Toronto-Dominion Bank and TD Mortgage Investment Corporation - s. 6.1 of OSC Rule 13-502

Headnote

Issuer exempt from requirement to pay participationfee, subject to conditions.

Ontario Statutes Cited

Ontario Securities Commission Rule 13-502 Fees.

IN THE MATTER OF

ONTARIO SECURITIES COMMISSION

RULE 13-502 FEES

AND

IN THE MATTER OF

THE TORONTO-DOMINION BANKAND

TD MORTGAGE INVESTMENT CORPORATION

ORDER

WHEREAS the Ontario Securities Commission(the OSC) has received an application from The Toronto-DominionBank (TD Bank) and TD Mortgage Investment Corporation(TDMIC) for an order, pursuant to section 6.1 of OSCRule 13-502 Fees (the Fees Rule), that the requirementto pay a participation fee under section 2.2 of the Fees Ruleshall not apply to TDMIC, subject to certain terms and conditions.

AND WHEREAS TD Bank and TDMIC have representedto the OSC that:

1. TDMIC is a corporation governed by theTrust and Loan Companies Act (Canada). It is a subsidiaryof TD Bank and TD Bank acts as advisor to TDMIC pursuant toan Advisory Agreement dated December 4, 1997. TDMIC has afiscal year end of October 31. It is a reporting issuer inOntario and is not, to its knowledge, in default of any requirementunder the securities legislation of Ontario.

2. The outstanding securities of TDMIC consistof (i) 87,600 common shares, and (ii) 350,000 Higher YieldingBank Related Income Derivative Securities, each consistingof one non-cumulative Preferred Share Series A of TDMIC (theHYBRIDS). All of the common shares of TDMIC are heldby TD Bank. TDMIC distributed the HYBRIDS in a public offeringpursuant to a prospectus dated November 27, 1997. The HYBRIDSare listed on the Toronto Stock Exchange. They may be redeemedat par beginning on October 31, 2007.

3. TDMIC is a special purpose issuer, establishedto issue the HYBRIDS, which provide TD Bank with a cost-effectivemeans of raising capital for Canadian financial institutionregulatory purposes. Incidental to the issuance of the HYBRIDS,TDMIC acquires and holds residential first mortgages insuredby Canada Mortgage and Housing Corporation. Such mortgageshave been acquired solely from TD Bank or its affiliates.TDMIC does not and will not carry on any operating activityother than in connection with the issuance of the HYBRIDS.

4. Pursuant to a Mutual Reliance Review Systemfor Exemptive Relief Decision Document dated March 11, 2002(the First Decision Document) granted to TDMIC by theOSC and the other Decision Makers set out therein, such DecisionMakers determined that the requirement contained in the securitieslegislation of the Province of Ontario and the securitieslegislation of the other applicable jurisdictions:

(a) to file interim financial statementsand audited annual financial statements with the DecisionMakers and deliver such statements to the holders of HYBRIDS;

(b) to make an annual filing, where applicable,with the Decision Makers in lieu of filing an informationcircular; and

(c) to file an annual report and an informationcircular with the Decision Maker in Québec and deliversuch report or information circular to holders of HYBRIDSresident in Québec;

shall not apply to TDMIC for so long as thefollowing conditions are satisfied:

(i) TD Bank remains a reporting issuer underthe securities legislation of the Province of Ontario andthe securities legislation of the other applicable jurisdictions;

(ii) TD Bank sends its annual financialstatements, interim financial statements, annual and interimmanagement discussion and analysis to holders of HYBRIDSand its annual report to holders of HYBRIDS resident inthe Province of Québec at the same time and in thesame manner as if the holders of HYBRIDS were holders ofTD Bank common shares;

(iii) all outstanding securities of TDMICare either preferred shares or common shares;

(iv) the rights and obligations of holdersof additional preferred shares in the capital of TDMIC arethe same in all material respects as the rights and obligationsof the holders of HYBRIDS at the date of such First DecisionDocument;

(v) TD Bank or its affiliates are the beneficialowners of all outstanding common shares of TDMIC; and

(vi) provided that, if a material changeoccurs in the affairs of TDMIC, such Decision shall expire30 days after the date of such change.

5. Pursuant to a Mutual Reliance Review Systemfor Exemptive Relief Decision Document dated March 19, 2002(the Second Decision Document) granted to TDMIC bythe OSC and the other Decision Makers set out therein, suchDecision Makers determined that the requirement containedin the securities legislation of the Province of Ontario andthe securities legislation of the other applicable jurisdictionsto prepare and file an annual information form, and whereapplicable, annual and interim management's discussion andanalysis of the financial condition and results of operations(MD&A) and send such MD&A to security holdersof TDMIC, as applicable, shall not apply to TDMIC for so longas the following conditions are satisfied:

(i) TD Bank remains a reporting issuer underthe securities legislation of the Province of Ontario andthe securities legislation of the other applicable jurisdictions;

(ii) TD Bank sends interim and audited annualfinancial statements, and MD&A to holders of HYBRIDSand its annual report to holders of HYBRIDS resident inthe Province of Québec at the same time and in thesame manner as if the holders of HYBRIDS were holders ofTD Bank common shares;

(iii) all outstanding securities of TDMICare either preferred shares or common shares;

(iv) the rights and obligations of holdersof additional preferred shares in the capital of TDMIC arethe same in all material respects as the rights and obligationsof the holders of HYBRIDS at the date of such Second DecisionDocument;

(v) TD Bank or its affiliates are the beneficialowners of all outstanding common shares of TDMIC; and

(vi) provided that, if a material changeoccurs in the affairs of TDMIC, such Decision shall expire30 days after the date of such change.

6. TDMIC was established by TD Bank to complywith regulatory requirements of the Office of the Superintendentof Financial Institutions (OSFI) respecting the issuanceof innovative Tier 1 capital. Innovative instruments, suchas the HYBRIDS, must satisfy the detailed requirements ofOSFI Interim Appendix to Guideline A-2 Principles GoverningInclusion of Innovative Instruments in Tier 1 Capital (theOSFI Guideline), to be included in Tier 1 capital.The OSFI Guideline requires that innovative instruments beissued by a separate special purpose issuer.

7. Issuing innovative instruments, such asthe HYBRIDS, is a cost effective means of raising Tier 1 capitalfor TD Bank. However, the HYBRIDS could not have been issueddirectly under the OSFI Guideline. If TD Bank could have issuedthe HYBRIDS directly, this capital would have been includedin the calculation of the participation fee payable by TDBank. Since TD Bank's capitalization currently exceeds thehighest level for purposes of the participation fee calculation,a direct issuance by TD Bank of the HYBRIDS would not haveincreased the participation fee payable by TD Bank.

8. TDMIC would not be required (but for theFees Rule) to pay any fees related to continuous disclosure.

9. TD Bank will not issue additional securitiesout of TDMIC to the public.

10. TDMIC is a 'Class 2 reporting issuer'under the Fees Rule. Its capitalization as at October 31,2002 was approximately $432.9 million. Accordingly, underthe Fees Rule TDMIC would be required to pay a participationfee of $14,583 for 2003 (7/12ths of $25,000) and a participationfee of $25,000 for each subsequent fiscal year. Assuming theHYBRIDS are redeemed on October 31, 2007, TDMIC would be requiredto pay an aggregate participation fee of $114,583 over itsremaining operational lifetime.

THE ORDER of the OSC under the Fees Ruleis that the requirement to pay a participation fee under section2.2 of the Fees Rule shall not apply to TDMIC, for so long as:

(i) TD Bank and TDMIC continue to satisfyall of the conditions contained in the First Decision Documentand the Second Decision Document;

(ii) TD Bank does not issue further securitiesout of TDMIC, other than common shares issued to TD Bank orto direct or indirect wholly-owned subsidiaries of TD Bank;and

(iii) the capitalization of TDMIC representedby the HYBRIDS is included in the participation fee calculationapplicable to TD Bank.

June 27, 2003.

"John Hughes"