Canadian First Financial Group Inc. - MRRS Decision

Headnote

MRRS for Exemptive Relief Applications - issuerowns 20 shares of TSX - issuer target of proposed take-overbid - condition of proposed take-over bid that issuer must distributeTSX shares to or for the benefit of the issuer's shareholders- TSX shares transferred to wholly-owned subsidiary of issuer- prospectus and registration relief granted in connection withthe transfer of TSX shares to wholly-owned subsidiary - prospectusand registration relief granted in connection with issuer'sdividend in kind of shares of wholly-owned subsidiary

Applicable Statutes

Securities Act R.S.O. 1990, c. S.5, as am.,ss. 25, 53, 74(1).

IN THE MATTER OF
THE SECURITIES LEGISLATION OF
ONTARIO AND QUEBEC

AND

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

AND

IN THE MATTER OF
CANADIAN FIRST FINANCIAL GROUP INC.

MRRS DECISION DOCUMENT

WHEREAS the local securities regulatoryauthority or regulator (the "Decision Maker") in eachof Ontario and Québec (collectively, the "Jurisdictions")has received an application from Canadian First Financial GroupInc. (the "Filer") for a decision under the securitieslegislation of the Jurisdictions (the "Legislation")that the Filer be exempt from the prospectus and registrationrequirements set forth under the Legislation;

AND WHEREAS under the Mutual RelianceReview System for Exemptive Relief Applications (the "System"),the Ontario Securities Commission is the principal regulatorfor this application;

AND WHEREAS the Filer has representedto the Decision Makers that:

1. Canadian First Financial Group Inc. was originallyincorporated pursuant to articles of incorporation under thelaws of the Province of Ontario on August 2, 1995.

2. Canadian First Financial Group Inc. and CanadianFirst Investments Inc. amalgamated to form the Filer on May13, 2002 pursuant to a "vertical short-form" amalgamationunder the Business Corporations Act (Ontario).

3. The Filer's head office is located in Cambridge,Ontario.

4. The Filer is a financial services managementcompany, with integrated business interests in the financialservices sector.

5. As at May 17, 2002, there were 8,474,413issued and outstanding common shares in the capital of the Filer.

6. The Filer is a reporting issuer in the Provincesof Ontario, British Columbia, Alberta, Saskatchewan, Nova Scotiaand Newfoundland and its common shares are listed and postedfor trading on The TSX Venture Exchange Inc. (the "TSXVX")under the symbol "YCG".

7. The Filer is the registered and beneficialowner of 20 shares of the Toronto Stock Exchange Inc. (the "TSXShares").

8. The Filer intends to transfer the TSX Sharesas a condition of a proposed all-cash take-over bid (the "Offer")for all of the issued and outstanding common shares of the Filer("CFFG Shares") by Dundee Wealth Management Inc. ("Dundee"),which Offer was publicly announced on May 15, 2002.

9. Pursuant to the terms and conditions of asupport agreement dated May 14, 2002, Dundee has agreed to makethe Offer for all of the issued and outstanding CFFG Sharesfor an aggregate purchase price of $11,345,000, which representsapproximately $1.33 per share (subject to adjustment based onthe actual number of CFFG Shares outstanding at the closingof the Offer).

10. Dundee has advised the Filer that it willnot proceed with the Offer unless the TSX Shares are distributedto or for the benefit of the shareholders of the Filer. Accordingly,the Offer has been structured so that the TSX Shares will bedistributed for the benefit of the Filer's current shareholderson a tax-efficient basis prior to the completion of the Offer.

11. The Board of Directors of the Filer unanimouslyapproved the Offer and will recommend to the Filer's shareholdersthat such shareholders accept the Offer.

12. Holders of in excess of 80% of the issuedand outstanding CFFG Shares have entered into lock-up agreementsto tender their shares of the Filer to the Offer.

13. To effect the distribution of TSX Sharesin a manner that is tax efficient and that is permitted by TheToronto Stock Exchange Inc. (the "TSX"), the Filerintends to sell its registered and beneficial interest in theTSX Shares to 1522231 Ontario Inc., a newly incorporated wholly-ownedsubsidiary of the Filer ("Newco") and, as considerationfor the acquisition of the TSX Shares, Newco intends to issueshares (the "Newco Shares") to the Filer.

14. Newco's Shares will be subject to restrictionson transfer, requiring the approval of either Newco's boardof directors or shareholders, which restriction shall be containedin Newco's constating documents.

15. The Board of Directors of the Filer intendsto declare a dividend in kind of the Newco Shares held by theFiler, payable to the shareholders of record of the Filer priorto Dundee mailing the Offer to the shareholders of the Fileron the basis of one Newco Share for every CFFG Share.

16. Until such time as the TSX's constatingdocuments are amended, any further transfer of the TSX Sharesby Newco will require TSX approval.

17. The proposed transfer of the TSX Sharesand the dividend in kind of Newco Shares has been approved bythe TSX and the TSX has agreed to amend its shareholders ledgerto reflect Newco as the registered holder of TSX Shares to beheld by Newco. In addition, all necessary approvals of the TSXVXhave been obtained.

AND WHEREAS under the System, this MRRSDecision Document evidences the decision of each Decision Maker(collectively, the "Decision");

AND WHEREAS each of the Decision Makersis satisfied that the test contained in the Legislation thatprovides the Decision Maker with the jurisdiction to make theDecision has been met;

THE DECISION of the Decision Maker inOntario under the Legislation in Ontario is that the Filer isexempt from the prospectus and registration requirements underthe Legislation in Ontario in connection with the proposed transferof the TSX Shares from the Filer to Newco provided that thefirst trade in the TSX Shares shall be a distribution;

THE FURTHER DECISION of the DecisionMakers under the Legislation is that the Filer is exempt fromthe prospectus and registration requirements under the Legislationin connection with the proposed dividend in kind of the NewcoShares to the shareholders of record of the Filer provided thatthe first trade in the Newco Shares shall be a distribution.

May 30, 2002.

"Paul Moore"      "Robert L. Shirriff"