Bank of Montreal et al. -- s. 5.1 of OSC Rule 48-501 Trading During Distributions, Formal Bids and Share Exchange Transactions

Headnote

Section 5.1 of the OSC Rule 48-501 Trading during Distributions, Formal Bids and Share Exchange Transactions (Rule) -exemption granted from trading restrictions imposed by sections 2.1(a) and 2.2 of the Rule.

Rules Cited

Ontario Securities Commission Rule 48-501 -- Trading During Distributions, Formal Bids and Share Exchange Transactions.

March 29, 2011

IN THE MATTER OF

THE SECURITIES ACT,

R.S.O. 1990, CHAPTER S.5, AS AMENDED

(the Act)

AND

ONTARIO SECURITIES COMMISSION RULE 48-501

TRADING DURING DISTRIBUTIONS, FORMAL

BIDS AND SHARE EXCHANGE TRANSACTIONS

(the Rule)

AND

IN THE MATTER OF

BANK OF MONTREAL,

BMO NESBITT BURNS INC.,

BMO ASSET MANAGEMENT INC.,

BMO HARRIS INVESTMENT MANAGEMENT INC.,

PYRFORD INTERNATIONAL LIMITED,

HARRIS INVESTMENT MANAGEMENT, INC.,

HIM MONEGY, INC.,

HARRIS N.A.,

THE HARRIS BANK N.A.,

SULLIVAN, BRUYETTE, SPEROS & BLAYNEY, INC.,

STOKER OSTLER WEALTH ADVISORS, INC.,

HARRIS MYCFO INVESTMENT ADVISORY SERVICES LLC,

AND HARRIS INVESTOR SERVICES INC.

DECISION

(Section 5.1 of the Rule)

UPON the Director (as defined in the Act) having received an application (the Application) from Bank of Montreal (Bank), BMO Nesbitt Burns Inc. (BMO Nesbitt), BMO Asset Management Inc. (BMO Asset Management), BMO Harris Investment Management Inc. (BMO Harris), Pyrford International Limited (Pyrford), Harris Investment Management, Inc. (Harris Investment), HIM Monegy, Inc. (HIM Monegy), Harris N.A. (Harris NA), The Harris Bank N.A. (Harris Bank), Sullivan, Bruyette, Speros & Blayney, Inc. (SBSB), Stoker Ostler Wealth Advisors, Inc. (Stoker), Harris myCFO Investment Advisory Services LLC (Harris LLC), and Harris Investor Services Inc. (Harris Investor) for a decision (or its equivalent) pursuant to section 5.1 of the Rule exempting insiders of the Bank, and exempting BMO Nesbitt, BMO Asset Management, BMO Harris, Pyrford, Harris Investment HIM Monegy, Harris NA, Harris Bank, SBSB, Stoker, Harris LLC and Harris Investor (the Asset Managers), from trading restrictions imposed upon issuer-restricted persons by section 2.2 of the Rule, and exempting BMO Nesbitt from certain trading restrictions imposed upon dealer-restricted persons by section 2.1(a) of the Rule;

AND UPON considering the Application and the recommendation of staff of the Ontario Securities Commission (the Commission);

AND UPON the Bank, each of the Asset Managers and BMO Nesbitt having represented to the Director that:

1. The Bank is a Schedule I bank under the Bank Act (Canada).

2. BMO Nesbitt is a corporation incorporated under the laws of Canada. Its head office is located in Toronto, Ontario. It is registered as an investment dealer in all provinces and territories of Canada, as a futures commission merchant in Ontario and Manitoba and as an investment fund manager in Ontario and is a member of the IIROC and the TSX Venture Exchange, an approved participant of the Montreal Exchange and a participating organization of The Toronto Stock Exchange (TSX).

3. BMO Asset Management is incorporated under the laws of the Province of Ontario and has its head office in Toronto, Ontario. It is registered as a portfolio manager and exempt market dealer under the securities legislation of all provinces and territories of Canada and a commodity trading manager and investment fund manager in Ontario.

4. BMO Harris is incorporated under the laws of Canada and has its head office in Toronto, Ontario. It is registered as a portfolio manager and exempt market dealer under the securities legislation of all provinces and territories of Canada, a derivatives portfolio manager in Quebec, and a commodity trading manager, a commodity trading counsel and an investment fund manager in Ontario.

5. Pyrford is incorporated under the laws of the United Kingdom and has its head office in London, UK. It is registered as a portfolio manager in Alberta, British Columbia, Manitoba, Ontario and Quebec and an exempt market dealer in Ontario and Quebec.

6. Harris Investment is incorporated under the laws of the State of Delaware and has its head office in Chicago, Illinois. It is registered as a portfolio manager in British Columbia, Manitoba and Ontario and as a commodity trading manager in Ontario.

7. HIM Monegy is incorporated under the laws of Canada and has its head office in Toronto, Ontario. It is registered as a portfolio manager in Alberta and Ontario and as an exempt market dealer in Ontario.

8. Harris NA is registered as a national bank in the United States and has its head office in Chicago, Illinois.

9. Harris Bank is registered as a national bank in the United States and has its head office in Chicago, Illinois.

10. SBSB is registered as a registered investment advisor with the U.S. Securities and Exchange Commission (SEC) and has its head office in McLean, Virginia.

11. Stoker is registered as a registered investment advisor with the SEC and has its head office in Scottsdale, Arizona.

12. Harris LLC is registered as a registered investment advisor with the SEC and has its head office in Chicago, Illinois.

13. Harris Investor is registered as a portfolio manager in Ontario and British Columbia. Harris Investor is also registered as a registered investment advisor with the SEC, is a member of Financial Industry Regulatory Authority (FINRA) and has its head office in Chicago, Illinois.

14. Each of the Asset Managers manages accounts on behalf of clients at arm's length to the Bank and its affiliates who have granted the Asset Manager discretionary investment authority over the assets in the clients' accounts (including clients' accounts that are pooled investment funds) (Managed Accounts) and who have provided the Asset Managers with express written consent to exercise such discretionary investment authority to purchase Shares on behalf of the Managed Accounts (Authorized Managed Accounts).

15. Each of BMO Nesbitt, BMO Asset Management, BMO Harris, Harris Investment, HIM Monegy and Pyrford (individually, a BMO Fund Manager and collectively the BMO Fund Managers) is the manager of investment funds that have an Independent Review Committee that has approved the purchase of common shares of the Bank (Shares) by the investment funds, in the ordinary course (which would include the time period that would fall during the Restricted Period) in accordance with either section 6.2 of National Instrument 81-107 Independent Review Committee for Investment Funds or the terms and conditions of an exemption that has been granted by the Commission (each an Authorized BMO Fund);

16. The Bank and its subsidiaries sponsor: (i) Employee Share Ownership Plan (BMO ESOP) for employees of the Bank and its subsidiaries living and working in Canada or expatriates who continue to be on the Canadian payroll, (ii) Employee Share Ownership Plan (Nesbitt ESOP) for employees of BMO Nesbitt and its subsidiaries living and working in Canada or expatriates who continue to be on the Canadian payroll, (iii) Qualified Employee Share Purchase Plan (QESPP) for employees of certain of the Bank's subsidiaries, (iv) Non-Qualified Employee Share Purchase Plan (NQESPP) for employees of the Bank resident in the United States, and (v) All Employee Share Ownership Plan (UK ESOP) for employees of the Bank or a subsidiary of the Bank that are subject to income tax in the United Kingdom, in each case, a voluntary savings program available to the employees of the Bank and its affiliates including, without limitation, insiders of the Bank who are participants in the Employee Plans (the Participating Insiders).

17. As the sponsor of the BMO ESOP, Nesbitt ESOP, QESPP or NQESPP (collectively, the Employee Plans), the Bank and its subsidiaries pay all administration fees associated with the Employee Plans. All Share purchases on behalf of the Employee Plans (other than share purchases under the QESPP and the NQESPP) and their participants are made through BMO Nesbitt.

18. Each of the Employee Plans is an automatic securities purchase plan for purposes of Part 5 of National Instrument 55- 104 Insider Reporting Requirements and Exemptions.

19. The Bank and Marshall & Ilsley Corporation (M&I) have entered into an Agreement and Plan of Merger (the Merger Agreement) pursuant to which M&I will be acquired by the Bank. Pursuant to the Merger Agreement, a newly-formed wholly-owned indirect subsidiary of the Bank (Merger Sub) will merge with and into M&I with Merger Sub surviving the merger.

20. Under the Merger Agreement, each share of M&I common stock issued and outstanding immediately prior to the completion of the Bank's acquisition of M&I (the Proposed Acquisition), except for certain specified shares of M&I common stock held by the Bank, Merger Sub or M&I, will be converted into the right to receive 0.1257 common shares of the Bank. If the number of common shares or shares of common stock of M&I changes before the Proposed Acquisition is completed because of a reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split, or other similar event, then an appropriate and proportionate adjustment will be made to the number of Bank's common shares into which each share of M&I common stock will be converted. As of December 31, 2010, there were 528,677,001 shares of M&I common stock issued and outstanding. Based on this number of shares of M&I common stock, the Bank expects to issue approximately 66,454,699 common shares in connection with the Proposed Acquisition (the Merger Distribution).

21. The Proposed Acquisition is subject to the approval of M&I's shareholders.

22. BMO Nesbitt has been appointed by the Bank as one of Bank's advisors in respect of the Proposed Acquisition and its compensation for such services is dependant upon the outcome of the Proposed Acquisition.

23. The Shares that are to be delivered to the shareholders of M&I pursuant to the Merger Agreement are being registered under the Securities Act of 1933 pursuant to a registration statement on Form F-4 that has been filed with the SEC. M&I proposes to mail a proxy statement/prospectus (the Proxy Statement) to its shareholders as soon as practicable following the declaration of the Form F-4's effectiveness. The meeting of M&I's shareholders that is being held to consider the Proposed Acquisition will be convened within a few days following the date of the mailing.

24. As a result of the Merger Distribution, each of the Asset Managers and BMO Nesbitt is an issuer-restricted person, and BMO Nesbitt is also a dealer-restricted person, for purposes of the Rule.

25. As an issuer-restricted person, each of the Asset Managers and BMO Fund Managers is subject to trading restrictions (the Trading Restrictions) that prohibit it from purchasing Shares for either its own account or for any account over which it exercises control or direction during the issuer-restricted period applicable to the Merger Distribution (the Restricted Period).

26. The Restricted Period will begin on the date of dissemination of the Proxy Statement and end on the date on which the Proposed Acquisition is approved by the shareholders of M&I or the Proposed Acquisition is terminated.

27. The Shares meet the requirements in the Rule to be considered a "highly-liquid security".

28. As a dealer-restricted person, BMO Nesbitt is exempt from the Trading Restrictions because the Shares are highly-liquid securities.

29. As a dealer-restricted person, BMO Nesbitt is prohibited from purchasing Shares for an account which BMO Nesbitt knows, or reasonably ought to know, is an account of an issuer-restricted person.

30. In the absence of an exemption from the Trading Restrictions that has been sought on behalf of the Asset Managers pursuant to the Application, each Asset Manager would be unable to purchase Shares during the Restricted Period on behalf of Authorized Managed Accounts.

31. In the absence of an exemption from the Trading Restrictions that has been sought on behalf of BMO Fund Managers pursuant to the Application, each BMO Fund Manager will be unable to purchase Shares on behalf of Authorized BMO Funds throughout the Restricted Period.

32. In the absence of the exemptions sought by the Asset Managers pursuant the Application, each Asset Manager would be precluded from discharging its fiduciary obligation to its Authorized Managed Accounts, and each BMO Fund Manager would be precluded from discharging its fiduciary obligation to the Authorized BMO Funds, in accordance with their investment objectives throughout the Restricted Period even though the Shares are highly-liquid securities.

33. In the absence of the exemption from the Trading Restrictions that has been sought on behalf of the Participating Insiders, a Participating Insider would be unable to purchase Shares in accordance with the terms and conditions of the applicable Employee Plan during the Restricted Period.

34. Although BMO Nesbitt will be able to purchase Shares for its own account or for accounts over which it exercises control or direction throughout the Restricted Period in reliance upon the exemption for highly-liquid securities that is available pursuant to section 3.1(1)(b) of the Rule, it will be unable to purchase Shares on behalf of Participating Insiders during the Restricted Period in the absence of an exemption from section 2.1(a) of the Rule.

AND UPON the Director being satisfied that to do so would not be prejudicial to the public interest;

IT IS THE DECISION of the Director pursuant to section 5.1 of the Rule that for purposes of the Proposed Acquisition, the following are exempt from section 2.2 of the Rule:

(a) purchases of Shares by an Asset Manager on behalf of an Authorized Managed Account;

(b) purchases of Shares by a BMO Fund Manager on behalf of an Authorized BMO Fund; and

(c) purchases of Shares in accordance with the terms and conditions of Employee Plans (other than share purchases under the QESPP and the NQESPP) made by Participating Insiders or by BMO Nesbitt on behalf of Participating Insiders.

IT IS ALSO THE DECISION of the Director pursuant to section 5.1 of the Rule that for the purposes of the Proposed Acquisition, BMO Nesbitt is exempt from section 2.1(a) of the Rule in respect of any purchases of Shares on behalf of a Participating Insider when it is purchasing shares in accordance with the terms and conditions of an Employee Plan (other than share purchases under the QESPP and the NQESPP).

March 29, 2011