Securities Law & Instruments

Headnote

Mutual Reliance Review System for ExemptiveRelief Applications -- Subsidiary of U.S. corporation whereU.S. parent is credit supporter exempt from GAAP reconciliationrequirements and eligiblity requirements of NI 44-101 and AIFrequirement for proposed and future offerings - Financing subsidiaryfurther exempt from interim and annual financial statement requirements(including MD&A requirements), material change requirements,proxy requirements and insider reporting requirements - Reliefsubject to conditions, including filing, under issuer's SEDARprofile, of documents filed by the credit support of the issuerwith the Securities and Exchange Commission.

Applicable Ontario Statutory Provisions

Securities Act, R.S.O. 1990, c. S.5, as am.,ss. 75, 80(b)(iii), 77, 78, 107, 108, 109 and 121(2)(a)(ii).

Ontario Regulations

Regulation made under the Securities Act, R.R.O.1990, Reg. 1015, as am.

Ontario Rules

National Instrument 44-101 Short Form ProspectusDistributions.

National Instrument 44-102 Shelf Distributions.

National Instrument 71-101 MultijurisdictionalDisclosure System.

Rule 51-501 AIF and MD&A.

IN THE MATTER OF

THE SECURITIES LEGISLATIONOF

ALBERTA, BRITISH COLUMBIA,MANITOBA,

NEW BRUNSWICK, NEWFOUNDLANDAND LABRADOR,

NOVA SCOTIA, ONTARIO, PRINCEEDWARD ISLAND,

QUEBEC AND SASKATCHEWAN

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEWSYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

GENERAL ELECTRIC CAPITAL CORPORATIONAND

GE CAPITAL CANADA FUNDINGCOMPANY

 

MRRS DECISION DOCUMENT

WHEREAS the local securities regulatoryauthority or regulator (the Decision Maker) in each of Alberta,British Columbia, Manitoba, New Brunswick, Newfoundland andLabrador, Nova Scotia, Ontario, Prince Edward Island, Quebecand Saskatchewan (collectively, the Jurisdictions) has receivedan application (the Application) from General Electric CapitalCorporation (GE Capital) and its indirect wholly-owned subsidiary,GE Capital Canada Funding Company (the Issuer, and togetherwith GE Capital, the Filer), for a decision pursuant to thesecurities legislation of the Jurisdictions (the Legislation)that:

A. the Filer be exempted from the followingrequirements contained in the Legislation:

(i) the requirements in section 2.5(1) ofNational Instrument 44-101 (NI 44-101) that a person orcompany guaranteeing non-convertible debt issued by an issuerbe a reporting issuer with a 12-month reporting historyin a Canadian province or territory and have a current annualinformation form (an AIF) (the Eligibility Requirement)in order to permit the Issuer to issue non-convertible debtsecurities, in particular medium term notes (the Notes),with an approved rating (as defined in NI 44-101) whichwill be fully and unconditionally guaranteed by GE Capital(any issue of the Notes being referred to as an Offering);

(ii) the requirement in NI 44-101 that ashort form prospectus filed by the Issuer in connectionwith an Offering include a reconciliation (the ReconciliationRequirement) to Canadian generally accepted accounting principles(GAAP) of the consolidated financial statements of GE Capitalincluded in or incorporated by reference into the prospectuswhich have been prepared in accordance with foreign GAAPand that, where such financial statements are audited inaccordance with foreign generally accepted auditing standards(GAAS), the Issuer provide a statement by the auditor disclosingany material differences in the auditor's report and confirmingthat the auditing standards of the foreign jurisdictionare substantially similar to Canadian GAAS;

(iii) the requirement in NI 44-101 and underthe Legislation of Ontario, Quebec and Saskatchewan thatthe Issuer have a current AIF and file renewal AIFs (theAIF Requirement) with the Decision Makers;

(iv) the requirement that the Issuer filewith the Decision Makers and send, where applicable, toits securityholders audited annual financial statementsor annual reports, including without limitation, management'sdiscussion and analysis thereon (the Annual Financial StatementRequirement);

(v) the requirement that the Issuer filewith the Decision Makers and send, where applicable, toits securityholders unaudited interim financial statements,including without limitation, management's discussion andanalysis thereon (the Interim Financial Statement Requirement);

(vi) the requirement that the Issuer issueand file with the Decision Makers press releases and filematerial change reports (the Material Change Requirement);

(vii) the requirement that the insidersof the Issuer file with the Decision Makers insider reports(the Insider Reporting Requirement); and

(viii) the requirement that the Issuer complywith the proxy and proxy solicitation requirements, includingfiling an information circular or report in lieu thereof(the Proxy Requirement and together with the Annual FinancialStatement Requirement, the Interim Financial Statement Requirement,the Material Change Requirement and the Insider ReportingRequirement, the Continuous Disclosure and Reporting Requirements);and); and

B. the Application and the Decision, as definedbelow, be held in confidence by the Decision Makers subjectto certain conditions.

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, 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 Filer has representedto the Decision Makers that:

1. GE Capital was incorporated in 1943 inthe State of New York under the provisions of the New YorkBanking Law relating to investment companies, as successorto General Electric Contracts Corporation, which was formedin 1932. Until 1987, the name of GE Capital was General ElectricCredit Corporation. GE Capital was reincorporated in 2001in the State of Delaware.

2. All outstanding common stock of GE Capitalis owned by General Electric Capital Services, Inc., the commonstock of which is in turn wholly owned directly or indirectlyby General Electric Company (GEC). GEC is a diversified industrialcompany whose common stock is listed and posted for tradingon the facilities of the New York Stock Exchange.

3. GE Capital provides a variety of consumerservices, mid-market financing, specialized financing, specialtyinsurance, equipment management and other specialized servicesto businesses and individuals around the world. As at December31, 2002, GE Capital had total assets of more than US$439billion.

4. GE Capital is not a reporting issuer orthe equivalent in any of the Jurisdictions.

5. GE Capital has been a reporting companyunder the 1934 Act for more than 15 years.

6. GE Capital has filed with the SEC all filingsrequired to be made with the SEC under the 1934 Act duringthe last 12 months.

7. GE Capital's outstanding long term debtis rated AAA by both Standard & Poor's and Moody's InvestorsServices. As at December 31, 2002, GE Capital had more thanUS$138 billion in long term debt outstanding. GE Capital alsohad more than US$76 billion outstanding in the commercialpaper markets as at December 31, 2002.

8. The Issuer was incorporated as an unlimitedliability company under the laws of Nova Scotia on September17, 1998 and is an indirect wholly-owned subsidiary of GECapital. The head office of the Issuer is in Mississauga,Ontario.

9. The Issuer is a reporting issuer or theequivalent in each of the Jurisdictions.

10. The Issuer's primary business is to obtainfinancing in public markets to fund the operations of affiliatedcompanies in Canada, and will have no other operations.

11. In the Matter of General Electric CapitalCorporation and GE Capital Canada Funding Company datedJune 21, 2002 (the Previous Decision), the Decision Makersruled pursuant to the Legislation that the Eligibility Requirement,the Reconciliation Requirement, the AIF Requirement and theContinuous Disclosure and Reporting Requirements be waivedin connection with an offering of Notes by the Issuer (thePrevious Offering).

12. In reliance on the Previous Decision,the Issuer filed and received a receipt for a short form baseshelf prospectus in each of the Jurisdictions on July 18,2002 for Notes in an aggregate principal amount of up to $6,000,000,000(the Previous Prospectus). As at July 1, 2003, Notes in anaggregate principal amount of $5,483,000,000 have been offeredunder the Previous Prospectus.

13. As at December 31, 2002, the Issuer hadmore than $10.2 billion in non-convertible debt securitiesoutstanding (the Existing Debt). The Existing Debt was issuedin the Eurobond market, the Canadian commercial paper marketand pursuant to the Previous Prospectus and has been fullyand unconditionally guaranteed by GE Capital. The Issuer expectsto continue to obtain financing on the same basis from timeto time.

14. The Issuer proposes to file another shortform base shelf prospectus in each of the Jurisdictions forNotes in an aggregate principal amount of up to $6,000,000,000(the Proposed Offering) and may in the future file additionalshort form prospectuses in each of the Jurisdictions for Notes(the Future Offerings).

15. GE Capital satisfies the criteria setforth in paragraph 3.1(a) of National Instrument 71-101 (NI71-101) and is eligible to use the multi-jurisdictional disclosuresystem (MJDS), as set out in NI 71-101, for the purpose ofdistributing approved rating non-convertible debt in Canadabased on compliance with United States prospectus requirementswith certain additional Canadian disclosure.

16. Except for the fact that the Issuer isnot incorporated under United States law, an Offering wouldcomply with the alternative eligibility criteria for offeringsof non-convertible debt having an approved rating under theMJDS as set forth in Section 3.2 of NI 71-101.

17. The Issuer is ineligible to issue theNotes by way of a prospectus in the form of a short form prospectusunder NI 44-101 as GE Capital, as credit supporter for thepayments to be made by the Issuer under the Notes, is nota reporting issuer in any province or territory of Canadaand does not have a current AIF.

18. In connection with any Offering (which,for greater certainty, includes the Proposed Offering andany Future Offerings):

(i) each prospectus will be prepared pursuantto the short form prospectus requirements contained in NI44-101 and will comply with the requirements set out inForm 44-101F3 of NI 44-101 with the disclosure requiredby items 12 (documents incorporated by reference) and 13(issues of guaranteed securities) of Form 44-101F3 of NI44-101 being addressed by incorporating by reference GECapital's public disclosure documents, including GE Capital'smost recently filed Form 10-K (as filed under the 1934 Act)and with the disclosure required by item 7 (earnings coverageratios) of Form 44-101F3 of NI 44-101 and section 8.4 (requirementto update earnings coverage ratios) of National Instrument44-102 (NI 44-102) being addressed by disclosure with respectto GE Capital in accordance with United States requirements;

(ii) each prospectus will include or incorporateby reference all material disclosure concerning the Issuer;

(iii) each prospectus will incorporate byreference GE Capital's most recently filed Form 10-K (asfiled under the 1934 Act) together with all Form 10-Qs andForm 8-Ks of GE Capital filed under the 1934 Act in respectof the financial year following the year that is the subjectof GE Capital's most recently filed Form 10-K, as wouldbe required were GE Capital to file a registration statementon Form S-4 in the United States, and will incorporate byreference any documents of the foregoing type filed afterthe date of the prospectus and prior to termination of theparticular Offering and will state that purchasers of theNotes will not receive separate continuous disclosure informationregarding the Issuer;

(iv) the consolidated annual and interimfinancial statements of GE Capital that will be includedin or incorporated by reference into the short form prospectusare prepared in accordance with U.S. GAAP and otherwisecomply with the requirements of U.S. law, and in the caseof audited annual financial statements, such financial statementsare audited in accordance with U.S. GAAS;

(v) GE Capital will fully and unconditionallyguarantee the payments to be made by the Issuer as stipulatedin the terms of the Notes or in an agreement governing therights of holders of Notes (the Noteholders) such that theNoteholders shall be entitled to receive payment from GECapital within 15 days of any failure by the Issuer to makea payment as stipulated;

(vi) the Notes will have an approved rating;

(vii) the Notes will rank pari passuto the Existing Debt;

(viii) GE Capital will sign each prospectusas credit supporter; and

(ix) GE Capital will undertake to file withthe Commissions, in electronic format through SEDAR (asdefined in National Instrument 13-101) under the Issuer'sSEDAR profile, all documents that it files under Sections13 (other than sections 13(d), (f) and (g) which relate,inter alia, to holdings by GE Capital of securitiesof other public companies) and 15(d) of the 1934 Act, togetherwith the appropriate filing fees, until such time as theNotes are no longer outstanding.

19. In the circumstances, were GE Capitalto effect an Offering of the Notes under the MJDS it wouldbe unnecessary for it to reconcile to Canadian GAAP its financialstatements included in or incorporated by reference into theshort form prospectus in connection with the issuance of theNotes.

20. Part 7 of NI 44-101 and Item 20.1 of Form44-101F3 of NI 44-101 require the reconciliation to CanadianGAAP of financial statements prepared in accordance with foreignGAAP that are included in a short form prospectus.

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 pursuantto the Legislation is that the Filer be exempted from the EligibilityRequirement and the Reconciliation Requirement in connectionwith any Offering (which, for greater certainty, includes theProposed Offering and any Future Offerings) provided that:

(i) each of the Issuer and GE Capital complieswith paragraph 18 above;

(ii) the Issuer complies with all of the filingrequirements and procedures set out in NI 44-101 except asvaried by the Decision or as permitted by NI 44-102;

(iii) GE Capital remains the direct or indirectbeneficial owner of all of the issued and outstanding votingsecurities of the Issuer; and

(iv) GE Capital continues to satisfy the criteriaset forth in paragraph 3.1 of NI 71-101 (or any successorprovision) and remains eligible to use MJDS (or any successorinstrument) for the purposes of distributing approved ratingnon-convertible debt in Canada based on compliance with UnitedStates prospectus requirements with certain additional Canadiandisclosure.

THE FURTHER DECISION of the DecisionMakers in Ontario, Quebec and Saskatchewan pursuant to the Legislationis that, in connection with any Offering (which, for greatercertainty, includes the Proposed Offering and any Future Offerings),the AIF Requirement shall not apply to the Issuer, providedthat (i) GE Capital complies with the AIF requirements of NI44-101 as if it is the issuer by filing an AIF in the form ofGE Capital's most recently filed Form 10-K (as filed under the1934 Act) and (ii) the Filer complies with all of the conditionsin the Decisions above and below.

July 31, 2003.

"Iva Vranic"

THE FURTHER DECISION of the DecisionMakers pursuant to the Legislation is that, in connection withany Offering (which, for greater certainty, includes the ProposedOffering and any Future Offerings):

A. the Annual Financial Statement Requirementshall not apply to the Issuer, provided that (i) the Issuerfiles with the Commissions the annual reports on Form 10-Kfiled by GE Capital with the SEC within one business day afterthey are filed with the SEC; and (ii) such documents are providedto Noteholders whose last address as shown on the books ofthe Issuer is in Canada in the manner and at the time requiredby applicable United States law;

B. the Interim Financial Statement Requirementshall not apply to the Issuer, provided that (i) the Issuerfiles with the Commissions the quarterly reports on Form 10-Qfiled by GE Capital with the SEC within one business day afterthey are filed with the SEC; and (ii) such documents are providedto Noteholders whose last address as shown on the books ofthe Issuer is in Canada in the manner and at the time requiredby applicable United States law;

C. the Material Change Requirement shall notapply to the Issuer, provided that (i) the Issuer files withthe Commissions the mandatory reports on Form 8-K (includingpress releases) filed by GE Capital with the SEC forthwithafter the earlier of the date the report is filed with theSEC and the date it is required to be filed with the SEC;(ii) GE Capital forthwith issues in each Jurisdiction andthe Issuer files with the Commissions any press release thatdiscloses material information and which is required to beissued in connection with the mandatory Form 8-K requirementsapplicable to GE Capital; and (iii) if there is a materialchange in respect of the business, operations or capital ofthe Issuer that is not a material change in respect of GECapital, the Issuer will comply with the requirements of theLegislation to issue a press release and file a material changereport notwithstanding that the change may not be materialin respect of GE Capital;

D. the Insider Reporting Requirement shallnot apply to insiders of the Issuer, provided that such insidersfile with the SEC on a timely basis the reports, if any, requiredto be filed with the SEC pursuant to section 16(a) of the1934 Act and the rules and regulations thereunder; and

E. the Proxy Requirements shall not applyto the Issuer, provided that (i) GE Capital complies withthe requirements of the 1934 Act and the rules and regulationsthereunder relating to proxy statements, proxies and proxysolicitations in connection with any meetings of its noteholders(if any); (ii) the Issuer files with the Commissions the materialsrelating to any such meeting filed by GE Capital with theSEC within one business day after they are filed by GE Capitalwith the SEC; and (iii) such documents are provided to Noteholderswhose last address as shown on the books of the Issuer isin Canada in the manner, at the time and if required by applicableUnited States law;

for so long as (i) GE Capital maintains an approvedrating in respect of the Notes; (ii) GE Capital maintains director indirect beneficial ownership of all of the issued and outstandingvoting securities of the Issuer; (iii) GE Capital maintainsa class of securities registered pursuant to section 12(b) or12(g) of the 1934 Act or is required to file reports under Section15(d) of the 1934 Act; (iv) GE Capital continues to satisfythe criteria set forth in paragraph 3.1 of NI 71-101 (or anysuccessor provision) and remains eligible to use MJDS (or anysuccessor instrument) for the purpose of distributing approvedrating non-convertible debt in Canada based on compliance withUnited States prospectus requirements with certain additionalCanadian disclosure; (v) the Issuer carries on no other businessthan that set out in paragraph 10 of the Decision; (vi) GE Capitalcontinues to fully and unconditionally guarantee the Notes asto the payments required to be made by the Issuer to the Noteholders;(vii) the Issuer does not issue additional securities otherthan (a) the Notes, debt securities ranking pari passuto the Notes, any debentures issued in connection with the securitygranted by the Issuer to the Noteholders or the holders of theExisting Debt or debt ranking pari passu with the Notes,or (b) to GE Capital or to, direct or indirect, wholly-ownedsubsidiaries of GE Capital; and (viii) if debt securities rankingpari passu with the Notes are hereinafter issued by theIssuer, GE Capital shall fully and unconditionally guaranteesuch debt securities as to the payments required to be madeby the Issuer to holders of such debt securities.

THE FURTHER DECISION of the DecisionMakers pursuant to the Legislation is that the Application andthe Decision shall be held in confidence by the Decision Makersuntil the earlier of the date that the preliminary prospectusis filed in connection with the Proposed Offering and August31, 2003.

July 31, 2003.

"Robert W. Korthals"
"H. Lorne Morphy"