BMO Capital Trust & BMO Nesbitt Burns Inc.

Headnote

Mutual Reliance Review System for Exemptive Relief Applications - issuer is a related issuer of a registrant which mayact as underwriter of securities of the issuer - registrant exempted from independent underwriter requirement in clause224(1)(b) of Regulation.

Applicable Ontario Statutory Provisions

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

Application Ontario Regulations

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

Proposed Instrument Cited

Multi-Jurisdictional Instrument 33-105 Underwriters Conflicts (1998), 21 OSCB 781.

IN THE MATTER OF

THE SECURITIES LEGISLATION

OF BRITISH COLUMBIA, ONTARIO,

QUEBEC AND NEWFOUNDLAND

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEW

SYSTEM FOR EXEMPTIVE RELIEF

AND

IN THE MATTER OF

BMO CAPITAL TRUST AND

BMO NESBITT BURNS INC.

MRRS DECISION DOCUMENT

WHEREAS the local securities regulatory authority or regulator (the "Decision Maker") in each of BritishColumbia, Alberta, Ontario, Quebec and Newfoundland (the "Jurisdictions") has received an application from BMONesbitt Burns Inc. (the "Lead Underwriter" or the "Filer") for a decision, pursuant to the securities legislation (the"Legislation") of the Jurisdictions, that the requirement (the "Independent Underwriter Requirement") contained in theLegislation, which prohibits a registrant from acting as underwriter in connection with a distribution of securities of anissuer, made by means of prospectus, where the issuer is a "related issuer" (or the equivalent) of the registrant, or, inconnection 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 neithera related issuer (or the equivalent) of the registrant, nor, in connection with the distribution, a connected issuer (or theequivalent) of the registrant, shall not apply to the Filer in respect of the proposed offering (the "Offering") of Trust CapitalSecurities-Series B ("BMO BOaTS - Series B") of BMO Capital Trust (the "Issuer") to be made pursuant to a prospectus;

AND WHEREAS under the Mutual Reliance System for Exemptive Relief Applications (the "System") theOntario Securities Commission is the principal jurisdiction for this application;

AND WHEREAS the Lead Underwriter has represented to the Decision Makers that:

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

2. The Issuer is a reporting issuer under the Legislation of each Jurisdiction and is not in default of anyrequirements of the Legislation.

3. The Issuer proposes to issue and sell to the public a second series of transferable trust units called BMOBOaTS-Series B. The Trust will also issue securities called special trust securities (the "Special TrustSecurities" and, collectively with the BMO BOaTS-Series B, the "Trust Securities") to the Bank or affiliates ofthe Bank. To that end, a preliminary prospectus qualifying the Offering (the "Preliminary Prospectus") was filedon January 24, 2001 and a final long form prospectus (the "Prospectus") will be filed in all Canadian provincesand territories.

4. The first series of transferable trust units, called BMO BOaTS-Series A, was issued by the Trust in an offeringequivalent to the one contemplated under the Preliminary Prospectus above on October 11, 2000. The BMOBOaTS-Series A and BMO BOaTS-Series B are collectively referred to as the "BMO BOaTS".

5. The BMO BOaTS Series-B are non-voting except in limited circumstances and the Special Trust Securities arevoting securities. The Bank will covenant for the benefit of the holders of the BMO BOaTS Series-B that, forso long as any BMO BOaTS Series-B are outstanding, the Bank will maintain ownership, directly or indirectly,of 100% of the Special Trust Securities.

6. The Issuer will use the proceeds of the issue of the Trust Securities to purchase eligible trust assets consistingprimarily of undivided co-ownership interests in one or more pools of first mortgages on residential propertyinsured by Canada Mortgage and Housing Corporation or Mortgage-Backed Securities which will generateincome for distribution to holders of Trust Securities. The Offering will provide investors with the opportunity toinvest, through the holding of BMO BOaTS, in the trust assets, and will provide the Bank with a cost-effectivemeans of raising capital for Canadian bank regulatory purposes.

7. The Issuer will distribute its Net Distributable Funds (as defined in the Preliminary Prospectus) on the last dayof June and December of each year commencing June 30, 2001 (each, a "Distribution Date"). On eachDistribution Date, unless the Bank has failed to declare dividends on any of its preferred shares or, if no suchshares are then outstanding, on its common shares, a holder of BMO BOaTS will be entitled to receive a non-cumulative fixed cash distribution (the "Indicated Distribution"). In the event the Bank fails to pay suchdividends, all of the Net Distributable Funds of the Issuer will be payable to the Bank as the sole holder of theSpecial Trust Securities and holders of the BMO BOaTS will not receive a distribution.

8. Pursuant to the terms of the Bank Share Exchange Trust Agreements (as defined in the PreliminaryProspectus), the Bank will covenant for the benefit of holders of BMO BOaTS Series-B that if, on anyDistribution Date where the Indicated Distribution is payable, the Issuer fails to pay the Indicated Distributionin full on the BMO BOaTS, the Bank will not declare dividends of any kind on certain classes of its sharesincluding preferred shares and common shares until approximately ten calendar months following suchDistribution Date unless the Issuer first pays such Indicated Distribution (or the unpaid portion thereof) toholders of BMO BoaTS.

9. In certain circumstances, the BMO BOaTS Series-B may be exchanged for preferred shares of the Bank. TheBank is the promoter of the Issuer and the Bank has signed a certificate page of the Preliminary Prospectus.

10. The Filer will underwrite a portion of the Offering that is larger than any other member of the underwritingsyndicate.

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

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

13. The nature and details of the relationship between the Issuer, the Filer and the Bank is described in thePreliminary Prospectus and will be described in the Prospectus. The information set out in Appendix C of theproposed Multi-Jurisdictional Instrument 33-105 will be contained in the Prospectus.

14. The Filer will receive no benefits relating to the Offering other than the payment of its fees in connectiontherewith.

15. Except for the Filer, the Issuer is neither a "related issuer" (or the equivalent), nor is it expected to be, inconnection the Offering, a "connected issuer" (or the equivalent), of any of the other underwriters (the"Independent Underwriters").

16. The Independent Underwriters will underwrite a majority of the Offering, with one of the IndependentUnderwriters, CIBC World Markets Inc., underwriting at least 20% of the dollar value of the Offering. CIBCWorld Markets Inc. will participate in the drafting of the Prospectus, the due diligence relating to the Offeringand in the pricing of the Trust Securities. CIBC World Markets Inc.'s participation in the Offering will bedisclosed in the Prospectus and each of CIBC World Markets Inc., the other Independent Underwriters and theLead Underwriter will sign a certificate in the Prospectus.

AND WHEREAS under the System this MRRS Decision Document evidences the decision of each DecisionMaker (collectively, the "Decision");

AND WHEREAS each of the Decision Makers under the Legislation is satisfied that the test contained in theLegislation that provides the Decision Maker with the jurisdiction to make the Decision has been met;

THE DECISION of the Decision Makers under the Legislation is that the Independent Underwriter Requirementshall not apply to the Lead Underwriter in connection with the Offering, provided that:

(a) CIBC World Markets Inc. participates in the Offering as stated in paragraph 16 above;

(b) the Prospectus contains the disclosure stated in paragraph 16 above; and

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

February 27, 2001.

"Robert W. Davis"       "Howard I. Wetson"