Securities Law & Instruments


Mutual Reliance Review System for Exemptive Relief Applications - issuer is arelated issuer and a connected issuer of a registrant which may act asunderwriter of securities of the issuer - registrant exempted from independentunderwriter requirement in clause 224(1)(b) of Regulation.

Applicable Ontario Statutory Provisions

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

Application Ontario Regulations

Regulation made under the Securities Act, R.R.O. 1990, Reg. 1015, asamended, ss. 219(1), 224(1)(b) and 233.

Applicable Ontario Rules

In the Matter of the Limitations on a Registrant Underwriting Securities of aRelated Issuer or Connected Issuer of the Registrant (1997), 20 OSCB 1217, asvaried by (1999), 22 OSCB 58.

Proposed Instrument Cited

Multi-Jurisdictional Instrument 33-105 Underwriters Conflicts (1998), 21 OSCB781.









WHEREAS the local securities regulatory authority or regulator (the"Decision Maker") in each of British Columbia, Alberta, Ontario, Quebec andNewfoundland (the "Jurisdictions") has received an application from BMO NesbittBurns Inc. (the "Lead Underwriter" or the "Filer") for a decision, pursuant to thesecurities legislation (the "Legislation") of the Jurisdictions, that the requirement(the "Independent Underwriter Requirement") contained in the Legislation, whichprohibits a registrant from acting as underwriter in connection with a distribution ofsecurities of an issuer, made by means of prospectus, where the issuer is a "relatedissuer" (or the equivalent) of the registrant, or, in connection with the distribution,a "connected issuer" (or the equivalent) of the registrant, without certain requiredparticipation in the distribution by an underwriter (an "Independent Underwriter"),in respect of which the issuer is neither a related issuer (or the equivalent) of theregistrant, nor, in connection with the distribution, a connected issuer (or theequivalent) of the registrant, shall not apply to the Filer in respect of the proposedoffer of Trust Capital Securities-Series A ("BMO BOaTS") of BMO Capital Trust (the"Issuer") to be made pursuant to a prospectus;

AND WHEREAS under the Mutual Reliance System for Exemptive ReliefApplications (the "System") the Ontario Securities Commission is the principalregulator for this application;

AND WHEREAS the Lead Underwriter has represented to the DecisionMakers that:

1. The Issuer is a closed-end trust formed under the laws of Ontario by TheTrust Company of the Bank of Montreal (the "Trustee"), a wholly-ownedsubsidiary of the Bank of Montreal (the "Bank").

2. The Issuer proposes to issue and sell to the public transferable trust unitscalled BMO BOaTS. The Issuer will also issue securities called special trustsecurities (the "Special Trust Securities" and, collectively with the BMOBOaTS, the "Trust Securities") to the Bank or affiliates of the Bank. To thatend, a preliminary prospectus qualifying the Offering (the "PreliminaryProspectus") was filed on August 11, 2000 and a final long form prospectus(the "Prospectus") will be filed in all Canadian provinces and territories.

3. The BMO BOaTS are non-voting except in limited circumstances and theSpecial Trust Securities are voting securities. The Bank will covenant for thebenefit of the holders of the BMO BOaTS that, for so long as any BMOBOaTS are outstanding, the Bank will maintain ownership, directly orindirectly, of 100% of the Special Trust Securities.

4. The Issuer will use the proceeds of the issue of the Trust Securities topurchase eligible trust assets consisting primarily of undivided co-ownershipinterests in one or more pools of first mortgages on residential propertyinsured by Canada Mortgage and Housing Corporation or Mortgage-BackedSecurities which will generate income for distribution to holders of TrustSecurities. The Offering will provide investors with the opportunity to invest,through the holding of BMO BOaTS, in the trust assets, and will provide theBank with a cost-effective means of raising capital for Canadian bankregulatory purposes.

5. The Issuer will distribute its Net Distributable Funds (as defined in thePreliminary Prospectus) on the last day of June and December of each yearcommencing December 31, 2000 (each, a "Distribution Date"). On eachDistribution Date, unless the Bank has failed to declare dividends on any ofits preferred shares or, if no such shares are then outstanding, on itscommon shares, a holder of BMO BOaTS will be entitled to receive a non-cumulative fixed cash distribution (the "Indicated Distribution"). In the eventthe Bank fails to pay such dividends, all of the Net Distributable Funds of theIssuer will be payable to the Bank as the sole holder of the Special TrustSecurities and holders of the BMO BOaTS will not receive a distribution.

6. Pursuant to the terms of the Bank Share Exchange Trust Agreement (asdefined in the Preliminary Prospectus), the Bank will covenant for the benefitof holders of BMO BOaTS that if, on any Distribution Date where theIndicated Distribution is payable, the Issuer fails to pay the IndicatedDistribution in full on the BMO BOaTS, the Bank will not declare dividendsof any kind on certain classes of its shares including preferred shares andcommon shares until approximately ten calendar months following suchDistribution Date unless the Issuer first pays such Indicated Distribution (orthe unpaid portion thereof) to holders of BMO BoaTS.

7. In certain circumstances, the BMO BOaTS may be exchanged for preferredshares of the Bank. The Bank is the promoter of the Issuer and the Bank hassigned a certificate page of the Preliminary Prospectus.

8. The Filer will underwrite a portion of the Offering that is larger than any othermember of the underwriting syndicate.

9. The Filer is an indirect wholly-owned subsidiary of the Bank.

10. The Issuer is a "related issuer" (or the equivalent) to the Filer.

11. The nature and details of the relationship between the Issuer, the Filer andthe Bank is described in the Preliminary Prospectus and will be describedin the Prospectus. The information set out in Appendix C of proposed Multi-Jurisdictional Instrument 33-105 will be contained in the Prospectus.

12. The Filer will receive no benefits relating to the Offering other than thepayment of its fees in connection therewith.

13. Except for the Filer, the Issuer is neither a "related issuer" (or theequivalent), nor a "connected issuer" (or the equivalent), of any of the otherunderwriters (the "Independent Underwriters") in connection with theoffering.

14. The Independent Underwriters will underwrite a majority of the Offering, withone of the Independent Underwriters, TD Securities Inc., underwriting atleast 20% of the Offering. TD Securities Inc. will participate in the draftingof the Prospectus, the due diligence relating to the Offering and in thepricing of the Trust Securities. TD Securities Inc.'s participation in theOffering will be disclosed in the Prospectus and TD Securities Inc., the otherIndependent Underwriters, and the Lead Underwriter will sign a certificatein the Prospectus.

AND WHEREAS under the System this MRRS Decision Documentevidences the decision of each Decision Maker (collectively, the "Decision");

AND WHEREAS each of the Decision Makers under the Legislation issatisfied that the test contained in the Legislation that provides the Decision Makerwith the jurisdiction to make the Decision has been met;

THE DECISION of the Decision Makers under the Legislation is that theIndependent Underwriter Requirement shall not apply to the Lead Underwriter inconnection with the Offering, provided that:

(a) TD Securities Inc. participates in the Offering as stated in paragraph14 above; and

(b) The relationship between the Issuer and the Filer is disclosed in theProspectus.

September 27th, 2000.

"J. A. Geller"       "Robert W. Davis"