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BMO Nesbitt Burns Inc. & Investors Group Inc. - MRRS Decision
IN THE MATTER OF
THE SECURITIES LEGISLATION
OF ALBERTA, BRITISH COLUMBIA, NEWFOUNDLAND,
ONTARIO AND QUÉBEC
AND
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF
APPLICATIONS
AND
IN THE MATTER OF
BMO NESBITT BURNS INC.
AND INVESTORS GROUP INC.
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatory authority or regulator (the "Decision Maker") in each of Alberta,British Columbia, Newfoundland, Ontario and Québec (the "Jurisdictions") has received an application from BMONesbitt Burns Inc. ("Nesbitt Burns" or the "Filer") for a decision under the securities legislation of the Jurisdictions (the"Legislation"), that the requirement (the "Independent Underwriter Requirement") contained in the Legislation whichrestricts a registrant from acting as an underwriter in connection with a distribution of securities of an issuer made bymeans of a prospectus, where the issuer is a connected issuer (or the equivalent) of the registrant unless a portion ofthe distribution at least equal to that portion underwritten by non-independent underwriters is underwritten by anindependent underwriter shall not apply to the Filer or to certain other Underwriters (as defined below) in connection withthe establishment of a short form base shelf prospectus (the "Prospectus") providing for the distributions, from time totime thereunder (the "Offerings") of unsecured debentures and preferred shares (the "Offered Securities") of InvestorsGroup Inc. ("Issuer");
AND WHEREAS under 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 Filer has represented to the Decision Makers that:
1. The Issuer is incorporated under the laws of Canada, and is a reporting issuer in each Jurisdiction and is notin default of any requirements of the Legislation.
2. The business of the Issuer is providing financial services and products to individuals and corporationsthroughout Canada. The Issuer and its operating subsidiaries provide a wide range of mutual funds, insurance,guaranteed investment certificates, mortgages, securities services for clients, loans for registered investmentsas well as a number of other services.
3. The common shares of the Issuer are listed and posted for trading on The Toronto Stock Exchange.
4. The head office of Nesbitt Burns, the lead underwriter for each of the Offerings, is in Ontario.
5. The Issuer has filed a preliminary base shelf prospectus dated April 20, 2001 in connection with the Offerings.The Issuer is proposing to offer the Offered Securities from time to time in Canada by way of the Prospectusand supplements thereto (the "Supplements") in accordance with applicable securities laws, and may alsooffer the Offered Securities in the United States from time to time under available exemptions from theprospectus requirements of that jurisdiction.
6. It is anticipated that the Offered Securities will be offered by an underwriting syndicate comprised of NesbittBurns and a syndicate of underwriters which has yet to be finalized (each an "Underwriter", and collectivelythe "Underwriters").
7. The Underwriters and the Issuer will enter into one or more underwriting agreements in connection with theOfferings, in each case to conduct the Offerings either on a firm commitment basis or on an agency or bestefforts basis.
8. Nesbitt Burns is a wholly-owned subsidiary of Bank of Montreal ("BMO"). The Issuer has accepted acommitment letter for a credit facility of up to $2.443 billion from BMO (the "Facility"). It is expected that theFacility will be funded by a syndicate of Canadian banks (each a "Bank", and collectively, the "BankSyndicate"). The Facility will be used by the Issuer to fund a portion of the cash consideration payable inconnection with its offer to acquire the common shares of Mackenzie Financial Corporation. It is intended thatthe proceeds of the Offerings will be used in part to repay a portion of the amount drawn under the Facility.
9. By virtue of the Facility, the Issuer may, in connection with the Offerings, be considered a connected issuer (orthe equivalent) of Nesbitt Burns. As well, certain of the Underwriters, if owned or otherwise affiliated with aBank which is a member of the Bank Syndicate (the "Bank-Owned Underwriters") may be in a relationshipwith that Bank which could result in the Issuer being considered a "connected issuer" in relation to such Bank-Owned Underwriter.
10. As part of the Offerings, the Underwriters will be underwriting and distributing the Offered Securities from timeto time under the Prospectus and the Supplements. While the exact percentage of the Offered Securities tobe underwritten by each Underwriter cannot be determined at this time, it expected that the percentages willbe such that the Independent Underwriting Requirement would act to bar Nesbitt Burns and any other Bank-Owned Underwriter from participating in the Offerings.
11. The nature of the relationship among the Issuer, Nesbitt Burns and any Bank-Owned Underwriter will bedescribed in each Supplement to the Prospectus in connection with the Offerings. The Supplements willcontain the information specified in Appendix "C" of the draft Multi-Jurisdictional Instrument 33-105(Underwriting Conflicts) (the "Proposed Instrument").
12. BMO and the Banks did not and will not participate in the decision to make the Offerings or in the determinationof their terms.
13. The Underwriters will receive no benefit pursuant to the Offerings, other than payment of their underwriting feesin connection the Offerings.
14. The Issuer is not and will not be at the time of any Offering a related issuer (or the equivalent) of Nesbitt Burnsor of any of the other Underwriters.
15. The Issuer is not and will not be a "specified party" at the time of each Offering as defined in the ProposedInstrument.
AND WHEREAS under the System, this MRRS Decision Document evidences the decision of each DecisionMaker (collectively, the "Decision");
AND WHEREAS each of the Decision Makers is satisfied that the test contained in the Legislation that providesthe 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 Requirementshall not apply to the Filer or any Bank-Owned Underwriter in connection with an Offering provided the Issuer is not andwill not be a related issuer, as defined in the Proposed Instrument, to the Filer or any Bank-Owned Underwriter at thetime of such Offering and the Issuer is not and will not be a specified party, as defined in the Proposed Instrument, atthe time of such Offering.
April 30, 2001.
"Paul M. Moore" "Robert W. Korthals"