Securities Law & Instruments

Headnote

Mutual Reliance Review Systemfor Exemption Relief Applications - Subsidiary of U.S. corporationwhere U.S. parent is credit supporter exempt from GAAP reconciliationrequirements and eligiblity requirements of NI 44-101 and AIFrequirement - Financing subsidiary further exempt from interimand annual financial statement requirements (including MD&Arequirements), material change requirements, proxy requirementsand insider reporting requirements - Relief subject to conditions,including filing, under issuer's SEDAR profile, of documentsfiled by the credit support of the issuer with the Securitiesand Exchange Commission.

Ontario Statutory Provisions

Securities Act, R.S.O. 1990,c. S.5, as am., ss. 75, 80(b)(iii), 77, 78, 107, 108, 109 and121(2)(a)(ii).

National Instruments Cited

National Instrument 44-101 ShortForm Prospectus Distributions.

National Instrument 44-102 ShelfDistributions.

National Instrument 71-101 MultijurisdictionalDisclosure System.

Ontario Rules Cited

Rule 51-501 AIF and MD&A.

IN THE MATTER OF

THE SECURITIES LEGISLATIONOF

ALBERTA, BRITISH COLUMBIA,MANITOBA,

NEW BRUNSWICK, NEWFOUNDLANDAND LABRADOR,

NOVA SCOTIA, ONTARIO, PRINCEEDWARD ISLAND,

QUEBEC AND SASKATCHEWAN

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEWSYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

GENERAL ELECTRIC CAPITAL CORPORATIONAND

GE CAPITAL CANADA FUNDINGCOMPANY

MRRS DECISION DOCUMENT

WHEREAS the local securitiesregulatory authority or regulator (the "Decision Makers"or the "Commissions") in each of Alberta, BritishColumbia, Manitoba, New Brunswick, Newfoundland and Labrador,Nova Scotia, Ontario, Prince Edward Island, Quebec and Saskatchewan(collectively, the "Jurisdictions") has received anapplication (the "Application") from General ElectricCapital Corporation ("GE Capital") and its indirectwholly-owned subsidiary, GE Capital Canada Funding Company (the"Issuer", and together with GE Capital, the "Applicants")for a decision pursuant to the securities legislation of theJurisdictions (the "Legislation") that:

A. the Applicants be exemptedfrom the following requirements contained in the Legislation:

(i) the requirements insection 2.5(1) of National Instrument 44-101 ("NI 44-101")that a person or company guaranteeing non-convertible debtissued by an issuer be a reporting issuer with a 12-monthreporting history in a Canadian province or territory andhave a current annual information form (an "AIF")(the "Eligibility Requirement") in order to permitthe Issuer to issue non-convertible debt securities, inparticular medium term notes (the "Notes"), withan approved rating (as defined in NI 44-101) which willbe fully and unconditionally guaranteed by GE Capital (theissue of the Notes being referred to as the "Offering");

(ii) the requirement inNI 44-101 that the short form prospectus filed by the Issuerin connection with the Offering include a reconciliation(the "Reconciliation Requirement") to Canadiangenerally accepted accounting principles ("GAAP")of the consolidated financial statements of GE Capital includedin or incorporated by reference into the prospectus whichhave been prepared in accordance with foreign GAAP and that,where such financial statements are audited in accordancewith foreign generally accepted auditing standards ("GAAS"),the Issuer provide a statement by the auditor disclosingany material differences in the auditor's report and confirmingthat the auditing standards of the foreign jurisdictionare substantially similar to Canadian GAAS;

(iii) the requirement inNI 44-101 and under the Legislation of Ontario (OntarioSecurities Commission Rule 51-501), Quebec (section 159of the Regulation to the Securities Act (Quebec)) and Saskatchewan(Saskatchewan Instrument 51-501) that the Issuer have acurrent AIF and file renewal AIFs (the "AIF Requirement")with the Commissions;

(iv) the requirement thatthe Issuer file with the Commissions and send, where applicable,to its securityholders audited annual financial statementsor annual reports, where applicable, including without limitationmanagement's discussion and analysis thereon (the "AnnualFinancial Statement Requirement");

(v) the requirement thatthe Issuer file with the Commissions and send, where applicable,to its securityholders unaudited interim financial statements,including without limitation management's discussion andanalysis thereon (the "Interim Financial StatementRequirement");

(vi) the requirement thatthe Issuer issue and file with the Commissions press releasesand file material change reports (the "Material ChangeRequirement");

(vii) the requirement thatthe insiders of the Issuer file with the Commissions insiderreports (the "Insider Reporting Requirement");and

(viii) the requirement thatthe Issuer comply with the proxy and proxy solicitationrequirements, including filing an information circular orreport in lieu thereof (the "Proxy Requirement"and together with the Annual Financial Statement Requirement,the Interim Financial Statement Requirement, the MaterialChange Requirement and the Insider Reporting Requirement,the "Continuous Disclosure and Reporting Requirements");and

B. the Application and theDecision, as defined below, be held in confidence by the DecisionMakers subject to certain conditions.

AND WHEREAS under theMutual Reliance Review System for Exemptive Relief Applications(the "System") the Ontario Securities Commission isthe principal regulator for this Application;

AND WHEREAS the Applicantshave represented to the Decision Makers that:

1. GE Capital was incorporatedin 1943 in the State of New York under the provisions of theNew York Banking Law relating to investment companies, assuccessor to General Electric Contracts Corporation, whichwas formed in 1932. Until 1987, the name of GE Capital wasGeneral Electric Credit Corporation. GE Capital was reincorporatedin 2001 in the State of Delaware.

2. All outstanding commonstock of GE Capital is owned by General Electric Capital Services,Inc., the common stock of which is in turn wholly owned directlyor indirectly by General Electric Company ("GEC").GEC is a diversified industrial company whose common stockis listed and posted for trading on the facilities of theNew York Stock Exchange.

3. GE Capital provides a varietyof consumer services, mid-market financing, specialized financing,specialty insurance, equipment management and other specializedservices to businesses and individuals around the world. Asat December 31, 2001, GE Capital had total assets of morethan US$381 billion.

4. GE Capital is not a reportingissuer or the equivalent in any of the Jurisdictions.

5. GE Capital has been a reportingcompany under the United States Securities Exchange Act of1934, as amended (the "1934 Act"), for more than15 years.

6. GE Capital has filed withthe United States Securities and Exchange Commission (the"SEC") all filings required to be made with theSEC under the 1934 Act during the last 12 months.

7. GE Capital's outstandinglong term debt is rated "AAA" by both Standard &Poor's and Moody's Investors Services. As at December 31,2001, GE Capital had more than US$75 billion in long termdebt outstanding. GE Capital also had more than $110 billionoutstanding in the commercial paper markets as at December31, 2001.

8. The Issuer was incorporatedas an unlimited liability company under the laws of Nova Scotiaon September 17, 1998 and is an indirect wholly-owned subsidiaryof GE Capital. The head office of the Issuer is in Mississauga,Ontario.

9. The Issuer is not currentlya reporting issuer in any of the Jurisdictions.

10. The Issuer's primary businessis to obtain financing in public markets to fund the operationsof affiliated companies in Canada, and will have no otheroperations. As at December 31, 2001, the Issuer had more than$8.9 billion in non-convertible debt securities outstanding(the "Existing Debt"). The Existing Debt was issuedin the Eurobond market and the Canadian commercial paper marketand has been fully and unconditionally guaranteed by GE Capital.

11. GE Capital satisfies thecriteria set forth in paragraph 3.1(a) of National Instrument71-101 ("NI 71-101") and is eligible to use themulti-jurisdictional disclosure system ("MJDS"),as set out in NI 71-101, for the purpose of distributing approvedrating non-convertible debt in Canada based on compliancewith United States prospectus requirements with certain additionalCanadian disclosure.

12. Except for the fact thatthe Issuer is not incorporated under United States law, theOffering would comply with the alternative eligibility criteriafor offerings of non-convertible debt having an approved ratingunder the MJDS as set forth in Section 3.2 of NI 71-101.

13. The Issuer is ineligibleto issue the Notes by way of a prospectus in the form of ashort form prospectus under NI 44-101 as neither the Issuernor GE Capital, as credit supporter for the payments to bemade by the Issuer under the Notes, is a reporting issuerin any province or territory of Canada, and GE Capital doesnot itself have a current AIF.

14. As a result of the Offering,the Issuer will become a reporting issuer or the equivalentunder the Legislation and would therefore be subject to theAIF Requirement and the Continuous Disclosure and ReportingRequirements unless the relief requested herein is granted.

15. In connection with theOffering:

(i) prior to filing a preliminaryshort form prospectus for the Offering:

(a) GE Capital will filewith the Commissions an AIF in the form of GE Capital'sannual report on Form 10-K for the year ended December31, 2001 (the "GE Capital Form 10-K"), in electronicformat through SEDAR (as defined in National Instrument13-101) under a SEDAR profile to be created for the Issuer;and

(b) GE Capital will filewith the Commissions, in electronic format through SEDARunder a SEDAR profile to be created for the Issuer, thedocuments that GE Capital has filed under the 1934 Actduring the last year being, as of the date hereof, anannual report on Form 10-K for the year ended December31, 2001 and quarterly reports on Form 10-Q for the periodsending September 30, 2001, June 30, 2001 and March 31,2001;

(ii) the prospectus willbe prepared pursuant to the short form prospectus requirementscontained in NI 44-101 and will comply with the requirementsset out in Form 44-101F3 of NI 44-101 with the disclosurerequired by item 12 (documents incorporated by reference)of Form 44-101F3 of NI 44-101 being addressed by incorporatingby reference GE Capital's public disclosure documents, includingthe GE Capital Form 10-K and with the disclosure requiredby item 7 (earnings coverage ratios) of Form 44-101F3 ofNI 44-101 being addressed by disclosure with respect toGE Capital in accordance with United States requirements;

(iii) the prospectus willinclude or incorporate by reference all material disclosureconcerning the Issuer;

(iv) the prospectus willincorporate by reference the GE Capital Form 10-K (as filedunder the 1934 Act) together with all Form 10-Qs and Form8-Ks of GE Capital filed under the 1934 Act in respect ofthe financial year following the year that is the subjectof the GE Capital Form 10-K, as would be required were GECapital to file a registration statement on Form S-4 inthe United States, and will incorporate by reference anydocuments of the foregoing type filed after the date ofthe prospectus and prior to termination of the Offeringand will state that purchasers of the Notes will not receiveseparate continuous disclosure information regarding theIssuer;

(v) the consolidated annualand interim financial statements of GE Capital that willbe included in or incorporated by reference into the shortform prospectus are prepared in accordance with U.S. GAAPand otherwise comply with the requirements of U.S. law,and in the case of audited annual financial statements,such financial statements are audited in accordance withU.S. GAAS;

(vi) GE Capital will fullyand unconditionally guarantee the payments to be made bythe Issuer as stipulated in the terms of the Notes or inan agreement governing the rights of holders of Notes (the"Noteholders") such that the Noteholders shallbe entitled to receive payment from GE Capital within 15days of any failure by the Issuer to make a payment as stipulated;

(vii) the Notes will havean approved rating;

(viii) the Notes will rankpari passu to the Existing Debt;

(ix) GE Capital will signthe prospectus as credit supporter; and

(x) GE Capital will undertaketo file with the Commissions, in electronic format throughSEDAR under a SEDAR profile to be created for the Issuer,all documents that it files under Sections 13 (other thansections 13(d), (f) and (g) which relate, inter alia, toholdings by GE Capital of securities of other public companies)and 15(d) of the 1934 Act, together with the appropriatefiling fees, until such time as the Notes are no longeroutstanding.

16. In the circumstances,were GE Capital to have effected the Offering of the Notesunder the MJDS it would be unnecessary for it to reconcileto Canadian GAAP its financial statements included in or incorporatedby reference into the short form prospectus in connectionwith the issuance of the Notes.

17. Part 7 of NI 44-101 andItem 20.1 of Form 44-101F3 of NI 44-101 require the reconciliationto Canadian GAAP of financial statements prepared in accordancewith foreign GAAP that are included in a short form prospectus.

AND WHEREAS under theSystem this MRRS Decision Document evidences the decision ofeach Decision Maker (collectively, the "Decision");

AND WHEREAS each of theDecision Makers is satisfied that the test contained in theLegislation that provides the Decision Maker with the jurisdictionto make the Decision has been met;

THE DECISION of the DecisionMakers pursuant to the Legislation is that the Applicants beexempted from the Eligibility Requirement and the ReconciliationRequirement in connection with the Offering provided that:

(i) each of the Issuer andGE Capital complies with paragraph 15 above;

(ii) the Issuer complieswith all of the filing requirements and procedures set outin NI 44-101 except as varied by the Decision or as permittedby National Instrument 44-102;

(iii) GE Capital remainsthe direct or indirect beneficial owner of all of the issuedand outstanding voting securities of the Issuer; and

(iv) GE Capital continuesto satisfy the criteria set forth in paragraph 3.1 of NI71-101 (or any successor provision) and remains eligibleto use MJDS (or any successor instrument) for the purposesof distributing approved rating non-convertible debt inCanada based on compliance with United States prospectusrequirements with certain additional Canadian disclosure.

THE FURTHER DECISIONof the Decision Makers pursuant to the Legislation is that,in connection with the Offering, the AIF Requirement shall notapply to the Issuer, provided that (i) GE Capital complies withthe AIF requirements of NI 44-101 as if it is the issuer; and(ii) the Applicants comply with all of the conditions in theDecisions above and below.

June 21, 2002.

"Margo Paul"

 

THE FURTHER DECISIONof the Decision Makers pursuant to the Legislation is that,in connection with the Offering:

A. the Annual Financial StatementRequirement shall not apply to the Issuer, provided that (i)the Issuer files with the Commissions the annual reports onForm 10-K filed by GE Capital with the SEC within one businessday after they are filed with the SEC; and (ii) such documentsare provided to Noteholders whose last address as shown onthe books of the Issuer is in Canada in the manner and atthe time required by applicable United States law;

B. the Interim Financial StatementRequirement shall not apply to the Issuer, provided that (i)the Issuer files with the Commissions the quarterly reportson Form 10-Q filed by GE Capital with the SEC within one businessday after they are filed with the SEC; and (ii) such documentsare provided to Noteholders whose last address as shown onthe books of the Issuer is in Canada in the manner and atthe time required by applicable United States law;

C. the Material Change Requirementshall not apply to the Issuer, provided that (i) the Issuerfiles with the Commissions the mandatory reports on Form 8-K(including press releases) filed by GE Capital with the SECforthwith after the earlier of the date the report is filedwith the SEC and the date it is required to be filed withthe SEC; (ii) GE Capital forthwith issues in each Jurisdictionand the Issuer files with the Commissions any press releasethat discloses material information and which is requiredto be issued in connection with the mandatory Form 8-K requirementsapplicable to GE Capital; and (iii) if there is a materialchange in respect of the business, operations or capital ofthe Issuer that is not a material change in respect of GECapital, the Issuer will comply with the requirements of theLegislation to issue a press release and file a material changereport notwithstanding that the change may not be materialin respect of GE Capital;

D. the Insider Reporting Requirementshall not apply to insiders of the Issuer, provided that suchinsiders file with the SEC on a timely basis the reports,if any, required to be filed with the SEC pursuant to section16(a) of the 1934 Act and the rules and regulations thereunder;and

E. the Proxy Requirementsshall not apply to the Issuer, provided that (i) GE Capitalcomplies with the requirements of the 1934 Act and the rulesand regulations thereunder relating to proxy statements, proxiesand proxy solicitations in connection with any meetings ofits noteholders (if any); (ii) the Issuer files with the Commissionsthe materials relating to any such meeting filed by GE Capitalwith the SEC within one business day after they are filedby GE Capital with the SEC; and (iii) such documents are providedto Noteholders whose last address as shown on the books ofthe Issuer is in Canada in the manner, at the time and ifrequired by applicable United States law;

for so long as (i) GE Capitalmaintains an approved rating in respect of the Notes; (ii) GECapital maintains direct or indirect beneficial ownership ofall of the issued and outstanding voting securities of the Issuer;(iii) GE Capital maintains a class of securities registeredpursuant to section 12(b) or 12(g) of the 1934 Act or is requiredto file reports under Section 15(d) of the 1934 Act; (iv) GECapital continues to satisfy the criteria set forth in paragraph3.1 of NI 71-101 (or any successor provision) and remains eligibleto use MJDS (or any successor instrument) for the purpose ofdistributing approved rating non-convertible debt in Canadabased on compliance with United States prospectus requirementswith certain additional Canadian disclosure; (v) the Issuercarries on no other business than that set out in paragraph10 of the Decision; (vi) GE Capital continues to fully and unconditionallyguarantee the Notes as to the payments required to be made bythe Issuer to the Noteholders; (vii) the Issuer does not issueadditional securities other than (a) the Notes, debt securitiesranking pari passu to the Notes, any debentures issued in connectionwith the security granted by the Issuer to the Noteholders orthe holders of the Existing Debt or debt ranking pari passuwith the Notes, or (b) to GE Capital or to, direct or indirect,wholly-owned subsidiaries of GE Capital; and (viii) if notesdebt securities ranking pari passu with the Notes are hereinafterissued by the Issuer, GE Capital shall fully and unconditionallyguarantee such debt securities as to the payments required tobe made by the Issuer to holders of such notes or debt securities.

THE FURTHER DECISIONof the Decision Makers pursuant to the Legislation is that theApplication and the Decision shall be held in confidence bythe Decision Makers until the earlier of the date that the preliminaryprospectus is filed in connection with the Offering and July31, 2002.

June 21, 2002.

"Paul M. Moore"                    "H.Lorne Morphy"