Toronto-Dominion Bank and TD Capital Trust IV

Headnote

MI 11-102 and NP 11-203 -- capital trust established by bank to issue trust subordinated notes as cost-effective means of raising capital for Canadian bank regulatory purposes exempted from eligibility requirements to file a short form prospectus, certain form requirements and permitted to abridge 10-day notice requirement -- relief granted as disclosure regarding the bank is more relevant and bank has been reporting issuer for many years -- relief subject to conditions -- National Instrument 44-101 Short Form Prospectus Distributions -- relief also granted for temporary confidentiality of decision.

Applicable Legislative Provisions

National Instrument 44-101 Short Form Prospectus Distributions, ss. 2.3, 2.8.

Form 44-101F1 Short Form Prospectus, items 6 and 11.

December 29, 2008

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO

(the "Jurisdiction")

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

THE TORONTO-DOMINION BANK (the "Bank") AND

TD CAPITAL TRUST IV (the "Trust" and, together

with the Bank, the "Filers")

DECISION

Background

The principal regulator in the Jurisdiction has received an application (the "Application") from the Filers for a decision (the "Requested Relief") under the securities legislation of the Jurisdiction of the principal regulator (the "Legislation") that:

A. the Trust be exempted from the following requirements of the Legislation in connection with offerings by the Trust from time to time of Notes (as defined herein):

(i) the qualification requirements (the "Qualification Requirements") of Part 2 of National Instrument 44-101 Short Form Prospectus Distributions ("NI 44-101"), such that the Trust is qualified to file a prospectus in the form of a short form prospectus; and

(ii) the disclosure requirements (the "Disclosure Requirements") in Item 6 (Earnings Coverage Ratios) and Item 11 (Documents Incorporated by Reference), with the exception of Item 11.1(1)(5), of Form 44-101F1 of NI 44-101 ("Form 44-101F1") in respect of the Trust, as applicable; and

B. the Application and this decision document be held in confidence by the principal regulator, subject to certain conditions.

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):

(a) the Ontario Securities Commission is the principal regulator for this application; and

(b) the Filers have provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System ("MI 11-102") is intended to be relied upon in each of the provinces and territories of Canada other than Ontario.

Interpretation

The terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined herein.

"Bank Act" means the Bank Act (Canada); and

"Tax Act" means the Income Tax Act (Canada).

Representations

This decision is based on the following facts represented by the Filers:

The Bank

1. The Bank is a Schedule 1 chartered bank subject to the provisions of the Bank Act. The head office of the Bank is located at P.O. Box 1, Toronto-Dominion Centre, Toronto, Ontario M5K 1A2.

2. The authorized share capital of the Bank consists of an unlimited number of: (i) common shares ("Bank Common Shares"); and (ii) Class A First Preferred Shares ("Bank Preferred Shares"), issuable in series.

3. The Bank Common Shares are listed and posted for trading on the Toronto Stock Exchange and the New York Stock Exchange.

4. The Bank is a reporting issuer in each province and territory of Canada and is not, to the best of its knowledge, in default of any requirement of the securities legislation in such jurisdictions.

5. The Bank is qualified to use the short form prospectus system provided under NI 44-101.

The Trust

6. The Trust will be a trust established under the laws of the Province of Ontario pursuant to a declaration of trust, prior to the filing of a preliminary prospectus by the Trust.

7. The Trust is proposing to conduct an initial public offering (the "Offering") of one or more series of subordinated notes (the "Notes") in each of the provinces and territories of Canada and may, from time to time, issue further series of Notes. It is currently anticipated that the first series of Notes will be designated as TD Capital Trust IV Notes -- Series 2009-1 ("TD CaTS IV Notes -- Series 2009-1"). As a result of the Offering, the capital of the Trust will consist of the Notes issued pursuant to the Offering and voting trust units, issuable in series (the "Voting Trust Units" and, collectively with the Notes, the "Trust Securities"). All of the Voting Trust Units will be held, directly or indirectly, by the Bank.

8. The Trust will be established for the purpose of effecting offerings of Trust Securities in order to provide the Bank with a cost-effective means of raising capital for Canadian bank regulatory purposes by means of: (i) offering Notes to the public from time to time; and (ii) acquiring and holding assets, which will consist primarily of one or more senior deposit notes of the Bank (the "Trust Assets"). The Trust Assets will generate income for distribution to holders of Trust Securities. The Trust will not carry on any operating activity other than in connection with offerings of Trust Securities and in connection with the Trust Assets.

9. The Trust is not currently a reporting issuer in any province or territory of Canada. As a result of the Offering, it is anticipated that the Trust will become a reporting issuer in each of the provinces and territories of Canada.

TD CaTS IV Notes -- Series 2009-1

10. The TD CaTS IV Notes - Series 2009-1 will pay a fixed rate of interest on such date(s) (each, an "Interest Payment Date") as may be described in the prospectus for the Offering (the "Prospectus") until such date as described in the Prospectus, following which the interest will be reset every 5 years (each such interest reset date, an "Interest Reset Date") until maturity at a Government of Canada Yield (as defined in the Prospectus) plus a spread to be described in the Prospectus.

11. Under an agreement to be entered into among the Bank, the Trust and a party acting as trustee, the Bank will agree, for the benefit of the holders of TD CaTS IV Notes - Series 2009-1, that in the event that (i) the Bank elects prior to the commencement of the interest period for the TD CaTS IV Notes - Series 2009-1 ending on the day preceding the relevant Interest Payment Date to require holders of TD CaTS IV Notes - Series 2009-1 to invest interest paid thereon on such Interest Payment Date in a new series of Bank Deferral Preferred Shares (as defined below); or (ii) for whatever reason, interest is not paid in full in cash on the TD CaTS IV Notes-Series 2009-1 on any Interest Payment Date (or the next following business day if the relevant Interest Payment Date is not a business day), the Bank will not declare dividends of any kind on any Bank Preferred Shares or, failing any Bank Preferred Shares being outstanding, on all of the Bank Common Shares (collectively, the "Dividend Restricted Shares") until a period of time specified in the Prospectus has elapsed (the "Dividend Stopper Undertaking"). Accordingly, it is in the interest of the Bank to ensure, to the extent within its control, that the Trust complies with the obligation to pay the interest in cash on each Interest Payment Date so as to avoid triggering the Dividend Stopper Undertaking.

12. The TD CaTS IV Notes -- Series 2009-1 will be automatically exchanged, without the consent of the holder, for a new series of newly-issued Bank Preferred Shares upon the occurrence of certain stated events relating to the solvency of the Bank or actions taken by the Superintendent of Financial Institutions (the "Superintendent") in respect of the Bank.

13. The Trust may, subject to regulatory approval, at its option, on a date to be described in the Prospectus not prior to five years following the date of issuance of the TD CaTS IV Notes - Series 2009-1, redeem the TD CaTS IV Notes - Series 2009-1 without the consent of the holders thereof. The price payable per $1,000 principal amount of TD CaTS IV Notes - Series 2009-1 so redeemed will be: (i) par, if redeemed on an Interest Reset Date; and (ii) the greater of par and a Canada Yield Price to be described in the Prospectus if redeemed on a day other than an Interest Reset Date, together, in each case, with accrued and unpaid interest to, but excluding, the date fixed for redemption (in either case, the "Redemption Price").

14. Upon the occurrence of certain regulatory or tax events affecting the Bank or the Trust (each a "Special Event"), the Trust may, at its option, without the consent of holders of the TD CaTS IV Notes - Series 2009-1 but subject to regulatory approval, redeem all but not less than all of the TD CaTS IV Notes - Series 2009-1 at a price equal to par plus accrued and unpaid interest to, but excluding, the date fixed for redemption.

15. The Bank will covenant that it will maintain direct or indirect ownership of 100% of the outstanding Voting Trust Units. Subject to regulatory approval, the TD CaTS IV Notes -- Series 2009-1 will constitute Tier 1 capital of the Bank.

16. As long as any TD CaTS IV Notes - Series 2009-1 are outstanding and are held by any person other than the Bank, or an affiliate of the Bank, the Trust may only be terminated with the approval of the Bank as the holder, directly or indirectly, of the Voting Trust Units and with the approval of the Superintendent: (i) upon the occurrence of a Special Event prior to a date to be specified in the Prospectus; or (ii) for any reason on one or more dates to be specified in the Prospectus. As long as any TD CaTS IV Notes - Series 2009-1 are outstanding and held by any person other than the Bank, or an affiliate thereof, the Bank will not approve the termination of the Trust unless the Trust has sufficient funds to pay the Redemption Price.

17. On each Interest Payment Date on which a Deferral Event has occurred holders of TD CaTS IV Notes - Series 2009-1 will be required to invest interest paid on the TD CaTS IV Notes - Series 2009-1 in a new series of Bank Preferred Shares (the "Bank Deferral Preferred Shares"). A "Deferral Event" will occur in circumstances where either: (i) the Bank has failed to declare cash dividends on the Dividend Restricted Shares in accordance with ordinary dividend practice in the last 90 days preceding the commencement of the interest period for the TD CaTS IV Notes - Series 2009-1 ending on the day preceding the relevant Interest Payment Date; (ii) for whatever reason, interest is not paid in full in cash on the TD CaTS IV Notes-Series 2009-1 on any Interest Payment Date (or the next following business day if the relevant Interest Payment Date is not a business day); or (iii) the Bank elects prior to the commencement of the interest period ending on the day preceding the relevant Interest Payment Date, that holders of TD CaTS IV Notes-Series 2009-1 invest interest paid on the TD CaTS IV Notes-Series 2009-1 on the relevant Interest Payment Date in Bank Deferral Preferred Shares. All such Bank Deferral Preferred Shares so issued will be held in escrow by a party to be named in the Prospectus on behalf of holders of TD CaTS IV Notes - Series 2009-1 until the next following Interest Payment Date which is not subject to a Deferral Event, upon which such shares will be released from escrow to holders of TD CaTS IV Notes - Series 2009-1, unless an Automatic Exchange, redemption or maturity of the TD CaTS IV Notes - Series 2009-1 shall have occurred prior thereto, in which case the shares will be released upon the Automatic Exchange, redemption or maturity, as the case may be.

18. The TD CaTS IV Notes -- Series 2009-1 will be non-voting and will be unsecured obligations of the Trust ranking at least equally with other subordinated indebtedness of the Trust from time to time issued and outstanding. On a liquidation or winding-up of the Trust, the indebtedness evidenced by the TD CaTS IV Notes -- Series 2009-1 will be subordinate in right of payment to the prior payment in full of all other liabilities of the Trust except liabilities which by their terms rank in right of payment equally with or subordinate to the indebtedness represented by the TD CaTS IV Notes -- Series 2009-1. Apart from the rights to receive the interest described herein, holders of TD CaTS IV Notes -- Series 2009-1 have no further right in the income of the Trust. The holders of TD CaTS IV Notes -- Series 2009-1 will not be entitled to initiate proceedings for the termination of the Trust.

19. Pursuant to an administration and advisory agreement to be entered into between the trustee of the Trust (the "Trustee") and the Bank, the Trustee will delegate to the Bank certain of its duties in relation to the administration of the Trust. The Bank, as administrative agent, will provide advice and counsel with respect to management of the assets of the Trust and other matters as may be requested by the Trustee from time to time and will administer the day-to-day operations of the Trust.

20. The Trust may, from time to time (including pursuant to the Offering), issue further series of Notes which qualify as Tier 1 capital of the Bank for regulatory purposes, the proceeds of which would be used to acquire additional Trust Assets.

21. Because of the terms of the Notes, and the various covenants of the Bank, information about the affairs and financial performance of the Bank, as opposed to that of the Trust, is meaningful to holders of Notes.

22. It is expected that the TD CaTS IV Notes -- Series 2009-1 will receive an approved rating from an approved rating organization, as defined in NI 44-101.

23. At the time of the filing of any prospectus in connection with offerings of Notes (including the Offering):

(i) the prospectus will be prepared in accordance with the short form prospectus requirements of NI 44-101 other than the Disclosure Requirements, except as permitted by the Legislation;

(ii) the Trust will comply with all of the filing requirements and procedures set out in NI 44-101 other than the Qualification Requirements, except as permitted by the Legislation;

(iii) the prospectus will incorporate by reference the documents that would be required to be incorporated by reference under Item 11 of Form 44-101F1 if the Bank were the issuer of such securities;

(iv) the prospectus disclosure required by Item 11 (other than Item 11.1(1)(5)) of Form 44-101F1 in respect of the Trust) will be addressed by incorporating by reference the Bank's public disclosure documents referred to in paragraph 23(iii) above; and

(v) the Bank will satisfy the criteria in section 2.2 of NI 44-101 if the word "issuer" is replaced with "Bank".

Decision

The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.

The decision of the principal regulator under the Legislation is that the Requested Relief is granted provided that:

(i) the Trust and the Bank, as applicable, comply with paragraph 23 above;

(ii) the Bank remains the direct or indirect beneficial owner of all of the outstanding Voting Trust Units;

(iii) the Bank, as holder of the Voting Trust Units, will not propose changes to the terms and conditions of any outstanding Notes offered and sold pursuant to a short form prospectus of the Trust filed under this decision that would result in such Notes being exchangeable for securities other than Bank Preferred Shares;

(iv) the Trust has minimal assets, operations, revenues or cash flows other than those related to the issuance, administration and repayment of the Trust Securities or the administration of the Trust Assets;

(v) the Trust issues a news release and files a material change report in accordance with Part 7 of NI 51-102, as amended, supplemented or replaced from time to time, in respect of any material change in the affairs of the Trust that is not also a material change in the affairs of the Bank;

(vi) the Trust becomes, on or before the filing of a preliminary prospectus in connection with the Offering, and thereafter remains, an electronic filer under NI 13-101;

(vii) following the Offering, the Trust is a reporting issuer in at least one jurisdiction of Canada;

(viii) following the Offering, the Trust files with the securities regulatory authority in each jurisdiction in which it becomes a reporting issuer all periodic and timely disclosure documents that it is required to have filed in that jurisdiction: (a) under all applicable securities legislation; (b) pursuant to an order issued by the securities regulatory authority; or (c) pursuant to an undertaking to the securities regulatory authority;

(ix) the securities to be distributed (a) have received an approved rating on a provisional basis; (b) are not the subject of an announcement by an approved rating organization, of which the issuer is or ought reasonably to be aware, that the approved rating given by the organization may be down-graded to a rating category that would not be an approved rating, and (c) have not received a provisional or final rating lower than an approved rating from any approved rating organization; and

(x) the Trust files a notice of intention pursuant to Section 2.8 of NI 44-101 concurrently with the filing of the Preliminary Prospectus.

The further decision of the principal regulator is that the application of the Filers and this decision shall be held in confidence by the principal regulator until the earlier of (i) the date that a preliminary short form prospectus is filed in respect of the Offering, and (ii) April 30, 2009.