Mutual Reliance Review System for ExemptiveRelief Applications -- Relief granted to certain vice presidentsof a reporting issuer from the insider reporting requirementssubject to certain conditions -- vice presidents satisfy criteriacontained in Canadian Securities Administrators Staff Notice55-306 Applications for Relief from the Insider Reporting Requirementsby Certain Vice-Presidents.
Securities Act, R.S.O. 1990, c. S.5, as am.,ss. 1(1), 107, 108, 121(2)(a)(ii).
Regulation made under the Securities Act, R.R.O.1990, Reg. 1015, as am., Part VIII.
National Instrument 55-101 - Exemption fromCertain Insider Reporting Requirements.
IN THE MATTER OF
THE SECURITIES LEGISLATIONOF
BRITISH COLUMBIA, ALBERTA,SASKATCHEWAN,
MANITOBA, ONTARIO, QUEBEC,NOVA SCOTIA AND
NEWFOUNDLAND AND LABRADOR
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEWSYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS
IN THE MATTER OF
THE ROYAL BANK OF CANADA
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatoryauthority or regulator (the "Decision Maker") in eachof British Columbia, Alberta, Saskatchewan, Manitoba, Ontario,Québec, Nova Scotia and Newfoundland and Labrador (collectively,the "Jurisdictions") has received an application fromthe Royal Bank of Canada (the "Bank") for a decisionpursuant to the securities legislation of the Jurisdictions(the "Legislation") that the requirement containedin the Legislation to file insider reports shall not apply tocertain individuals who are insiders of the Bank or insidersof reporting issuers ("Investment Issuers") in whichthe Bank is an insider by reason of having a nominal vice-presidenttitle or another nominal title inferring a similar level ofauthority or responsibility given to employees who perform functionssimilar to those performed by employees with a nominal vice-presidenttitle (a "Nominal Title");
AND WHEREAS under the Mutual RelianceReview System for Exemptive Relief Applications (the "System"),the Commission des valeurs mobilières du Québecis the principal regulator for this application;
AND WHEREAS, unless otherwise defined,the terms herein have the meanings set out in National Instrument14-101 Definitions or in Quebec Commission Notice 14-101;
AND WHEREAS the Bank has representedto the Decision Makers that:
1. The Bank is a Schedule 1 Canadian charteredbank incorporated under the Bank Act (Canada) withits head office in Montreal, Quebec.
2. The Bank is a reporting issuer in eachof the Jurisdictions where such concept exists.
3. The Bank's common shares trade on The TorontoStock Exchange, the New York Stock Exchange and the Electronic(Swiss) Exchange and the Bank's preferred shares trade onThe Toronto Stock Exchange.
4. As at October 31, 2002, the Bank had approximately415 subsidiaries, four of which were as at October 31, 2002"major subsidiaries" of the Bank as defined underNational Instrument 55-101 ("NI 55-101").
5. The Bank is and may from time to time bean insider of certain Investment Issuers, as a result of whichthe Bank's insiders would be required to file insider reportsin respect of transaction on securities of such InvestmentIssuers. Accordingly the Bank is seeking exemptive relieffrom the insider reporting requirements both in respect tosecurities of the Bank and securities of Investment Issuers.
6. As at October 31, 2002, the Bank was aninsider in six Investment Issuers, namely, Chromos MolecularSystems Inc., Consolidated Envirowaste Industries Inc., MegawheelsTechnologies Inc., Peace Arch Entertainment Group, RBC CapitalTrust, Royal Trust Real Estate Limited Partnership, ResoluteEnergy Inc.
7. As at October 31, 2002, there were approximately3,600 persons who were insiders of the Bank pursuant to theLegislation, of whom:
(a) 137 are senior officers of the Bankor its subsidiaries who, by virtue of their positions, mayin the ordinary course receive or have access to materialundisclosed information concerning the Bank or InvestmentIssuers (current and future senior officers of the Bankor its subsidiaries who meet the foregoing description arecollectively referred to as "Non-Exempt Officers");
(b) approximately 2,000 are insiders ofthe Bank pursuant to the Legislation who are exempt fromthe insider reporting requirements of the Legislation withrespect to securities of the Bank pursuant to NI 55-101or exemption orders previously granted by certain of theDecision Makers;
(c) approximately 3,290 are insiders ofthe Bank pursuant to the Legislation who are exempt fromthe insider reporting requirements of the Legislation withrespect to securities of Investment Issuers pursuant toNI 55-101; and
(d) approximately 195 are employees of theBank and approximately 1,290 are employees of major subsidiariesof the Bank who have been given a Nominal Title.
8. The Bank has made this application to seekrelief from the insider reporting requirement for individualswho meet the following criteria (the "Nominal OfficerCriteria"):
(a) the individual has been given a NominalTitle; and
(b) the individual is not in charge of aprincipal business unit, division or function of the Bankor a "major subsidiary" of the Bank (as that termis defined in NI 55-101); and
(c) in the case of relief from the insiderreporting requirement in respect of securities of the Bank:
(A) the individual does not in the ordinarycourse, receive or have access to information regardingmaterial facts or material changes concerning the Bankbefore the material facts or material changes are generallydisclosed; and
(B) the individual is not an insider ofthe Bank in any capacity other than as result of holdinga Nominal Title; and
(d) in the case of relief from the insiderreporting requirement in respect of securities of an InvestmentIssuer:
(A) the individual does not in the ordinarycourse, receive or have access to information regardingmaterial facts or material changes concerning such InvestmentIssuer before the material facts or material changes aregenerally disclosed; and
(B) the individual is not an insider ofsuch Investment Issuer in any capacity other than as resultof holding a Nominal Title.
Current and future employees of the Bank orany subsidiary of the Bank that is now or in the future becomesa major subsidiary of the Bank and who meet the "NominalOfficer Criteria" are collectively referred to as "NominalOfficers".
9. The Bank and its subsidiaries (collectively,"RBC Financial Group") have well established andregularly reviewed policies and procedures: (a) to identifyundisclosed material information concerning the Bank, (b)that prohibit improper use of such information, (c) to educateemployees on the use of undisclosed material information,(d) that restrict certain senior officers to trading in Banksecurities only during designated "open windows",and (e) that require pre-clearance and monitoring of tradesin Bank securities by certain senior officers and other employees.Such policies and procedures will continue to apply regardlessof the relief granted under this Decision.
10. Certified excerpts of the relevant policiesand procedures have been provided to the Decision Makers.Designated staff in the legal and compliance departments ofRBC Financial Group are responsible for the administrationand application of such policies and procedures.
11. Under the supervision of the Senior Vice-President,Group Risk Management - Compliance of the Bank and SeniorVice-President, Strategic and Leadership Development of theBank, designated RBC Financial Group staff will:
(a) ensure that any employee of the Bankor a major subsidiary of the Bank who is appointed to aNon-Exempt Officer position in the future is advised oftheir responsibility to comply with insider reporting requirements;
(b) implement a system to identify insiders(i) who are not otherwise exempt from insider reportingrequirements as described in paragraph 7(b) above, and (ii)who meet the Nominal Officer Criteria; and
(c) review the process for determining Non-ExemptOfficers and Nominal Officers annually.
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 Makers with the jurisdiction to make theDecision has been met;
THE DECISION of the Decision Makers underthe Legislation is that the requirement contained in the Legislationto file insider reports:
(a) in respect of securities of the Bank shallnot apply to present and future Nominal Officers of the Bankor its major subsidiaries; and
(b) in respect of securities of InvestmentIssuers shall not apply to present and future Nominal Officersof the Bank,
so long as:
(c) each such individual satisfies the NominalOfficer Criteria;
(d) the Bank, upon the request of the DecisionMakers, makes available to the Decision Makers as soon aspracticable following such request a list of all individualswho are relying on the exemption granted by this Decisionas at the last day of the Bank's most recent interim financialreporting period; and
(e) the relief granted hereby will cease tobe effective on the date when NI 55-101 is amended.
June 6, 2003.