Securities Law & Instruments


Subclause 121(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 Can-Banc NT Corp.("Can-Banc") 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 Can-Banc in connectionwith the redemption by Can-Banc of all of its issued and outstandingclass A capital shares (the "Capital Shares") andpreferred shares (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. Can-Banc was incorporated under the lawsof the Province of Ontario on July 10, 1992.

2. Can-Banc 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 Bank of Montreal, CanadianImperial Bank of Commerce, The Bank of Nova Scotia, RoyalBank of Canada and The Toronto-Dominion Bank held by Can-Banc.

3. Can-Banc is a reporting issuer within themeaning of the Act and, to the best of its knowledge, is notin default of any requirement of the Act or the regulationor rules made thereunder.

4. Can-Banc is a mutual fund as defined insubsection 1(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 Can-Banc under an administration agreement, inrespect of 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 initialpublic offering of capital shares in 1992 which have sinceeither been redeemed or converted into Capital Shares andthe offering of Preferred Shares to the public pursuant tothe prospectus of Can-Banc dated August 20, 1998 (the "Prospectus").

9. Three of the five directors and all ofthe officers of Can-Banc 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 withCan-Banc, Nesbitt has access to information concerning theinvestment program of Can-Banc.

12. In accordance with the articles of Can-Banc,and consistent with the disclosure in the Prospectus and thereforethe expectation of the holders of the Capital Shares and thePreferred Shares, the Board of Directors of Can-Banc proposesto have Can-Banc redeem all of the Capital Shares and PreferredShares outstanding on August 31, 2003 (or the first businessday thereafter).

13. To fund the redemption, Can-Banc 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 Can-Bancand the Prospectus, at the request of certain holders of CapitalShares who tender their shares together with a certain cashpayment, Can-Banc 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 plus theadditional cash payment (the "Shareholder Purchases").

15. Can-Banc proposes to dispose of remainingPortfolio Shares by way of one or more competitive tendersto be supervised by the two independent directors of Can-Bancand the legal counsel of Can-Banc and which will involve arequest for tenders from Nesbitt and no fewer than two othermajor investment dealers acting at arm's length to Can-Bancand Nesbitt (the "Tender Process"). Can-Banc isproposing to dispose of Portfolio Shares by way of TenderProcess to ensure that the Portfolio Shares will be disposedof in an orderly fashion so that Can-Banc may realize thebest reasonably available price therefor, and to precludeany artificial reduction in the market price of the PortfolioShares which may be caused by selling the significant numberof Portfolio Shares required to 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, Can-Banc also intends to fund redemptions byselling Portfolio Shares to Nesbitt who may purchase suchshares as principal (the "Regular Purchases", andtogether with the Tender Process Purchases, the "PrincipalPurchases") either privately or through the market, providedthat the price obtained (net of all transaction costs, ifany) by Can-Banc from Nesbitt is at least as high as the pricethat is available (net of all transaction costs, if any) throughthe facilities of the applicable stock exchange at the timeof 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 Can-Banc.

21. Nesbitt will not receive any commissionsfrom Can-Banc in connection with Principal Purchases and incarrying out Principal Purchases, Nesbitt will deal fairly,honestly and in good faith with Can-Banc.

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.

June 20, 2003.

"Robert L. Shirriff"
"Robert W. Korthals"