Securities Law & Instruments


Issuer exempt from requirement to pay participationfees, subject to conditions.

Ontario Rules Cited

Ontario Securities Commission Rule 13-502 Fees.



RULE 13-502 FEES







WHEREAS the Ontario Securities Commission(the OSC) has received an application from The Toronto-DominionBank (TD Bank) and TD Capital Trust (the Trust)for an order, pursuant to section 6.1 of OSC Rule 13-502 Fees(the Fees Rule), that the requirement to pay a participationfee under section 2.2 of the Fees Rule shall not apply to theTrust, subject to certain terms and conditions.

AND WHEREAS TD Bank and the Trust haverepresented to the OSC that:

1. The Trust is a closed-ended trust establishedunder the laws of the Province of Ontario by The Canada TrustCompany (formerly, TD Trust Company) as trustee (the Trustee),pursuant to a declaration of trust made as of February 14,2000, as amended and restated. It has a financial year endof December 31. The Trustee is an indirect, wholly-owned subsidiaryof TD Bank. The Trust is a reporting issuer in Ontario andis not, to its knowledge, in default of any requirement underthe securities legislation of Ontario. TD Bank acts as administrativeagent for the Trust pursuant to an Administration and AdvisoryAgreement dated March 21, 2000.

2. The outstanding securities of the Trustconsist of (i) Special Trust Securities (the Special TrustSecurities), which are voting securities of the Trust,and (ii) Capital Trust Securities - Series 2009 (the TDCaTS). The Special Trust Securities and the TD CaTS arecollectively referred to herein as the Trust Securities.All outstanding Special Trust Securities are held by TD Bank.The Trust distributed 900,000 TD CaTS in a public offeringpursuant to a prospectus dated March 14, 2000 (the Offering).The TD CaTS are listed on the Toronto Stock Exchange. Theymay be redeemed at par beginning on December 31, 2009.

3. The Trust is a special purpose issuer,established solely for the purpose of effecting the Offeringin order to provide TD Bank with a cost effective means ofraising capital for Canadian financial institution regulatorypurposes. The Trust acquires and holds sufficient assets togenerate income for distribution to holders of the Trust Securities.The Trust does not and will not carry on any operating activityother than in connection with the Offering.

4. Pursuant to a Mutual Reliance Review Systemfor Exemptive Relief Decision Document dated May 16, 2001(the Decision Document) granted to the Trust by theOSC and the other Decision Makers set out therein, such DecisionMakers determined that the requirement contained in the securitieslegislation of the Province of Ontario and the securitieslegislation of the other applicable jurisdictions:

(a) to file interim financial statementsand audited annual financial statements with the DecisionMakers and deliver such statements to the holders of TrustSecurities;

(b) to make an annual filing, where applicable,with the Decision Makers in lieu of filing an informationcircular;

(c) to file an annual report and an informationcircular with the Decision Maker in Québec and deliversuch report or information circular to holders of TrustSecurities resident in Québec; and

(d) to prepare and file an annual informationform, including management's discussion and analysis (MD&A),with the Decision Makers and send such MD&A to holdersof Trust Securities;

shall not apply to the Trust for so long asthe following conditions are satisfied:

(i) TD Bank remains a reporting issuer underthe securities legislation of the Province of Ontario andthe securities legislation of the other applicable jurisdictions;

(ii) TD Bank sends its annual financialstatements, interim financial statements, annual managementdiscussion and analysis and interim management discussionand analysis to holders of Trust Securities and its annualreport to holders of Trust Securities resident in the Provinceof Québec at the same time and in the same manneras if the holders of Trust Securities were holders of TDBank common shares;

(iii) all outstanding securities of theTrust are either Capital Trust Securities or Special TrustSecurities;

(iv) the rights and obligations of holdersof additional series of Capital Trust Securities are thesame in all material respects as the rights and obligationsof the holders of the TD CaTS at the date of such DecisionDocument;

(v) TD Bank is the beneficial owner of allSpecial Trust Securities; and

(vi) provided that, if a material changeoccurs in the affairs of the Trust, such Decision shallexpire 30 days after the date of such change.

5. The Trust was established by TD Bank tocomply with regulatory requirements of the Office of the Superintendentof Financial Institutions (OSFI) respecting the issuanceof innovative Tier 1 capital. Innovative instruments, suchas the TD CaTS, must satisfy the detailed requirements ofOSFI Interim Appendix to Guideline A-2 Principles GoverningInclusion of Innovative Instruments in Tier 1 Capital (theOSFI Guideline), to be included in Tier 1 capital.The OSFI Guideline requires that innovative instruments beissued by a separate special purpose issuer.

6. Issuing innovative instruments, such asthe TD CaTS, is a cost effective means of raising Tier 1 capitalfor TD Bank. However, the TD CaTS could not have been issueddirectly under the OSFI Guideline. If TD Bank could have issuedthe TD CaTS directly, this capital would have been includedin the calculation of the participation fee payable by TDBank. Since TD Bank's capitalization currently exceeds thehighest level for purposes of the participation fee calculation,a direct issuance by TD Bank of the TD CaTS would not haveincreased the participation fee payable by TD Bank.

7. No continuous disclosure documents concerningonly the Trust will be filed with the OSC.

8. The Trust would not be required (but forthe Fees Rule) to pay any fees related to continuous disclosure.

9. TD Bank will not issue additional securitiesout of the Trust to the public.

10. The Trust is a 'Class 2 reporting issuer'under the Fees Rule. Its capitalization as at December 31,2002 was approximately $1.26 billion. Accordingly, under theFees Rule the Trust would be required to pay a participationfee of $37,500 for 2003 (9/12ths of $50,000) and a participationfee of $50,000 for each subsequent financial year. Assumingthe TD CaTS were redeemed on December 31, 2009, the Trustwould be required to pay aggregate participation fees of $337,500over its remaining operational lifetime.

THE ORDER of the OSC under the Fees Ruleis that the requirement to pay a participation fee under section2.2 of the Fees Rule shall not apply to the Trust, for so longas:

(i) TD Bank and the Trust continue to satisfyall of the conditions contained in the Decision Document;

(ii) TD Bank does not issue further securitiesout of the Trust, other than Special Trust Securities issuedto TD Bank or to direct or indirect wholly-owned subsidiariesof TD Bank; and

(iii) the capitalization of the Trust representedby the TD CaTS is included in the participation fee calculationapplicable to TD Bank.

June 27, 2003.

"John Hughes"