Mutual Reliance Review System for ExemptiveRelief Applications -- Relief granted to an issuer from requirementto deliver initial interim financial statements -- Initial interimfinancial statements cover a short operating period.
Applicable Ontario Statutory Provisions
Securities Act, R.S.O. 1990, c. S.5, as am.subsection 77(2), clause 80(b)(iii).
IN THE MATTER OF
THE SECURITIES LEGISLATIONOF
BRITISH COLUMBIA, ALBERTA,SASKATCHEWAN
MANITOBA, ONTARIO, QUÉBEC,AND NOVA SCOTIA
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEWSYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS
IN THE MATTER OF
OIL SANDS SPLIT TRUST
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatoryauthority or regulator (the "Decision Maker") in eachof British Columbia, Alberta, Saskatchewan, Manitoba, Ontario,Québec and Nova Scotia (the "Jurisdictions")have received an application from Oil Sands Split Trust (the"Issuer") for a decision under the securities legislation(the "Legislation") of the Jurisdictions that theIssuer be exempt from the requirement to deliver to its securityholders interim financial statements for the period from June13, 2003 to June 30, 2003, as would otherwise be required pursuantto applicable Legislation;
AND WHEREAS pursuant to the Mutual RelianceReview System for Exemptive Relief Applications (the "System"),Ontario is the principal regulator for this application;
AND WHEREAS, unless otherwise defined,the terms herein have the meaning set out in National Instrument14-101 Definitions or in Quebec Commission Notice 14-101;
AND WHEREAS the Issuer has representedto the Decision Maker that:
1. The Issuer filed a final prospectus datedJune 13, 2003 (the "Prospectus") with the securitiesregulatory authority in each of the provinces of Canada pursuantto which a distribution of 2,500,000 preferred securities(the "Preferred Securities") and 2,500,000 capitalunits (the "Capital Units") of the Issuer was completedon July 3, 2003.
2. The Issuer was established under the lawsof the Province of Ontario pursuant to a trust agreement datedJune 13, 2003. The fiscal year end of the Issuer is December31, with the first fiscal year end to occur on December 31,2003. Pursuant to the requirements of the Legislation, andsubject to any relief obtained pursuant to this application,the Issuer would be required to prepare and file in the Jurisdictionsand deliver to its security holders interim financial statements(the "Initial Interim Financial Statements") forthe period from June 13, 2003 to June 30, 2003.
3. The final redemption of the Preferred Securitiesand the Capital Units of the Issuer is scheduled to occuron September 15, 2010.
4. The authorized capital of the Issuer consistsof an unlimited number of Capital Units, of which 2,500,000are issued and outstanding. An aggregate principal amountof $42,500,000 of Preferred Securities has been authorizedto be issued, of which 2,500,000 Preferred Securities havingan aggregate principal amount of $42,500,000 are issued andoutstanding. The attributes of the Preferred Securities andthe Capital Units are described under the headings "CertainProvisions of the Preferred Securities" and "CertainProvisions of the Capital Units" on pages 18 and 21,respectively, of the Prospectus.
5. RBC Dominion Securities Inc. acted as anagent for, and was the promoter of, the Issuer in respectof the offerings of the Preferred Securities and the CapitalUnits.
6. The principal undertaking of Issuer isthe holding of a portfolio of trust units (the "COS Units")of Canadian Oil Sands Trust in order to generate quarterlyfixed interest payments for the holders of Preferred Securitiesand to enable the holders of Capital Units to participatein any capital appreciation in the COS Units. The COS Unitsheld by the Issuer will only be disposed of as described inthe Prospectus.
7. The Prospectus included an audited statementof financial position of the Issuer as at June 13, 2003 andan unaudited pro forma statement of financial position asat June 13, 2003 prepared on the basis of the completion ofthe sale and issue of Capital Units and Preferred Securitiesof the Issuer. As such, the financial position of the Issueras at June 30, 2003 will have been substantially reflectedin the pro forma financial statements contained in the Prospectus.
8. The Issuer is an inactive company, thesole purpose of which is to provide a vehicle through whichdifferent investment objectives with respect to participationin the COS Units may be satisfied. Holders of Capital Unitswill be entitled on redemption to the benefits of any capitalappreciation in the market price of the COS Units after paymentof administrative and operating expenses of the Issuer andthe fixed distributions on the Preferred Securities, and holdersof Preferred Securities will be entitled to receive fixedcumulative preferential distributions on a quarterly basisequal to $0.36125 per Preferred Security.
9. The benefit to be derived by the securityholders of the Issuer from receiving the Initial Interim FinancialStatements would be minimal in view of (i) the short period(i.e., 17 days) from the date of the Prospectus to June 30,2003; (ii) the pro forma financial statements contained inthe Prospectus; and (iii) the nature of the minimal businesscarried on by the Issuer.
10. The expense to the Issuer of sending toits security holders the Initial Interim Financial Statementswould not be justified in view of the benefit to be derivedby the security holders from receiving such statements.
11. The annual unaudited financial statementsof the Issuer for the period ending December 31, 2003 willinclude the period from June 13, 2003 to June 30, 2003.
AND WHEREAS pursuant to the System, thisMRRS Decision Document evidences the decision of each DecisionMaker (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;
IT IS HEREBY DECIDED by the DecisionMakers pursuant to the Legislation that the Issuer is exemptedfrom the requirement to deliver to its security holders theInitial Interim Financial Statements, provided that
(i) the Initial Interim Financial Statementsare filed and posted for viewing on SEDAR;
(ii) the Issuer issue, and file on SEDAR,a press release informing security holders of their rightto receive the Initial Interim Financial Statements upon request;and
(iii) the Issuer send a copy of such InitialInterim Financial Statements to any security holder of theIssuer who so requests.
August 29, 2003.
"H. Lorne Morphy"
"Wendell S. Wigle"