Securities Law & Instruments

Headnote

MI 11-102 and NP 11-203 -- capital trust established by bank to issue trust subordinated notes as cost-effective means of raising capital for Canadian bank regulatory purposes exempted from eligibility requirements to file a short-form base shelf prospectus -- trust previously granted relief from the eligibility requirements and certain disclosure requirements under NI 44-101 -- relief granted subject to certain conditions -- relief also granted for temporary confidentiality of decision.

Applicable Legislative Provisions

National Instrument 44-101 Short Form Prospectus Distributions, s. 2.1.

June 12, 2009

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO

(the "Jurisdiction")

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

THE TORONTO-DOMINION BANK (the "Bank") AND

TD CAPITAL TRUST IV (the "Trust" and, together

with the Bank, the "Filers")

DECISION

Background

The principal regulator in the Jurisdiction has received an application (the "Application") from the Filers for a decision (the "Requested Relief") under the securities legislation of the Jurisdiction of the principal regulator (the "Legislation") that:

(a) the Trust be exempted from the qualification requirements (the "Qualification Requirements") of Part 2 of National Instrument 44-102 Shelf Distributions ("NI 44-102"), such that the Trust is qualified to file a prospectus in the form of a short form base shelf prospectus in connection with offerings by the Trust from time to time of Notes (as defined herein) and other securities issued in connection with Notes; and

(b) the Application and this decision document be held in confidence by the principal regulator, subject to certain conditions.

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):

(a) the Ontario Securities Commission (the "Commission") is the principal regulator for this application; and

(b) the Filers have provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System ("MI 11-102") is intended to be relied upon in each of the provinces and territories of Canada other than Ontario.

Interpretation

The terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined herein.

"Bank Act" means the Bank Act (Canada); and

"Prospectus" means the short form prospectus of the Bank and the Trust dated January 15, 2009 in respect of the Offering (as defined below).

Representations

This decision is based on the following facts represented by the Filers:

The Bank

1. The Bank is a Schedule 1 chartered bank subject to the provisions of the Bank Act. The head office of the Bank is located at P.O. Box 1, Toronto-Dominion Centre, Toronto, Ontario M5K 1A2.

2. The authorized share capital of the Bank consists of an unlimited number of: (i) common shares ("Bank Common Shares"); and (ii) Class A First Preferred Shares ("Bank Preferred Shares") issuable in series.

3. The Bank Common Shares are listed and posted for trading on the Toronto Stock Exchange and the New York Stock Exchange.

4. The Bank is a reporting issuer in each province and territory of Canada and is not, to the best of its knowledge, in default of any requirement of the securities legislation in such jurisdictions.

The Trust

5. The Trust is a trust established under the laws of the Province of Ontario pursuant to an amended and restated declaration of trust dated as of January 26, 2009, as may be amended, restated or supplemented from time to time. The Trust's head and registered office is located at c/o The Toronto-Dominion Bank, Toronto Dominion Bank Tower, Toronto-Dominion Centre, Toronto, Ontario, M5K 1A2.

6. The Trust was established by the Bank in order to comply with the regulatory requirements of the Superintendent of Financial Institutions (Canada) (the "Superintendent") relating to the issuance of innovative capital instruments (as contained in the Superintendent's Principles Governing Inclusion of Innovative Instruments in Tier 1 Capital).

7. The Trust completed an initial public offering (the "Offering") of two series of subordinated notes of the Trust (the "Notes") in each of the provinces and territories of Canada on January 26, 2009 and may, from time to time, issue further series of Notes. The first series of Notes were designated as 9.523% TD Capital Trust IV Notes -- Series 1 Due June 30, 2108 (the "TD CaTS IV -- Series 1") and the second series of Notes were designated as 10.00% TD Capital Trust IV Notes -- Series 2 Due June 30, 2108 (the "TD CaTS IV -- Series 2" and collectively with the TD CaTS IV -- Series 1, the "TD CaTS IV Notes"). The capital of the Trust consists of the TD CaTS IV Notes issued pursuant to the Offering and voting trust units, issuable in series (the "Voting Trust Units" and, collectively with the Notes, the "Trust Securities"). All of the Voting Trust Units are held by the Bank.

8. As a result of the Offering, the Trust became a reporting issuer in each of the provinces and territories of Canada. The Trust is not, to the best of its knowledge, in default of any requirement of the securities legislation in such jurisdictions.

9. The Trust is a single purpose vehicle established for the purpose of effecting offerings of Trust Securities in order to provide the Bank with a cost effective means of raising capital for Canadian bank regulatory purposes by means of: (i) offering Notes to the public from time to time; and (ii) acquiring and holding assets, which will consist primarily of one or more senior unsecured deposit notes of the Bank and certain other eligible assets (collectively, the "Trust Assets"). The Trust Assets will generate income for distribution to holders of Trust Securities. The Trust does not and will not carry on any operating activity other than in connection with offerings of Trust Securities and in connection with the Trust Assets.

10. The Trust may, from time to time issue further series of Notes which qualify as Tier 1 capital of the Bank for regulatory purposes, the proceeds of which would be used to acquire additional Trust Assets.

11. The specific terms of any future series of Notes will be set forth in a prospectus supplement to a short form base shelf prospectus which may include, where applicable, the aggregate principal amount, the currency or the currency unit for which the Notes may be purchased, maturity, interest provisions, authorized denominations, offering price, any terms for redemption at the option of the Trust or the holder, any exchange or conversion terms and any other specific terms.

12. The Notes will be direct unsecured obligations of the Trust ranking at least equally with other subordinated indebtedness of the Trust from time to time issued and outstanding. Holders of Notes may be required, in certain circumstances, to invest interest paid on the Notes in a new series of Bank Preferred Shares (a "Deferral Event Subscription"). In addition, the Notes may be automatically exchanged, without the consent of the holder, for newly-issued Bank Preferred Shares upon the occurrence of certain stated events relating to the solvency of the Bank or actions taken by the Superintendent in respect of the Bank (an "Automatic Exchange").

13. Because of the terms of the Notes, and the various covenants of the Bank made in relation to the Trust and the Notes, information about the affairs and financial performance of the Bank, as opposed to that of the Trust, is meaningful to holders of Notes.

14. It is expected that future series of Notes will receive an approved rating from an approved rating organization, as defined in NI 44-101.

15. Pursuant to a decision dated December 29, 2008, the Commission, as principal regulator, granted relief to the Bank and the Trust from the qualification requirements of Part 2 of National Instrument 44-101 -- Short Form Prospectus Distributions ("NI 44-101") and the disclosure requirements (the "Disclosure Requirements") in Item 6 (Earnings Coverage Ratios) and Item 11 (Documents Incorporated by Reference), with the exception of Item 11.1(1)(5), of Form 44-101F1 of NI 44-101 ("Form 44-101F1") in respect of the Trust, as applicable, in connection with offerings by the Trust from time to time of Notes, subject to the satisfaction of certain conditions.

16. At the time of the filing of any short form base shelf prospectus, or any supplement thereto, in connection with proposed offerings of Notes from time to time:

(a) the short form base shelf prospectus or supplement, as applicable, will be prepared in accordance with the requirements of NI 44-101 and NI 44-102, as applicable, other than the Disclosure Requirements, except as permitted by the Legislation;

(b) the Trust will comply with all of the filing requirements and procedures set out in NI 44-101 and NI 44-102 other than the Disclosure Requirements and the Qualification Requirements, except as permitted by the Legislation;

(c) the prospectus will incorporate by reference the documents that would be required to be incorporated by reference under Item 11 of Form 44-101F1 if the Bank were the issuer of such securities;

(d) the prospectus disclosure required by Item 11 (other than Item 11.1(1)(5)) of Form 44-101F1 in respect of the Trust) will be addressed by incorporating by reference the Bank's public disclosure documents referred to in paragraph 16(c) above; and

(e) the Bank will satisfy the criteria in section 2.2 of NI 44-101 if the word "issuer" is replaced with "Bank".

Decision

The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.

The decision of the principal regulator under the Legislation is that the Requested Relief is granted provided that:

1. the Trust and the Bank, as applicable, comply with paragraph 16 above;

2. a receipt issued for a short form base shelf prospectus of the Trust will be effective for the period set out in section 2.2(3) of NI 44-102 provided that, for the purposes of subsections 2.2(3)(b)(i), (ii), (iii) and (iv) thereof, the word "issuer" is replaced with "Bank";

3. the Bank remains the direct or indirect beneficial owner of all of the outstanding Voting Trust Units;

4. the Notes will not be exchangeable for securities other than Bank Preferred Shares;

5. the Bank, as holder of the Voting Trust Units, will not propose changes to the terms and conditions of any outstanding Notes offered and sold pursuant to a short form base shelf prospectus of the Trust filed under this decision that would result in such Notes being exchangeable for securities other than Bank Preferred Shares;

6. the Trust has minimal assets, operations, revenues or cash flows other than those related to the issuance, administration and repayment of the Trust Securities or the administration of the Trust Assets;

7. the Trust issues a news release and files a material change report in accordance with Part 7 of NI 51-102, as amended, supplemented or replaced from time to time, in respect of any material change in the affairs of the Trust that is not also a material change in the affairs of the Bank;

8. the Trust is an electronic filer under NI 13-101;

9. the Trust is a reporting issuer in at least one jurisdiction of Canada;

10. the Trust files with the securities regulatory authority in each jurisdiction in which it is a reporting issuer all periodic and timely disclosure documents that it is required to have filed in that jurisdiction: (a) under all applicable securities legislation; (b) pursuant to an order issued by the securities regulatory authority; or (c) pursuant to an undertaking to the securities regulatory authority;

11. the Notes to be distributed (a) have received an approved rating on a provisional basis; (b) are not the subject of an announcement by an approved rating organization, of which the issuer is or ought reasonably to be aware, that the approved rating given by the organization may be down-graded to a rating category that would not be an approved rating, and (c) have not received a provisional or final rating lower than an approved rating from any approved rating organization; and

12. the only securities of the Trust distributed pursuant to a short form base shelf prospectus are Notes or other securities issued in connection therewith to enable the Notes to qualify as Tier 1 capital of the Bank under the Canadian bank regulatory guidelines issued by the Superintendent or other governmental authority in Canada concerning the maintenance of adequate capital reserves by Canadian chartered banks from time to time, including the Deferral Event Subscription or the Automatic Exchange.

The further decision of the principal regulator is that the application of the Filers and this decision shall be held in confidence by the principal regulator until the earlier of (i) the date that a preliminary short form base shelf prospectus is filed by the Bank and the Trust, and (ii) August 31, 2009.

"Jo-Anne Matear"
Assistant Manager, Corporate Finance