NP 11-203 -- section 2.8 of NI 44-101 -- notice of intention to be qualified to file a short form prospectus -- issuer will be a successor issuer under NI 44-101 through conversion from an income fund to a share corporation -- relief granted as disclosure regarding the predecessor issuer will effectively be the disclosure of the successor issuer -- predecessor issuer is qualified to file a short form prospectus.
Applicable Legislative Provisions
National Instrument 44-101 Short Form Prospectus Distributions, ss. 2.8(1), 8.1.
May 13, 2009
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
IN THE MATTER OF
THE PROCESS FOR EXEMPTIVE RELIEF
APPLICATIONS IN MULTIPLE JURISDICTIONS
IN THE MATTER OF
GMP CAPITAL INC.
The principal regulator in the Jurisdiction has received an application from the Filer for a decision:
(a) under the securities legislation of the Jurisdiction of the principal regulator (the "Legislation") for relief pursuant to section 8.1 of National Instrument 44-101 Short Form Prospectus Distributions ("NI 44-101") from the requirement to file a notice declaring its intention to be qualified to file a short form prospectus at least 10 business days prior to the filing of its first preliminary short form prospectus after the notice (the "Exemption Sought"); and
(b) under the Legislation that the application and this decision (the "Confidential Material") be kept confidential and not be made public until the earliest of: (i) the date that the Filer files a Preliminary Prospectus (as defined below); (ii) the date the Filer advises the principal regulator that there is no need for the Confidential Material to remain confidential; (iii) the date that is 10 business days following the filing of the Notice of Intention (as defined below); and (iv) the date that is 30 days after the date of this decision.
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
(a) the Ontario Securities Commission is the principal regulator for this application, and
(b) the Filer has provided notice that section 4.7(1) of M-ultilateral Instrument 11-102 -- Passport System ("MI 11-102") is intended to be relied upon in all provinces and territories of Canada (the "Passport Jurisdictions").
Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.
This decision is based on the following facts represented by the Filer.
1. The Filer was incorporated under the laws of Ontario on March 16, 2009 for the purpose of becoming the successor issuer to GMP Capital Trust (the "Fund") upon its conversion to a corporate structure, as described in more detail below.
2. The principal office of the Filer is located at 145 King Street West, Suite 300, Toronto, Ontario.
3. The authorized share capital of the Filer consists of an unlimited number of common shares (the "Common Shares") and an unlimited number of preferred shares issuable in series. As of May 8, 2009, the Filer had 1 Common Share outstanding which is owned by the Fund.
4. The Fund is an unincorporated, open-ended trust governed by the laws of the Province of Ontario. The Fund was established pursuant to a declaration of trust dated September 20, 2005, as amended and restated on November 30, 2005 in connection with the conversion of the former GMP Capital Corp. to an income trust structure under a plan of arrangement effective December 1, 2005 (the "2005 Arrangement").
5. Griffiths McBurney L.P. ("GMP Holding Partnership") is a limited partnership formed under the laws of Manitoba. The general partner of GMP Holding Partnership is an Ontario corporation called GMP Corp., which is wholly owned by the Fund. The operating subsidiaries of the GMP group are owned by GMP Holding Partnership, other than GMP Private Client, L.P. ("Private Client"), which is partially owned by employees of Private Client, GMP Securities Europe LLP ("GMP Europe"), which is partially owned by partners of GMP Europe and GMP Investment Management L.P. ("GMP Investment"), which is partially owned by employees of GMP Investment (through ownership interests in Proprietary Partner L.P.).
6. The Fund is a reporting issuer under applicable securities laws in each of the provinces of Canada.
7. The Fund is qualified to file a prospectus in the form of a short form prospectus pursuant to section 2.2 of NI 44-101 and filed a notice of intention to be qualified to file a short form prospectus with the Ontario Securities Commission dated June 7, 2006.
8. The Fund and GMP Holding Partnership are proposing to undertake a conversion (the "Conversion") of the Fund into a corporate structure by way of a statutory plan of arrangement. Under the Conversion, the holders of units of the Fund ("Fund Unitholders") and holders of Class B limited partner units of GMP Holding Partnership ("Exchangeable LP Unitholders") will exchange their respective units for Common Shares of the Filer.
9. The Conversion from a unit trust structure to a share corporation received Fund Unitholder and Exchangeable LP Unitholder approval at the Fund's annual and special meeting held on May 8, 2009. It is expected that the Conversion will become effective on or about May 15, 2009.
10. Upon completion of the Conversion, the Filer will become (or, where necessary, seek to become) the successor reporting issuer in each of the provinces in Canada. The Toronto Stock Exchange has conditionally approved the substitutional listing of the Filer's Common Shares, subject to the Filer fulfilling the requirements of the Toronto Stock Exchange.
11. The Filer anticipates that it may wish to file a preliminary prospectus either in the form of a short form prospectus or a short form base shelf prospectus (each, a "Preliminary Prospectus") shortly after May 15, 2009, relating to the offering or potential offering of securities (including Common Shares, debt securities or subscription receipts) of the Filer.
12. Following the receipt of regulatory approvals in respect of such a filing, the Filer seeks to have the option to file a final prospectus (in the form of a short form prospectus or a short form base shelf prospectus, as applicable).
13. In anticipation of a potential filing of a Preliminary Prospectus, and assuming the Conversion has been completed, the Filer intends to file its notice of intention to be qualified to file a short form prospectus (the "Notice of Intention") on or about May 19, 2009. In the absence of the Exemption Sought, the Filer will not be qualified to file a Preliminary Prospectus until 10 business days from the date upon which the Notice of Intention is filed.
14. Pursuant to the qualification criteria set forth in section 2.2 of NI 44-101, following the Conversion, the Filer will be qualified to file a short form prospectus on the basis that it will satisfy the requirements of section 2.2 of NI 44-101 and, as successor issuer, can make use of the exemption provided under section 2.7(2) of NI 44-101 to qualify to file a prospectus in the form of a short form prospectus. As such, the Filer would also be eligible to file a short form prospectus in the form of a base shelf prospectus under section 2.2 of National Instrument 44-102 Shelf Distributions.
15. Notwithstanding section 2.2 of NI 44-101, section 2.8(1) of NI 44-101 provides that an issuer is not qualified to file a short form prospectus unless it has filed a notice declaring its intention to be qualified to file a short form prospectus at least 10 business days prior to the issuer filing its first preliminary short form prospectus.
16. The Filer will not satisfy the requirement in section 2.8(1) of NI 44-101 until 10 business days after it files a Notice of Intention in mid-May 2009, and will not be qualified to file a Preliminary Prospectus during that time, unless the Exemption Sought is granted.
17. The Preliminary Prospectus will incorporate by reference the documents that would be required to be incorporated by reference under item 11 of Form 44-101F1 in a Preliminary Prospectus.
The Decision Maker is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.
The decision of the Decision Maker pursuant to the Legislation is that:
(a) the Exemption Sought is granted, provided that, at the time the Filer files its Notice of Intention, the Filer meets the requirements of (i) section 2.2(a), (b), (c) and (e) of NI 44-101, and (ii) the exemption for successor issuers set forth in section 2.7(2) of NI 44-101; and
(b) the Confidential Material will be kept confidential and not be made public until the earliest of: (i) the date that the Filer files a Preliminary Prospectus; (ii) the date the Filer advises the principal regulator that there is no need for the Confidential Material to remain confidential; (iii) the date that is 10 business days following the filing of the Notice of Intention; and (iv) the date that is 30 days after the date of this decision.
DATED this 13th day of May, 2009.