Securities Law & Instruments

IN THE MATTER OF
OSC RULE 91-501 STRIP BONDS
(the “Strip Bond Rule”)

AND

IN THE MATTER OF
THE INVESTMENT INDUSTRY REGULATORY ORGANIZATION OF CANADA

AND

IN THE MATTER OF
A STRIP BOND INFORMATION STATEMENT

REVOCATION

                WHEREAS section 4.3 of the Strip Bond Rule provides that the Director may revoke an acceptance of a strip bond information statement if the strip bond information statement does not comply with section 4.1 of the Strip Bond Rule; 

                AND WHEREAS on July 28, 2003, the Director accepted an information statement dated June 2003 (the 2003 Information Statement) pursuant to section 4.2 of the Strip Bond Rule that was submitted by the Investment Dealers Association (IDA);

                AND WHEREAS on June 4, 2014, the Director accepted a revised strip bond information statement (the 2014 Information Statement) submitted by the successor to the IDA, the Investment Industry Regulatory Organization of Canada (IIROC), pursuant to section 4.2 of the Strip Bond Rule;

                AND WHEREAS the 2014 Information Statement:

(a)           removed the tax tables and formulas provided in the 2003 Information Statement describing the income tax treatment of strip bonds to avoid any inconsistencies with official tax guidance issued by the Canada Revenue Agency (the CRA); and

(b)           modified the section in the 2003 Information Statement discussing the tax treatment of strip bond packages to reflect guidance received by IIROC indicating that the CRA may accept alternative tax reporting methods in cases where the strip bond package is issued at or near par and is kept intact;

                AND WHEREAS IIROC has asked IIROC-regulated investment dealers to begin using the 2014 Information Statement no later than January 2, 2015 in IIROC Notice 14-0158 dated June 26, 2014, available on the IIROC website at www.iiroc.ca;

                AND WHEREAS the 2003 Information Statement no longer complies with paragraph 4.1(f) of the Strip Bond Rule;

                AND WHEREAS IIROC has been given an opportunity to be heard pursuant to subsection 4.3(2) of the Strip Bond Rule and has informed staff of the Commission that it does not object to the Director revoking the acceptance of the 2003 Information Statement;

                THE DIRECTOR HEREBY REVOKES the acceptance of the 2003 Information Statement effective January 2, 2015.

                DATED at Toronto, Ontario this 22nd day of December, 2014.

“Jo-Anne Matear”
Manager, Corporate Finance