British Telecommunications Plc

Headnote

National Policy 11-206 Process for Cease to be a Reporting Issuer Applications -- Application for an order that the issuer is not a reporting issuer under applicable securities laws -- requested relief granted.

Cease to be a reporting issuer in BC -- The issuer's securities are traded only on a market or exchange outside of Canada -- The only publicly held securities of the issuer are debt securities listed on a foreign exchange; the issuer is not able to accurately determine beneficial ownership of the debt securities; the debt securities were not marketed to Canadians; the filer provided alternative evidence to support that Canadian residents hold a de minimis number of the filer's securities and represent a de minimis number of the total number of debt holders; the issuer has no present intention of conducting a public offering of its securities to Canadian residents; the issuer is subject to the reporting requirements of the securities laws of an acceptable foreign jurisdiction and has undertaken to provide any Canadian security holders the same disclosure it is required to provide its security holders in its home jurisdiction.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., s. 1(10)(a)(ii).

May 26, 2022

IN THE MATTER OF THE SECURITIES LEGISLATION OF BRITISH COLUMBIA AND ONTARIO (the Jurisdictions) AND IN THE MATTER OF THE PROCESS FOR CEASE TO BE A REPORTING ISSUER APPLICATIONS AND IN THE MATTER OF BRITISH TELECOMMUNICATIONS PLC (the Filer)

ORDER

Background

¶ 1 The securities regulatory authority or regulator in each of the Jurisdictions (Decision Maker) has received an application dated April 7, 2021 from the Filer for an order under the securities legislation of the Jurisdictions (the Legislation) that the Filer has ceased to be a reporting issuer in all jurisdictions of Canada in which it is a reporting issuer (the Order Sought).

Under the Process for Cease to be a Reporting Issuer Applications (for a dual application):

(a) the British Columbia Securities Commission is the principal regulator for this application;

(b) the Filer has provided notice that section 4C.5(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in Nova Scotia; and

(c) this order is the order of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.

Interpretation

¶ 2 Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this order, unless otherwise defined.

Representations

¶ 3 This order is based on the following facts represented by the Filer:

1. the Filer is a company incorporated under the laws of England and Wales, with its head office in London, England;

2. the Filer is a reporting issuer in each of British Columbia, Ontario and Nova Scotia (collectively, the Reporting Jurisdictions);

3. BT Group plc (BT Group), a company incorporated under the laws of England and Wales, with its head office in London, England, is the indirect parent company of the Filer; all of the issued and outstanding equity securities of the Filer are indirectly owned and controlled by BT Group through two wholly-owned subsidiaries of BT Group;

4. while two indirect subsidiaries of BT Group have operations and customers in the Reporting Jurisdictions, neither BT Group nor the Filer directly has a head office, management, assets or operations in Canada;

5. the British Columbia Securities Commission was selected as principal regulator for the application because more registered shareholders of BT Group (the Filer's indirect parent company) are listed as having an address in British Columbia than in any other jurisdiction of Canada; BT Group concurrently applied to cease to be a reporting issuer in British Columbia and all other jurisdictions of Canada where BT Group is a reporting issuer and on March 22, 2022 was granted an order that it had ceased to be a reporting issuer in all jurisdictions of Canada where it was a reporting issuer;

6. the Filer is subject to securities laws in the United Kingdom, the rules and policies of the Financial Conduct Authority, including its Listing Rules, the Companies Act 2006, the EU Market Abuse Regulation and the Disclosure Guidance and Transparency Rules (collectively, UK Securities Laws); the Filer is not in default of UK Securities Laws;

7. the Filer completed a demerger transaction in 2001 (the Demerger); prior to the Demerger, the Filer was a reporting issuer in British Columbia, Nova Scotia, Québec and Ontario; as part of the Demerger, ordinary shares of BT Group were listed on the London Stock Exchange (LSE) and the Filer became an indirect wholly-owned subsidiary of BT Group; in connection with the Demerger, the shares of the Filer ceased to be publicly listed; following the Demerger, the Filer continued to be a reporting issuer in British Columbia, Nova Scotia and Ontario;

8. the Filer is a "designated foreign issuer" within the meaning of National Instrument 71-102 Continuous Disclosure and Other Exemptions Related to Foreign Issuers;

9. since all of the issued and outstanding equity securities of the Filer are owned by affiliates of the Filer, there are no holders of equity securities of the Filer held by securityholders listed as having an address in Canada;

10. neither the number of debt securities of the Filer held by securityholders listed as having an address in Canada, nor the number of debt securityholders of the Filer with an address in Canada are believed to be significant;

11. since January 1, 2000, which is the earliest date that the National Storage Mechanism for the storage of regulated information in the United Kingdom has records, the Filer has not made a direct distribution of equity securities in Canada;

12. the Filer has 27 series of bonds (the Bonds) that are listed on the LSE;

13. the Bonds are held through depositaries by institutional nominees; because the institutional nominees are not obligated to disclose the identity of the beneficial holders on whose behalf they are holding the Bonds, the Filer does not currently have information regarding whether any of the Bonds are beneficially held by Canadians; to obtain such information would entail substantial time and resources and the information would not be entirely accurate as it would rely on the institutional holders responding to the request;

14. the records for the series of Bonds issued prior to 2016 are unavailable (the Pre-2016 Bonds); of the 23 series of Bonds issued in 2016 and later for which information regarding the initial purchasers is available (the Recent Bonds), three of those series (the Subject Bonds) had one purchaser with an address in Canada at the time of the initial offering of such Bonds;

15. the Canadian purchaser of the three series of the Subject Bonds was an institutional investor; there were over 100 purchasers for each series of Subject Bonds, such that the Canadian purchaser represented less than 1% of the number of purchasers of each series of the Subject Bonds worldwide; the aggregate principal amount of the three series of Subject Bonds purchased by the Canadian purchaser represented 0.07%, 0.1% and 0.4%, respectively, of the outstanding principal amount for each series of Subject Bonds;

16. the Recent Bonds were not marketed in Canada and the offering materials for the Recent Bonds did not disclose that the Filer is a reporting issuer in Canada; holders of the Bonds have online access to annual reports and accounts and half-year results of the Filer that are published on the Filer's website and announced via the UK's Regulatory News Service and filed with the UK National Storage Mechanism, as well as other disclosure documents of the Filer that are published on the website for BT Group, the indirect parent company of the Filer;

17. while the Filer does not have information on the initial purchasers of the four series of Pre-2016 Bonds, the Filer did not actively solicit Canadian investors for the Pre-2016 Bonds; similar to the offerings of the Recent Bonds, the offerings of the Pre-2016 Bonds were aimed at US and European investors and the applicable offering documents did not refer to Canadians being able to participate in such offerings; accordingly, the Filer has no reason to believe the distributions of the Pre-2016 Bonds were any different than the distributions of the Recent Bonds or that the Pre-2016 Bonds would have a greater proportion of Canadian holdings than the Recent Bonds;

18. in the last twelve months, the Filer has not conducted a prospectus offering in Canada and has not taken steps to create a market for its securities in Canada; the Filer has no current intention to conduct any offerings of its securities in Canada; no securities of the Filer, including debt securities, are traded on a marketplace as defined in National Instrument 21-101 Marketplace Operation and the Filer does not intend to have its securities listed, traded or quoted on such a marketplace in Canada;

19. the Filer is applying for a decision that the Filer has ceased to be a reporting issuer in all of the jurisdictions of Canada in which it is a reporting issuer;

20. the Filer is not in default of securities legislation in any jurisdiction other than the filing of the annual report and annual financial statements of BT Group for the fiscal year ended March 31, 2021, which were not filed because they became due after the Filer filed the application to cease to be a reporting issuer;

21. the Filer issued a news release on January 17, 2022 announcing it had submitted an application to the Decision Makers for a decision that it is not a reporting issuer and, if that decision is granted, the Filer will no longer be a reporting issuer in any jurisdiction of Canada;

22. the Filer has provided an undertaking to the Decision Makers to concurrently deliver to any Canadian resident securityholder all disclosure materials the Filer is required to deliver to securityholders in the United Kingdom under UK Securities Laws;

23. Canadian holders of the Bonds will continue to receive the same continuous disclosure documents that they received prior to the granting of the Order Sought;

24. the Filer is not eligible to use the simplified procedure under National Policy 11-206 Process for Cease to be a Reporting Issuer Applications (NP 11-206) as its outstanding securities are beneficially owned by more than 51 securityholders worldwide;

25. the Filer is not eligible to use the modified procedure under NP 11-206 because it does not file continuous disclosure reports under U.S. securities laws and its securities are not listed on a U.S. exchange;

26. the Filer is not an electronic filer in the Reporting Jurisdictions; and

27. upon granting of the Order Sought, the Filer will no longer be a reporting issuer in any jurisdiction in Canada.

Order

¶ 4 Each of the Decision Makers is satisfied that the order meets the test set out in the Legislation for the Decision Maker to make the order.

The decision of the Decision Makers under the Legislation is that the Order Sought is granted.