Bayles, Catharine & 1033764 Ontario Limited - ss. 74(1)

Ruling

 

IN THE MATTER OF

THE SECURITIES ACT
R.S.O. 1990, CHAPTER S.5, AS AMENDED (THE "ACT")

AND

IN THE MATTER OF

CATHARINE BAYLES AND 1033764 ONTARIO LIMITED

RULING

(Subsection 74(1) of the Act)

      UPON the application (the "Application") of Catharine Bayles ("Bayles") and 1033764 Ontario Limited ("Ontarioco") (collectively, the "Applicant") to the Ontario Securities Commission (the "Commission") for a ruling pursuant to subsection 74(1) of the Act that certain trades in common shares ("Shares") in the capital of The Toronto Stock Exchange Inc. (the "Issuer") by MMI Group Inc. ("MMI") to the Applicant shall not be subject to sections 25 or 53 of the Act;

      AND UPON considering the Application and the recommendation of staff of the Commission;

      AND UPON the Applicant representing to the Commission that:

1. The Issuer was continued under the laws of the province of Ontario on April 3, 2000 (the "Demutualization").

2. The Issuer is not a reporting issuer under the Act.

3. On Demutualization, member firms of the Issuer, which term includes the predecessor entity of the Issuer, exchanged each seat that they held for 20 Shares of the Issuer to become its initial shareholders.

4. MMI is a member of the Investment Dealers Association of Canada ("IDA") and is registered in the category of broker/investment dealer – equities, options, managed accounts.

5. MMI was a member corporation of the Issuer that, on Demutualization, exchanged the seat it held for 20 Shares of the Issuer.

6. Bayles is a former principal of MMI who held shares in MMI through Ontarioco, a private company incorporated under the laws of the province of Ontario and wholly-owned by Bayles.

7. Bayles is a sophisticated investor whose investment qualifications and activities have been reviewed by the IDA in connection with her work at MMI.

8. The Applicant sold its interest in MMI to the two remaining principals on November 21, 2000 (the "Share Sale"). Bayles remains as a Vice President and an employee of MMI.

9. In connection with the Share Sale, the three principals of MMI wish to transfer six of MMI’s 20 Shares of the Issuer obtained on Demutualization directly to Ontarioco (the "Proposed Transfer").

10. Share ownership in the Issuer is constrained in that no person or persons acting jointly or in concert are permitted to beneficially own or control more than 5% of the outstanding Shares unless the prior consent of the Commission is obtained.

11. The Issuer currently has 2,660 Shares outstanding.

12. The Proposed Transfer would result in the Applicant owning approximately 0.23% of the outstanding Shares of the Issuer.

13. The Articles of Continuance of the Issuer provide that for two years after the date of continuance Shares of the Issuer cannot be transferred unless the consent of the board of directors of the Issuer or the consent of a majority of the Issuer’s shareholders is obtained.

14. The board of directors of the Issuer approved the Proposed Transfer on December 12, 2000.

      AND UPON the Commission being satisfied that to do so would not be prejudicial to the public interest;
(a) IT IS RULED, pursuant to section 74(1) of the Act that the Proposed Transfer is not subject to section 25 or 53 of the Act, provided that the first trade of such Shares is made in accordance with the provisions of subsection 72(4) of the Act, as if such Shares had been acquired pursuant to an exemption referred to in subsection 72(4) of the Act.
April 6, 2001.

"H.I. Wetston"      "D. Brown"