Securities Law & Instruments


Subclause 121(2)(2)(a)(ii) - subdivided offering- relief from section 119 - the prohibition prohibiting tradingin portfolio shares by persons or companies having informationconcerning the trading programs of mutual funds shall not applyto the promoter/agent with respect to certain principal tradeswith the issuer in securities comprising the issuer's portfolio.

Applicable Ontario Statutes

Securities Act, R.S.O. 1990, c. S.5, as amended,ss. 1(1), 121(2)(a)(ii).



R.S.O. 1990, CHAPTER S.5,AS AMENDED (the "Act")








(Subclause 121(2)(a)(ii))

UPON the application of PIPE NT Corp.("PIPE") and BMO Nesbitt Burns Inc. ("Nesbitt")to the Ontario Securities Commission (the "Commission")pursuant to subclause 121(2)(a)(ii) of the Act for an orderexempting Nesbitt from the applicability of section 119 of theAct in connection with the acquisition by Nesbitt, as principal,of certain portfolio securities owned by PIPE in connectionwith the redemption by PIPE of all of its issued and outstandingcapital shares (the "Capital Shares") and preferredshares (the "Preferred Shares");

AND UPON considering the applicationand the recommendation of staff of the Commission;

AND UPON the applicants having representedto the Commission that:

1. PIPE was incorporated under the laws ofthe Province of Ontario on November 27, 1997.

2. PIPE is a passive "split share"investment company, the purpose of which is to enable investors,through the holding of Capital Shares or Preferred Shares,to satisfy separately the investment objectives of capitalappreciation or dividend income with respect to common shares(the "Portfolio Shares") of Enbridge Inc. and TransCanadaPipeLines Limited held by PIPE. PIPE initially held commonshares in the capital of IPL Energy Inc., TransCanada PipelinesLimited and Westcoast Energy Inc., as they were all then known.

3. PIPE is a reporting issuer within the meaningof the Act and, to the best of its knowledge, is not in defaultof any requirement of the Act or the regulation or rules madethereunder.

4. PIPE is a mutual fund as defined in subsection1(1) of the Act.

5. The Capital Shares and the Preferred Sharesare listed on The Toronto Stock Exchange Inc. (the "TSX").

6. The Portfolio Shares are listed and tradedon, among other stock exchanges, the TSX.

7. Nesbitt is the administrator of the ongoingaffairs of PIPE under an administration agreement, in respectof which it earns a fee for its services.

8. Nesbitt is registered under the Act asa dealer in the categories of "broker" and "investmentdealer" and, inter alia, is a member of the InvestmentDealers Association of Canada and the TSX. Nesbitt acted aspromoter and as one of the agents in connection with the offeringof the Capital Shares and the Preferred Shares to the publicpursuant to the prospectus of PIPE dated February 13, 1998(the "Prospectus").

9. Three of the five directors and all ofthe officers of PIPE are employees of Nesbitt.

10. Nesbitt is not an insider of any issuerof the Portfolio Shares within the meaning of subsection 1(1)of the Act.

11. By virtue of Nesbitt's relationship withPIPE, Nesbitt has access to information concerning the investmentprogram of PIPE.

12. In accordance with the articles of PIPE,and consistent with the disclosure in the Prospectus and thereforethe expectations of purchasers of the Capital Shares and thePreferred Shares at the time of the initial distribution,the Board of Directors of PIPE proposes to have PIPE redeemall of the Capital Shares and Preferred Shares then outstandingon March 3, 2003.

13. To fund the redemption, PIPE proposesto liquidate its portfolio of Portfolio Shares by:

(a) selling Portfolio Shares to holdersof Capital Shares in accordance with the option describedbelow in paragraph 14; and

(b) selling remaining Portfolio Shares byway of one or more competitive tenders, or otherwise privatelyor into the market.

14. As contemplated in the articles of PIPEand the Prospectus, at the request of certain holders of CapitalShares who tender their shares together with a certain cashpayment, PIPE will make payment of the amount due on redemptionof the Capital Shares by delivering Portfolio Shares (roundeddown to the nearest whole share) having a value equal to theredemption price in respect of such Capital Shares and theadditional cash payment (the "Shareholder Purchases").

15. PIPE proposes to dispose of remainingPortfolio Shares by way of one or more competitive tendersto be supervised by the two independent directors of PIPEand the legal counsel of PIPE and which will involve a requestfor tenders from Nesbitt and no fewer than two other majorinvestment dealers acting at arm's length to PIPE and Nesbitt(the "Tender Process"). PIPE is proposing to disposeof Portfolio Shares by way of Tender Process to ensure thatthe Portfolio Shares will be disposed of in an orderly fashionso that PIPE may realize the best reasonably available pricetherefor, and to preclude any artificial reduction in themarket price of the Portfolio Shares which may be caused byselling the significant number of Portfolio Shares requiredto be sold into the market.

16. Participants in each Tender Process willonly have one opportunity to bid for the Portfolio Sharesand the persons supervising the Tender Process will not, priorto completion of the Tender Process, disclose to any participantthe bid price for the Portfolio Shares submitted by the otherparticipants.

17. With price being the sole determiningfactor, the Portfolio Shares to be sold under each TenderProcess will be sold to the participant bidding the highestprice (the "Bid Price") for such Portfolio Shares.Accordingly, it is possible that the Portfolio Shares maybe sold to Nesbitt, as principal (the "Tender ProcessPurchases").

18. In addition to the Shareholder Purchasesand the Tender Process or where such methods are not chosenor available, PIPE also intends to fund redemptions by sellingPortfolio Shares to Nesbitt who may purchase such shares asprincipal (the "Regular Purchases", and togetherwith the Tender Process Purchases, the "Principal Purchases")either privately or through the market, provided that theprice obtained (net of all transaction costs, if any) by PIPEfrom Nesbitt is at least as high as the price that is available(net of all transaction costs, if any) through the facilitiesof the applicable stock exchange at the time of the trade.

19. When making a Principal Purchase, Nesbittwill comply with the rules, procedures and policies of thestock exchanges of which it is a member regarding principaltransactions.

20. Any Principal Purchases will be approvedby the two independent directors of PIPE.

21. Nesbitt will not receive any commissionsfrom PIPE in connection with Principal Purchases and in carryingout Principal Purchases, Nesbitt will deal fairly, honestlyand in good faith with PIPE.

AND UPON the Commission being satisfiedthat to do so would not be prejudicial to the public interest;

IT IS ORDERED, pursuant to subclause121(2)(a)(ii) of the Act, that Nesbitt is exempt from the applicabilityof section 119 of the Act in respect of the Principal Purchases,provided that such purchases are made in accordance with paragraphs14 through 21 herein.

January 21, 2003.

"Howard I Wetston"                    "H.Lorne Morphy"