” as defined in 33-105.
Applicable British Columbia Provisions
Securities Act, R.S.B.C. 1996, c. 418, s. 48
Securities Rules, B.C. Reg. 194/97, s. 78
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
RBC DOMINION SECURITIES INC.
SCOTIA CAPITAL INC.
TD SECURITIES INC.
AND IN THE MATTER OF
CANADIAN REAL ESTATE INVESTMENT TRUST
MRRS DECISION DOCUMENT
WHEREAS the securities regulatory authority or regulator (the "Decision Maker") in each of British Columbia, Alberta, Ontario, Quebec and Newfoundland (the "Jurisdictions") has received an application from RBC Dominion Securities Inc. (“RBC DS”), Scotia Capital Inc. (“Scotia Capital”) and TD Securities Inc. ("TD Securities"), (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 of an issuer made by means of 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 an independent underwriter, shall not apply to the Filers in respect of a proposed distribution (the “Offering”) of units (the “Units”) of Canadian Real Estate Investment Trust (the “Issuer”), pursuant to a short form prospectus (the “Prospectus”);
AND WHEREAS pursuant to the Mutual Reliance Review System for Exemptive Relief Applications (the "System"), the Ontario Securities Commission is the principal regulator of this application;
AND WHEREAS the Filers have represented to the Decision Makers that:
1. The Issuer is a reporting issuer or its equivalent in each of the Jurisdictions and, to the Filers’ knowledge, is not in default of any requirement of the Legislation.
2. The business of the Issuer is to invest in a diversified portfolio of income-producing real property investments used for retail, industrial, residential or office purposes in accordance with its investment policies and guidelines.
3. The Units of the Issuer are listed and posted for trading on The Toronto Stock Exchange and trade under the symbol “REF.UN”.
4. The head office of the lead underwriter for the Offering is in Toronto, Ontario.
5. The Issuer intends to file a preliminary short form prospectus (the “Preliminary Prospectus”) in the Jurisdictions.
6. The Filers along with three other underwriters are proposing to act as underwriters in connection with the Offering.
7. The Issuer has an agreement with Royal Bank of Canada, the Bank of Nova Scotia and the Toronto Dominion Bank of Canada (collectively, the “Banks”) and a life insurance company for a revolving credit facility of $72.0 million (the "Bank Facility"). The net proceeds of the Offering may be used, in part, to repay the Bank Facility.
8. The nature of the relationship among the Issuer and the Filers has been described in the Preliminary Prospectus and will be described in the Prospectus.
9. The Banks did not and will not participate in the decision to make the Offering or in the determination of its terms.
10. The Filers will not benefit in any manner from the Offering other than the payment of their underwriting fees in connection with the Offering.
11. By virtue of the fact that the Filers are each indirect wholly-owned subsidiaries of their respective Banks, the Issuer may, in connection with the Offering, be considered a connected issuer (or the equivalent) of each of the Filers.
12. The Issuer is not a related issuer (or the equivalent) of the Filers or of any of the other members of the underwriting syndicate.
13. The nature and details of the relationship between the Issuer and the Filers will be described in the Prospectus. The Prospectus will contain the information specified in Appendix “C” of draft Multi-Jurisdictional Instrument 33-105 Underwriting Conflicts (the “Proposed Instrument”).
14. This decision is confidential on the basis that, (i) the Offering has not been publicly announced, and (ii) the Filers do not want to be considered to be pre-marketing the Offering in any manner.
15. The Issuer is not a “specified party” as defined in the Proposed Instrument.
AND WHEREAS pursuant to the System this MRRS Decision Document evidences the decision of each Decision Maker (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, under the Legislation, is that the Independent Underwriter Requirement shall not apply to the Filers in connection with the Offering 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 20th day of February, 2001
Howard I. Wetston R. Stephen Paddon