Royal Bank of Canada & RBC Capital Trust - MRRS Decision

Headnote

Exemptions from certain continuous disclosure requirements granted to a trust on specified conditions where becauseof the terms of the trust a security holder's return depends upon the financial condition of the sponsoring bank and notthat of the trust. Trust offered trust units to the public in order to provide the bank with a cost effective means of raisingcapital for Canadian bank regulatory purposes; trust holds a portfolio of assets consisting primarily of mortgages andinterests in mortgages; unitholders are entitled to fixed semi-annual non- cumulative distributions but no distributionsare payable if the bank fails to pay dividends on its preferred shares and if distributions are not paid the bank isprevented from paying dividends on its preferred shares; trust units are not redeemable but are exchangeable at theoption of the holder after a fixed term for a series of preferred shares of the bank and trust units are non-voting;

Specifically, exemptions granted from the requirements to:

(a) file interim financial statements and audited annual financial statements and send such statementsto unitholders;

(b) make an annual filing in lieu of filing an information circular;

(c) file an annual report and an information circular with the Decision Maker in Quebec and deliver suchreport or information circular to unitholders; and

(d) prepare and file an annual information form ("AIF"), including management's discussion and analysis("MD&A") of the financial condition and results of operation of the trust and send such MD&A tounitholders

for so long as

(i) the bank remains a reporting issuer;

(ii) the bank sends its annual financial statements, interim financial statements, annual managementdiscussion and analysis and interim management discussion and analysis to unitholders and itsannual report to unitholders resident in the Province of Quebec at the same time and in the samemanner as if the unitholders were holders of common shares of the bank;

(iii) all outstanding securities of the trust are of the type presently issued;

(iv) the rights and obligations of holders of additional securities are the same in all material respects asthe rights and obligations of the holders of securities outstanding at the date of the relief is granted;and

(v) the bank and its affiliates are the beneficial owner of all voting securities of the trust

provided that the relief expires 30 days after the occurrence of a material change in the affairs of the trust.

Applicable Ontario Statutory Provisions

Securities Act, R.S.O. 1990, c.S.5, as am., ss 77, 78,79, 80(b)(iii),81,

Applicable Ontario Rules Cited

OSC Rule 51-501- AIF and MD&A

OSC Rule 52-501- Financial Statements

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

BRITISH COLUMBIA, ALBERTA, SASKATCHEWAN,

MANITOBA, ONTARIO, QUEBEC, NOVA SCOTIA

AND NEWFOUNDLAND

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEW SYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

ROYAL BANK OF CANADA AND

RBC CAPITAL TRUST

MRRS DECISION DOCUMENT

WHEREAS the local securities regulatory authority or regulator (the "Decision Maker", and collectively the"Decision Makers") in each of the Provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec,Nova Scotia and Newfoundland (the "Jurisdictions") has received an application (the "Application") from Royal Bankof Canada (the "Bank") and RBC Capital Trust (the "Trust") for a decision, pursuant to the securities legislation of theJurisdictions (the "Legislation") that the requirements contained in the Legislation to:

(a) file interim financial statements and audited annual financial statements (collectively, "FinancialStatements") with the Decision Makers and deliver such statements to the security holders of theTrust;

(b) make an annual filing ("Annual Filing") with the Decision Makers in lieu of filing an informationcircular, where applicable;

(c) file an annual report ("Annual Report") and an information circular with the Decision Maker in Quebecand deliver such report or information circular to the security holders of the Trust resident in Quebec;and

(d) prepare and file an annual information form ("AIF"), including management's discussion and analysis("MD&A") of the financial condition and results of operation of the Trust and send such MD&A tosecurity holders of the Trust;

shall not apply to the Trust, subject to certain terms and conditions;

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 the Bank and the Trust represented to the Decision Makers that:

Royal Bank of Canada

1. The Bank is a Schedule 1 Canadian chartered bank incorporated under the Bank Act (Canada) (the "BankAct"), is a reporting issuer or equivalent under the Legislation and is not in default of any requirement of theLegislation.

2. The authorized capital of the Bank consists of an unlimited number of common shares ("Bank CommonShares") and an unlimited number of first preferred shares and second preferred shares. As at October 18,2000, 602,387,616 Bank Common Shares and 65,500,000 First Preferred Shares were outstanding.

3. The Bank Common Shares are listed and posted for trading on The Toronto Stock Exchange (the "TSE"), theNew York Stock Exchange, the London Stock Exchange and the Switzerland Exchange.

RBC Capital Trust

4. The Trust is a closed-ended trust established under the laws of the Province of Ontario by The Royal TrustCompany ("Royal Trust"), as trustee, pursuant to an amended and restated declaration of trust made as ofJuly 24, 2000 (the "Declaration of Trust").

5. The beneficial interests of the Trust are divided into two classes of units, issuable in series, designated asTrust Capital Securities ("RBC TruCS") and Special Trust Securities ("Special Trust Securities" and, collectivelywith RBC TruCS, "Trust Securities").

6. The Trust was established solely for the purpose of effecting the Offerings (as defined below) and possiblefuture offerings of securities in order to provide the Bank with a cost effective means of raising capital forCanadian bank regulatory purposes. The Trust does not and will not carry on any operating activity other thanin connection with the Offerings and any future offerings.

7. The Trust is a reporting issuer, or the equivalent, in each of the Jurisdictions and is not in default of anyrequirement of the Legislation;

RBC TruCS

8. The Trust distributed 650,000 Trust Capital Securities - Series 2010 ("RBC TruCS - Series 2010") in theJurisdictions under a long form prospectus (the "July Prospectus") dated July 17, 2000 (the "First Offering").The July Prospectus also qualified certain other related securities for distribution in the Jurisdictions, includingthe July Holder Exchange Right and the Automatic Exchange Right (both as defined below).

9. The Trust issued and sold 750,000 Trust Capital Securities - Series 2011 ("RBC TruCS - Series 2011") in theJurisdictions under a long form prospectus (the "November Prospectus") dated November 29, 2000 (the"Second Offering"). The November Prospectus also qualified certain other related securities for distributionin the Jurisdictions, including the November Holder Exchange Right and the Automatic Exchange Right (bothas defined below). The First Offering and the Second Offering are collectively referred to as the "Offerings".

10. The RBC TruCS - Series 2010 and the RBC TruCS - Series 2011 are listed and posted for trading on the TSE.

11. The Trust also issued and sold an aggregate of 336,000 Special Trust Securities to the Bank in connectionwith the Offerings.

12. The business objective of the Trust is to acquire and hold assets ("Trust Assets") primarily from the Bank orits affiliates which may consist of: (a) undivided co-ownership interests in one or more pools of CanadaMortgage and Housing Corporation ("CMHC") insured first mortgages on residential property situated inCanada; (b) certain mortgage-backed securities; (c) CMHC - insured first mortgages on residential property;and (d) to the extent that the proceeds of the assets of the Trust are not invested in the assets referred toabove in (a), (b) or (c), money and certain debt obligations that are qualified investments under the IncomeTax Act (Canada) for trusts governed by certain deferred income plans.

13. Subject to paragraph 14, each RBC TruCS - Series 2010 and RBC TruCS - Series 2011 entitles the holder("RBC TruCS Holders") to receive a fixed cash distribution (a "Distribution") payable by the Trust on the lastday of June and December of each year (each such day, a "Distribution Date" and each period from andincluding the Distribution Date to but excluding the next Distribution Date (a "Distribution Period").

14. RBC TruCS Holders are not entitled to receive Distributions in respect of a particular Distribution Date if theBank has not declared regular cash dividends on its preferred shares or, if no such shares are thenoutstanding, on the Bank Common Shares (in accordance with the Bank's ordinary dividend practice in effectfrom time to time) in the most recent month in which the Bank ordinarily declares dividends from time to timein respect of such shares occurring prior to the commencement of the Distribution Period ended on suchDistribution Date.

15. The Bank has covenanted, pursuant to the July and November Bank Share Exchange Agreements (as definedbelow) that, if on the Distribution Date the Trust fails to pay in full Distributions on the RBC TruCS - Series2010 or RBC TruCS - Series 2011 to which the RBC TruCS Holders are entitled, the Bank will not declaredividends of any kind on its preferred shares until a specific period of time has elapsed from the DistributionDate.

16. Upon the occurrence of certain adverse tax events or events relating to the treatment of RBC TruCS for capitalpurposes prior to December 31, 2005, RBC TruCS Series - 2010 and RBC TruCS - Series 2011 will beredeemable, at the option of the Trust and with the approval of the Superintendent of Financial Institutions(Canada) (the "Superintendent"), in whole (but not in part) for a cash amount.

17. On December 31, 2005 and on any subsequent Distribution Date, the RBC TruCS - Series 2010 and RBCTruCS - Series 2011 will be redeemable in whole (but not in part) for a cash amount, at the option of the Trustand subject to the approval of the Superintendent.

18. On December 31, 2010, and on any subsequent Distribution Date, each RBC TruCS - Series 2010 will beexchangeable (the "July Holder Exchange Right"), at the option of the holder ("RBC TruCS - Series 2010Holders"), for forty non-cumulative redeemable first preferred shares, Series Q of the Bank ("Preferred SharesSeries Q"), in accordance with the terms set forth in a Bank Share Exchange Trust Agreement made as of July24, 2000, (the "July Bank Share Exchange Agreement") between the Bank, the Trust and Royal Trust, astrustee for the RBC TruCS - Series 2010 Holders.

19. On December 31, 2011, and on any subsequent Distribution Date, each RBC TruCS - Series 2011 will beexchangeable (the "November Holder Exchange Right"), at the option of the holder (the "RBC TruCS - Series2011 Holders"), for forty non-cumulative redeemable first preferred shares, Series R of the Bank ("PreferredShares Series R"), in accordance with the terms set forth in a Bank Share Exchange Trust Agreement madeas of December 6, 2000, (the " November Bank Share Exchange Agreement") between the Bank, the Trustand Royal Trust, as trustee for the RBC TruCS - Series 2011 Holders.

20. Each RBC TruCS will be automatically exchanged (the "Automatic Exchange Right") without the consent ofthe holder, for forty Preferred Shares Series Q in the case of each RBC TruCS - Series 2010 and fortyPreferred Shares Series R in the case of each RBC TruCS - Series 2011 if: (i) an application for a winding-uporder in respect of the Bank pursuant to the Winding-up and Restructuring Act (Canada) is filed by the AttorneyGeneral of Canada or a winding-up order in respect of the Bank pursuant to that Act is granted by a court; (ii)the Superintendent has taken control of the Bank or its assets pursuant to the Bank Act; (iii) the Superintendentadvises the Bank in writing that the Superintendent is of the opinion that the Bank has a risk-based Tier 1Capital ratio of less than 5.0% or a risk-based total Capital ratio of less than 8.0%; or (iv) the Superintendentdirects the Bank pursuant to the Bank Act to increase its capital or to provide additional liquidity and the Bankelects to cause the exchange as a consequence of the issuance of such direction or the Bank does not complywith such direction to the satisfaction of the Superintendent within the time specified in such direction.

21. The Preferred Shares Series Q and the Preferred Shares Series R will be convertible after specified dates, atthe option of the Bank and subject to regulatory approvals, into Bank Common Shares.

22. Beginning on December 31, 2010, and on each subsequent Distribution Date, the Preferred Shares Series Qwill be convertible, at the option of the holder, into Bank Common Shares, except under certain circumstances.

23. Beginning on December 31, 2011, and on each subsequent Distribution Date, the Preferred Shares Series Rwill be convertible, at the option of the holder, into Bank Common Shares, except under certain circumstances.

24. As set forth in the Declaration of Trust, RBC TruCS are non-voting except in certain limited circumstances andSpecial Trust Securities entitle the holders to vote.

25. Except to the extent that Distributions are payable to RBC TruCS Holders and, other than in the event oftermination of the Trust (as set forth in the Declaration of Trust), RBC TruCS Holders have no claim orentitlement to the income of the Trust or the Trust Assets.

26. In certain circumstances (as described in paragraph 20 above), including at a time when the Bank's financialcondition is deteriorating or proceedings for the winding-up of the Bank have been commenced, the RBCTruCS Series 2010 or RBC TruCS Series 2011 will be automatically exchanged for preferred shares of theBank without the consent of RBC TruCS Holders . As a result, RBC TruCS Holders will have no claim orentitlement to the Trust Assets, other than indirectly in their capacity as preferred shareholders of the Bank.

27. RBC TruCS Holders may not take any action to terminate the Trust.

28. The Trust has not requested relief for the purposes of filing a short form prospectus pursuant to NationalInstrument 44-101 -- Short Form Prospectus Distributions ("NI 44-101") (including, without limitation, any reliefwhich would allow the Trust to use the Bank's AIF as a current AIF of the Trust) and no such relief is providedby this Decision Document from any of the requirements of NI 44-101.

AND WHEREAS pursuant to the System this MRRS Decision Document evidences the decision of eachDecision Maker (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 requirement contained in theLegislation:

(a) to file Financial Statements with the Decision Makers and deliver such statements to holders of TrustSecurities;

(b) to make an Annual Filing, where applicable, with the Decision Makers in lieu of filing an informationcircular;

(c) to file an Annual Report and an information circular with the Decision Maker in Quebec and deliversuch report or information circular to holders of Trust Securities resident in Quebec;

(d) to prepare and file an AIF, including MD&A, with the Decision Makers and send such MD&A toholders of Trust Securities;

shall not apply to the Trust for so long as:

(i) the Bank remains a reporting issuer under the Legislation;

(ii) the Bank sends its annual financial statements, interim financial statements, annualmanagement discussion and analysis and interim management discussion and analysis toholders of Trust Securities and its Annual Report to holders of Trust Securities resident inthe Province of Quebec at the same time and in the same manner as if the holders of TrustSecurities were holders of Bank Common Shares;

(iii) all outstanding securities of the Trust are either RBC TruCS or Special Trust Securities;

(iv) the rights and obligations of holders of additional series of RBC TruCS are the same in allmaterial respects as the rights and obligations of the holders of RBC TruCS - Series 2010and RBC TruCS Series - 2011 at the date hereof; and

(v) the Bank is the beneficial owner of all Special Trust Securities;

and provided that if a material change occurs in the affairs of the Trust, this Decision shall expire 30days after the date of such change.

May 8, 2001.

"John Hughes"