Securities Law & Instruments

Headnote

Mutual Reliance Review System for ExemptiveRelief Applications - OSC Rule 54-501 - Exemption granted fromrequirement to include prospectus level disclosure in an informationcircular where redeemable preferred shares to be issued undera merger- preferred shares issued for tax purposes only andwill be redeemed on 2nd business day following amalgamation-merger, in substance, a cash transaction and prospectus leveldisclosure of limited value in the circumstances.

Applicable Ontario Rules

Ontario Securities Commission Rule 54-501 ProspectusDisclosure - sections 1.2, 2.1, 2.2, 2.3, and 3.1.

IN THE MATTER OF

THE SECURITIES LEGISLATIONOF

BRITISH COLUMBIA AND ONTARIO

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEWSYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

DUNDEE WEALTH MANAGEMENT INC.AND IPC FINANCIAL NETWORK INC.

 

MRRS DECISION DOCUMENT

WHEREAS the local securities regulatoryauthority or regulator (the "Decision Makers") inBritish Columbia and Ontario (collectively, the "Jurisdictions")has received an application from Dundee Wealth Management Inc.("Dundee Wealth") and IPC Financial Network Inc. ("IPCFN"and together with Dundee Wealth, the "Filers") fora decision under the securities legislation of the Jurisdictions(the "Legislation") that the prospectus level disclosurerequirements contained in Sections 2.1, 2.2 and 2.3 of OntarioSecurities Commission Rule 54-501, Prospectus Disclosurein Certain Information Circulars, and Section 11 of BritishColumbia Form 54-901F (collectively, the "Prospectus LevelDisclosure Requirements") shall not apply to a managementproxy circular (the "Circular") to be sent to allshareholders of IPCFN in connection with the proposed amalgamation(the "Amalgamation") of IPCFN and 6042074 Canada Inc.("Subco"), a wholly-owned subsidiary of Dundee Wealth,pursuant to section 181 of Canada Business Corporations Act(the "CBCA") (the amalgamated company to be formedby the amalgamation of IPCFN and Subco being referred to as"Amalco"), solely as the Prospectus Level DisclosureRequirements apply to Subco and Amalco;

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 Filers have representedto the Decision Makers that:

1. Dundee Wealth is a corporation incorporatedunder the Business Corporations Act (Ontario). Thecommon shares in the capital of Dundee Wealth are listed andposted for trading on the Toronto Stock Exchange. Dundee Wealthis a reporting issuer in each province of Canada.

2. IPCFN is a corporation incorporated underthe CBCA. The common shares in the capital of IPCFN (the "IPCFNShares") are listed and posted for trading on the TSXVenture Exchange. IPCFN is a reporting issuer in British Columbia,Alberta, Saskatchewan, Ontario, Quebec and Nova Scotia.

3. Subco is a corporation incorporated underthe CBCA and is a direct wholly-owned subsidiary of DundeeWealth. Subco is not a reporting issuer in any province ofCanada. Subco will be used for the sole purpose of effectingthe Amalgamation.

4. Pursuant to a merger agreement dated asof December 26, 2002 between Dundee Wealth, Subco and IPCFN,Dundee Wealth intends to acquire all of the issued and outstandingIPCFN Shares, including IPCFN Shares issuable upon the exerciseor surrender of outstanding stock options and the conversionof outstanding IPCFN preference shares, pursuant to the Amalgamation.

5. The Amalgamation will result in each holderof IPCFN Shares (a "IPCFN Shareholder") receiving,in addition to common shares, Series A First Preference Sharesand/or Series B First Preference Shares of Dundee Wealth,one redeemable preferred share in the capital of Amalco (the"Preferred Shares") for each IPCFN Share. Pursuantto the Amalgamation, Dundee Wealth will receive common sharesin the capital of Amalco in exchange for its shares of Subco.On the second business day following completion of the Amalgamation,each Preferred Share will be redeemed for Cdn. $0.25 in cash(assuming 66 million IPCFN Shares outstanding) (the "Redemption").Upon completion of the Redemption, Dundee Wealth will ownall of the shares of Amalco.

6. The Circular will include the prospectusdisclosure required under the Prospectus Level DisclosureRequirements in respect of Dundee Wealth.

7. The Preferred Shares will be used so thatrollovers provided for under section 87 of the Income TaxAct (Canada) will be available to IPCFN. No new certificatesevidencing the Preferred Shares will be issued to the IPCFNShareholders who will continue to hold their IPCFN share certificatesuntil the Redemption.

8. The aggregate proceeds of redemption payablepursuant to the Redemption is approximately Cdn. $16.5 million,representing less than 5% of the market capitalization ofDundee Wealth.

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 Makers underthe Legislation is that the Prospectus Level Disclosure Requirementsshall not apply to the Circular in respect of Subco and Amalco.

January 22, 2003.

"Margo Paul"