Securities Law & Instruments

Headnote

Mutual Reliance Review System for Exemptive Relief Applications -- issuer to distribute medium term notes -- medium term notes fully and unconditionally guaranteed -- issuer exempt from the requirement that AIF include selected consolidated financial information and MD&A -- relief conditional upon AIF incorporating selected conditional financial information and MD&A of guarantor.

Applicable Ontario Statutory Provisions

Securities Act, R.S.O. 1990, c. S.5, as am.

Applicable Ontario Rules

Ontario Securities Commission Rule 51-501 AIF & MD&A (2000) 23 OSCB 8365, as am. (2001) 24 OSCB 7417.

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO, SASKATCHEWAN AND QUEBEC

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEW SYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

DOMINION CANADA FINANCE COMPANY

AND DOMINION RESOURCES, INC.

 

MRRS DECISION DOCUMENT

WHEREAS the local securities regulatory authority or regulator (the "Decision Maker") in each of Ontario, Saskatchewan, and Quebec (the "Jurisdictions") has received an application (the "Application") from Dominion Resources, Inc. ("DRI") and Dominion Canada Finance Company ("DomCan" and together with DRI, the "Applicants") for a decision under the securities legislation of the Jurisdictions (the "Legislation") that the Applicants be exempted from the requirement contained in the Legislation to file with the applicable Decision Makers an annual information form (an "AIF") and file with the applicable Decision Makers and send to its security holders annual and interim MD&A (collectively, the "AIF and MD&A Requirements"):

AND WHEREAS under the Mutual Reliance Review System for Exemptive Relief applications (the "System"), the Ontario Securities Commission is the principal regulator for the Application;

AND WHEREAS, unless otherwise defined, the terms herein have the meanings set out in National Instrument 14-101 Definitions;

AND WHEREAS the Applicants have represented to the Decision makers that:

1. DomCan was incorporated under the Companies Act (Nova Scotia) on August 20, 2001 and is an indirect wholly-owned subsidiary of DRI. DomCan was extra-provincially registered in Alberta on August 21, 2001.

2. The registered office of DomCan is in Halifax, Nova Scotia and its head office is located in Calgary, Alberta.

3. DomCan's only business is to access Canadian capital markets to raise funds, which it lends or otherwise invests in the Canadian subsidiary companies of DRI. DomCan does not carry on any operating business.

4. DomCan became a reporting issuer or its equivalent in the Jurisdictions on November 30, 2001 by virtue of filing a short form prospectus in connection with the establishment in Canada of its MTN program (as defined in National Instrument 44-102 ("NI 44-102")) pursuant to the provisions of National Instrument 44-101 ("NI 44-101") and NI 44-102 (the "Existing Program").

5. Pursuant to the Existing Program, DomCan could issue up to Cdn. $750,000,000 notes over a 25 month period (the "First Series Notes") fully and unconditionally guaranteed by DRI as to payment of principal, interest and all other amounts due thereunder. As at November 13, 2003, DomCan had issued and outstanding a total of Cdn. $315,000,000 in principal amount of First Series Notes.

6. DRI was incorporated under the laws of the Commonwealth of Virginia in 1983 and is not a reporting issuer or the equivalent in any of the Jurisdictions.

7. DRI has been a reporting company under the United States Securities Exchange Act of 1934, as amended (the "1934 Act") since 1983.

8. DRI has filed with the United States Securities and Exchange Commission (the "SEC") all filings required to be made with the SEC under Sections 13 and 15(d) of the 1934 Act since it first became a reporting company.

9. As at December 31, 2002, DRI had approximately US $6.7 billion in long term debt outstanding. All of DRI's directly issued outstanding long term debt is rated "BBB+" by Standard & Poor's Corporation, and "Baa-1" by Moody's Investors Service, Inc..

10. The common stock of DRI is publicly traded and listed under the symbol "D" on the New York Stock Exchange (the "NYSE"). As at the close of trading on the NYSE on November 13, 2003, the common stock of DRI not held by affiliates of DRI had a market value in excess of US $19,923,991,281.

11. DRI is the largest fully integrated gas and electric company in the United States with five million customers, more than 24,000 megawatts of electric power generation, 6.2 trillion cubic feet of proved natural gas reserves and operates North America's largest natural gas storage system. DRI owns and manages assets valued in excess of US$37 billion as of December 31, 2002.

12. In connection with the establishment of the Existing Program, relief was obtained from the applicable legislation in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Nova Scotia, Prince Edward Island, Newfoundland and Labrador and New Brunswick (the "Provinces") from:

(a) the requirement pursuant to NI 44-101 that an issuer guaranteeing debt issued by a subsidiary be a reporting issuer with a 12 month reporting history in a Canadian province or territory (the "Eligibility Requirement");

(b) the requirement pursuant to NI 44-101 to reconcile financial statements included in a prospectus and prepared in accordance with generally accepted accounting principles ("GAAP") of a foreign jurisdiction to Canadian GAAP (the "Canadian GAAP Reconciliation Requirement");

(c) the requirement to provide, where financial statements are audited in accordance with generally accepted auditing standards ("GAAS") of a foreign jurisdiction, a statement by the auditor: (a) disclosing any material differences in the form and content of the auditor's report as compared to a Canadian auditor's report; and (b) confirming that the auditing standards of the foreign jurisdiction are substantially equivalent to Canadian GAAS (the "Canadian GAAS Reconciliation Requirement" and together with the Canadian GAAP Reconciliation Requirement, the "Reconciliation Requirement");

(d) the requirement that DomCan issue and file news releases with respect to material changes and file material change reports (collectively, the "Material Change Requirements");

(e) the requirement that DomCan satisfy the proxy and proxy solicitation requirements, including filing an information circular or report in lieu thereof annually (the "Proxy Requirements");

(f) the requirement that the insiders of DomCan file insider reports (the "Insider Reporting Requirements");

(g) the requirement that DomCan file with the decision makers in the Provinces and send to its security holders audited annual financial statements and an annual report, where applicable (the "Annual Financial Statement Requirements");

(h) the requirement that DomCan file with the decision makers in the Provinces and send to its security holders unaudited interim financial statements (the "Interim Financial Statement Requirements"); and

(i) the requirement that a short form prospectus include the information set forth in items 12.1, 12.2 and 13 of Form 44-101F3 ("44-101F3") of NI 44-101 (the "Prospectus Disclosure Requirements"),

in the Jurisdictions, on the condition, among others, that the continuous disclosure materials filed by DRI in the United States would be filed in the Jurisdictions (collectively, all such relief being provided by the "Prior Decision").

13. In connection with the establishment of the Existing Program, relief was also obtained from the Jurisdictions from the AIF and MD&A Requirements (the "AIF Decision").

14. DomCan has complied with the conditions of relief set out in the Prior Decision and the AIF Decision and has been filing DRI's continuous disclosure materials in Canada.

15. DomCan proposes to renew its Existing Program pursuant to NI 44-101 and NI 44-102 to provide the ability to raise up to Cdn. $500,000,000 in Canada (the "Proposed Offering") through the issuance of additional notes ("Second Series Notes") from time to time over a 25 month period and may in the future file additional short form shelf prospectuses in each of the Provinces in respect of the issuance by DomCan of additional medium term notes from time to time (the "Future Offerings" and together with the Proposed Offering, the "Offerings" and each an "Offering"). The Second Series Notes and any other medium term notes issued by DomCan pursuant to an Offering (collectively, the "Notes") will be fully and unconditionally guaranteed by DRI as to payment of principal, interest and all other amounts due thereunder and have an Approved Rating.

16. In connection with the Proposed Offering and any Future Offering, the Applicants are concurrently seeking relief from the Reconciliation Requirement, Annual Financial Statement Requirements, Interim Financial Statement Requirements, Material Change Requirements, Insider Reporting Requirements, Proxy Requirements and Prospectus Disclosure Requirements from the decision makers in the Provinces substantially similar to the Prior Decision.

17. DRI satisfies the criteria set forth in paragraph 3.1(a) of National Instrument 71-101 ("NI 71-101") and is eligible to use the multi-jurisdictional disclosure system ("MJDS") (as set out in NI 71-101) for the purpose of distributing approved rating non-convertible debt in Canada based on compliance with US prospectus requirements with certain additional Canadian disclosure.

18. Except for the fact that DomCan is not incorporated in a United States jurisdiction, an Offering would comply with the alternative eligibility criteria of non-convertible debt having an approved rating under the MJDS as set forth in paragraphs 3.1 and 3.2 of NI 71-101.

19. DomCan does not satisfy the alternative criteria for issuers of guaranteed non-convertible securities, as set out in section 2.5 of NI 44-101, solely because DRI (as guarantor of an Offering) is not a reporting issuer in any Jurisdiction.

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

(a) each short form base shelf prospectus will be prepared pursuant to the Shelf Requirements, with the disclosure required by: (i) items 12 and 13 of 44-101F3 being addressed by incorporating by reference DRI's public disclosure documents, including DRI's annual information form in the form of an annual report on Form 10-K; and (ii) item 7 of Form 44-101F3 in respect of DomCan being addressed by disclosure with respect to DRI in accordance with United States' requirements;

(b) each prospectus will incorporate by reference: (i) disclosure made in DRI's most recent annual report on Form 10-K filed under the 1934 Act, together with all quarterly reports on Form 10-Q and mandatory current reports on Form 8-K filed under the 1934 Act in respect of the financial year following the year that is the subject of DRI's most recently filed annual report on Form 10-K; and (ii) any documents of the foregoing type filed after the date of the Prospectus and prior to the termination of the Offering; and will state that purchasers of Notes will not receive separate continuous disclosure information regarding DomCan;

(c) DRI will fully and unconditionally guarantee the Notes as to the payments required to be made by DomCan to holders of the Notes under the provisions of the supplemental trust indenture relating to the particular Notes;

(d) any Notes will have an Approved Rating;

(e) the consolidated annual and interim financial statements of DRI that will be included in or incorporated by reference in any short form shelf prospectus of DomCan will be prepared in accordance with GAAP in the United States that the SEC has identified as having substantive authoritative support, as supplemented by Regulation S-X and Regulation S-B under the 1934 Act and in the case of audited annual financial statements, such financial statements will be audited in accordance with GAAS in the United States, as supplemented by the SEC's rules on auditor independence;

(f) DRI will sign each short form shelf prospectus as credit supporter;

(g) DRI will undertake to file with the Decision Makers in electronic format under DomCan's SEDAR profile all documents that it files with the SEC under sections 13, 14, and 15(d) of the 1934 Act, on the same day on which they are filed with the SEC, or as soon as practicable thereafter, until such time as the Notes are no longer outstanding; and

(h) DRI will maintain a class of securities registered pursuant to section 12 of the 1934 Act.

AND WHEREAS under the System this MRRS Decision Document evidences the decision of each Decision Maker (collectively, the "Decision");

AND WHEREAS each of the Decision Makers is satisfied that the test contained in the Legislation that provides the Decision Maker with the jurisdiction to make the Decision has been met;

THE DECISION of the Decision Makers under the Legislation is that the AIF and MD&A Requirements shall not apply to DomCan for so long as:

(i) DomCan's AIF (and any renewal AIF filed by DomCan) incorporates the selected consolidated financial information and management's discussion and analysis of DRI (prepared in the manner required by applicable United States law) that would be required if DRI was the issuer preparing the AIF;

(ii) DRI files with the Decision Makers an AIF in the form of an annual report on Form 10-K, in electronic format through SEDAR under DomCan's SEDAR profile; and

(iii) each of DRI and DomCan comply with the provisions of paragraph 20 above.

December 4, 2003.

"Charlie MacCready"