Sixty Split Corp. - MRRS Decision
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
ONTARIO, BRITISH COLUMBIA, ALBERTA, SASKATCHEWAN,
MANITOBA, QUEBEC, NOVA SCOTIA AND NEWFOUNDLAND
AND
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS
AND
IN THE MATTER OF
SIXTY SPLIT CORP.
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatory authority or regulator (the "Decision Maker") in each of Ontario, BritishColumbia, Alberta, Saskatchewan, Manitoba, Quebec, Nova Scotia, and Newfoundland (the "Jurisdictions") has receivedan application from Sixty Split Corp. (the "Issuer") for a decision under the securities legislation (the "Legislation") of theJurisdictions that the Issuer be exempted from filing and distributing annual financial statements and an annual report,where applicable, for its fiscal year ended March 15, 2001, as would otherwise be required pursuant to applicableLegislation;
AND WHEREAS pursuant to the Mutual Reliance Review System for Exemptive Relief Applications (the"System"), Ontario is the principal regulator for this application;
AND WHEREAS the Issuer has represented to the Decision Maker that:
1. The Issuer filed a final prospectus dated March 5, 2001 (the "Prospectus") with the securities regulatoryauthority in each of the Provinces of Canada pursuant to which a distribution of 15,000,000 class A capitalshares (the "Capital Shares") and 7,500,000 class A preferred shares (the "Preferred Shares") of the Issuer wascompleted on March 12, 2001.
2. The Issuer was incorporated under the laws of the Province of Ontario on January 30, 2001. The fiscal yearend of the Issuer is March 15, with the first fiscal year end occurring on March 15, 2001. The final redemptionof the publicly held shares of the Issuer is scheduled to occur on March 15, 2011.
3. The head office of the Issuer is in Ontario.
4. The authorized capital of the Issuer consists of an unlimited number of Capital Shares, of which 15,000,000are issued and outstanding, an unlimited number of Preferred Shares, of which 7,500,000 are issued andoutstanding, an unlimited number of class B, class C, class D and class E capital shares, issuable in series,none of which are issued and outstanding, an unlimited number of class B, class C, class D and class Epreferred shares, issuable in series, none of which are issued and outstanding, and an unlimited number ofclass J voting shares (the "Class J Shares"), of which 100 are issued and outstanding. The attributes of theCapital Shares and the Preferred Shares are described in the Prospectus under "Description of Share Capital".
5. The Class J Shares are the only class of voting securities of the Issuer. Scotia Capital Inc. ("Scotia Capital")owns 50 of the issued and outstanding Class J Shares and Sixty Split Holdings Corp. owns the remainingissued and outstanding Class J Shares. Two employees of Scotia Capital each own 50% of the commonshares of Sixty Split Holdings Corp. Scotia Capital acted as an agent for, and was the promoter of, the Issuerin respect of the offering of the Capital Shares and the Preferred Shares.
6. The principal undertaking of Issuer is the holding of a portfolio of common shares (the "Portfolio Shares") of thecompanies that make up the S&P/TSE 60 Index in order to generate distributions for the holders of PreferredShares and to enable the holders of Capital Shares to participate in capital appreciation in the Portfolio Shares.The operations of the Issuer commenced on or about February 27, 2001 at which time it began to acquire thePortfolio Shares now held by it. The Portfolio Shares held by the Issuer will only be disposed of as describedin the Prospectus.
7. The Prospectus included an audited balance sheet of the Issuer as at March 5, 2001 and an unaudited proforma balance sheet prepared on the basis of the completion of the sale and issue of Capital Shares andPreferred Shares of the Issuer. As such, the financial position of the Issuer as at March 15, 2001 will have beensubstantially reflected in the pro forma financial statements contained in the Prospectus as the financial positionof the Issuer is not materially different from the pro forma financial statements of the Issuer contained in theProspectus. Furthermore, no material acquisition or disposition of shares has occurred during the period fromthe date the Portfolio Shares were acquired to March 15, 2001.
8. The Issuer is an inactive company, the sole purpose of which is to provide a vehicle through which differentinvestment objectives with respect to participation in the Portfolio Shares may be satisfied. Holders of CapitalShares will be entitled on redemption to the benefits of any capital appreciation in the market price of thePortfolio Shares after payment of administrative and operating expenses of the Issuer and the fixed distributionson the Preferred Shares, and holders of Preferred Shares will be entitled to receive fixed cumulative preferentialdistributions on a quarterly basis equal to $0.3563 per Preferred Share.
9. The benefit to be derived by the security holders of the Issuer from receiving an annual report, whereapplicable, and financial statements for the fiscal year ended March 15, 2001 would be minimal in view of theextremely short period from the date of the Prospectus to its fiscal year end and given the nature of the minimalbusiness carried on by the Issuer.
10. The expense to the Issuer of preparing, filing and sending to its security holders an annual report, whereapplicable and financial statements for the fiscal year ended March 15, 2001 would not be justified in view ofthe benefit to be derived by the security holders from receiving such statements.
11. The interim unaudited financial statements of the Issuer for the period ending September 15, 2001 and theannual audited financial statements and the annual report, where applicable, for the period ending March 15,2002 will include the period from March 5, 2001 to March 15, 2001.
AND WHEREAS pursuant to the System, this MRRS Decision Document evidences the decision of eachDecision Maker (collectively, the "Decision");
AND WHEREAS each of the Decision Makers is satisfied that the test contained in the Legislation that providesthe Decision Maker with the jurisdiction to make the Decision has been met;
IT IS HEREBY DECIDED by the Decision Makers pursuant to the Legislation that the Issuer is exempted fromfiling and distributing an annual report, where applicable, and annual financial statements for its fiscal year ended March15, 2001, provided that the interim unaudited financial statements of the Issuer for the period ending September 15, 2001and the annual audited financial statements and the annual report, where applicable, for the period ending March 15,2002 will include the period from March 5, 2001 to March 15, 2001.
April 19, 2001.
"Howard I. Weston" "Paul Moore"