Securities Law & Instruments

Headnote

Mutual Reliance Review System for Exemptive Relief Applications - Issuer is a"connected issuer'', but not a ''related issuer'', of registrants that are to act asunderwriters in a proposed distribution of notes of the Issuer - Issuer is not a ''specifiedparty'' as defined in Draft Multi-Jurisdictional Instrument 33-105 Underwriting Conflicts -Registrant underwriters exempted from independent-underwriter requirements,provided that, at the time of the distribution, issuer is not a "specified party" as definedin the Instrument, and, in the case of each registrant, is not a "related issuer".

Applicable Ontario Statutes

Securities Act, R.S.O. 1990, c. S.5, as am.

Applicable Ontario Regulation

Regulation made under the Securities Act, R.R.O. 1990, Reg. 1015, as am., ss. 219(1),224(1)(b), 233, Part XIII.

Applicable Ontario Rules

In the Matter of the Limitations on a Registrant Underwriting Securities of Related Issueror Connected Issuer of the Registrant, (1997), 20 OSCB. 1217, as varied by (1999), 22OSCB 149.


IN THE MATTER OF THE SECURITIES LEGISLATION OF ONTARIO, BRITISH COLUMBIA, ALBERTA, QUEBECAND NEWFOUNDLAND

AND

IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF
SCOTIA CAPITAL INC., CIBC WORLD MARKETS INC.,
RBC DOMINION SECURITIES INC.,TD SECURITIES INC.


AND

NOVA CHEMICALS CORPORATION

MRRS DECISION DOCUMENT


WHEREAS the Canadian securities regulatory authority or regulator (the "DecisionMaker") in each of Ontario, British Columbia, Alberta, Quebec and Newfoundland (the"Jurisdictions") has received an application from Scotia Capital Inc. ("Scotia Capital"),CIBC World Markets Inc. ("CIBC), RBC Dominion Securities Inc. ("RBCDS") and TDSecurities Inc. ("TD Securities") (collectively, the "Filers") for a decision, pursuant to thesecurities legislation of the Jurisdictions (the "Legislation"), that the requirement (the"Independent Underwriter Requirement") contained in the Legislation which prohibits aregistrant from acting as underwriter in connection with a distribution of securities of anissuer, made by means of a prospectus, where the issuer is a "related issuer" (or theequivalent) of the registrant, or, in connection with the distribution, a "connected issuer"(or the equivalent) of the registrant without certain required participation in the distributionby one or more other registrants, in respect of which the issuer is neither a related issuer(or the equivalent) of the registrant, nor, in connection with the distribution, a connectedissuer (or the equivalent) of the registrant, shall not apply to the Filers in respect of aproposed distribution (the "Offering") of Senior Notes (the "Notes") of NOVA ChemicalsCorporation (the "Issuer") pursuant to a short form prospectus (the "Prospectus") expectedto be filed with the securities regulatory authority or regulator (the "Securities Regulators")in each of the provinces and territories of Canada;

AND WHEREAS pursuant to the Mutual Reliance Review System for ExemptiveRelief Applications (the "System"), the Ontario Securities Commission (the "OSC") is theprincipal regulator for this application;

AND WHEREAS the Filers have represented to the Decision Makers that:

1. Each of the Filers is registered as a dealer under the Legislation of each of theJurisdictions. The head office of each of the Filers is in Ontario.

2. The Issuer, a corporation amalgamated under the laws of Alberta, is a reportingissuer under the Legislation of each Jurisdiction and is not, to the knowledge of anyof the Filers, in default of any requirements of the Legislation.

3. The principal business of the Issuer is the production and marketing ofpetrochemicals.

4. The common shares of the Issuer are listed and posted for trading on The TorontoStock Exchange and the New York Stock Exchange.

5. The Issuer has, in connection with the Offering, filed a preliminary short formprospectus dated August 11, 2000 (the "Preliminary Prospectus") with theSecurities Regulators.

6. The Filers and Merrill Lynch Canada Inc. (the ''Independent Underwriter") areproposing to act as underwriters in connection with the Offering. The Issuer isneither a "related issuer", nor, in connection with the Offering, a "connected issuer"(or the equivalent), of the Independent Underwriter, for the purposes of theLegislation. In connection with the underwriting, the proportionate share of theOffering underwritten by the Independent Underwriter and each of the Filers isexpected to be as follows:

Underwriter Proportionate Share
Merrill Lynch Canada Inc. 30 per cent
Scotia Capital 25 per cent
RBCDS 15 per cent
TD Securities 15 per cent
CIBC 15 per cent

7. The Issuer maintains a credit facility (the "Credit Facility") of up to CDN $750 millionwith a syndicate of Canadian banks, including, but not limited to: The Bank of NovaScotia, Royal Bank of Canada, The Toronto-Dominion Bank and the CanadianImperial Bank of Commerce (collectively, the "Lenders"). The Credit Facilityprovides for unsecured borrowings at floating rates under a revolving credit linewith 364-day renewable revolving periods. As at June 30, 2000, the Issuer hadborrowings of approximately CDN $496 million outstanding under the CreditFacility. The Issuer has confirmed to the Filers that it is in compliance with theterms of the Credit Facility.

8. The Issuer also maintains a term facility (the "Term Facility", together with theCredit Facility, the "Loan Facilities") of up to CDN $126 million with a syndicate ofCanadian banks, including, but not limited to, the Lenders. The Term Facilityprovides for unsecured borrowing and matures on June 30, 2004. As at June 30,2000, the Issuer had borrowings of approximately CDN $87 million outstandingunder the Term Facility. The Issuer has confirmed to the Filers that it is incompliance with the terms of the Term Facility.

9. It is intended that the net proceeds from the sale of the Notes comprising theOffering will be used, indirectly, to repay the U.S. $150 million aggregate principalamount due on September 22, 2000 in respect of 6½ per cent Notes (the "6½%Notes") issued by the Issuer. Prior to such repayment of the 6½% Notes, the Issuerintends to use the net proceeds to repay indebtedness owing under the CreditFacility, with the Credit Facility to be subsequently redrawn in an amount necessaryto allow the Issuer to effect the repayment of the 6½% Notes. It is intended that anynet proceeds in excess of the amount required to repay the 6½% Notes will be usedto repay indebtedness under the Credit Facility or for general corporate purposes.

10. Scotia Capital is a wholly-owned subsidiary of The Bank of Nova Scotia. CIBC isa wholly-owned subsidiary of the Canadian Imperial Bank of Commerce. RBCDSis a wholly-owned subsidiary of Royal Bank of Canada. TD Securities is a wholly-owned subsidiary of The Toronto-Dominion Bank.

11. By virtue of the Loan Facilities, the Issuer may, in connection with the Offering, beconsidered a "connected issuer" (or the equivalent) of each of the Filers, for thepurposes of the Legislation.

12. The Issuer is not a related issuer (or the equivalent) of any of the Filers, for thepurposes of the Legislation.

13. The nature of the relationship among the Issuer, the Lenders and the Filers hasbeen described in the Preliminary Prospectus and will be described in theProspectus.

14. The Lenders have not participated, and will not participate, in the decision to makethe Offering or in the determination of its terms.

15. The Filers will not benefit in any manner from the Offering other than the paymentof their underwriting fees in connection with the Offering.

16. The Prospectus will contain the information specified in Appendix "C" of draft Multi-Jurisdictional Instrument 33-105 Underwriting Conflicts (the ''Draft Instrument 33-105"), on the basis that the Issuer is a "connected issuer" of the Filer, as such termis defined in Draft Instrument 33-105.

17. The Issuer is in good financial condition, is not in financial difficulty, and is notunder any immediate financial pressure to proceed with the Offering and has notbeen requested or required by the Lenders to repay the amounts owing under theLoan Facilities. The Issuer is not a "specified party" as defined in Draft Instrument33-105.

AND WHEREAS pursuant to the System this MRRS Decision Document evidencesthe decision of each Decision Maker (collectively, the "Decision");

AND WHEREAS each of the Decision Makers is satisfied that the test contained inthe Legislation that provides the Decision Maker with the jurisdiction to make the Decisionhas been met;

THE DECISION of the Decision Makers, pursuant to the Legislation, is that, inconnection with the Offering, the Independent Underwriter Requirement shall not apply toany of the Filers provided that, at the time of the Offering, and in the case of each Filer:

(i) the Issuer is not a ''related issuer'' of the Filer, for the purposes of theLegislation; and

(ii) the Issuer is not a ''specified party'', as such term is defined in DraftInstrument 33-105.

August 21st, 2000.

"J. A. Geller"      "J. F. Howard"