Securities Law & Instruments

Headnote

Subsection 59(1) of Schedule 1 - issuers exemptfrom payment of fees calculated pursuant to section 23(3) ofthe Schedule subject to certain conditions, which fees wouldotherwise be payable as a result of an arrangement for restructuringpurposes - no change in beneficial ownership of securities andissuer did not receive any proceeds from the distribution ofsecurities in connection with the arrangement.

Regulations Cited

Regulation made under the Securities Act, R.R.O.1990, Reg. 1015, as am., ss. 23(3), 59(1) of Schedule 1.

Rules Cited

Rule 45-501 Exempt Distributions - ss 7.5(6).

IN THE MATTER OF

THE SECURITIES LEGISLATIONOF

ONTARIO AND QUEBEC

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEWSYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

TSX GROUP INC. AND TSX INC.

 

MRRS DECISION DOCUMENT

WHEREAS the local securities regulatoryauthority or regulator (the "Decision Maker") in eachof the provinces of Ontario and Quebec (the "Jurisdictions")has received an application from TSX Group Inc. ("TSX Group")and TSX Inc. ("TSX Inc.") for a decision pursuantto the securities legislation (the "Legislation")of the Jurisdictions that TSX Group and TSX Inc. be exempt fromfees payable in connection with the plan of arrangement (the"Arrangement") between TSX Group and TSX Inc;

AND WHEREAS pursuant to the Mutual RelianceReview System for Exemptive Relief Applications (the "System"),the Ontario Securities Commission is the principal regulatorfor this application;

AND WHEREAS TSX Group and TSX Inc. haverepresented to the Decision Makers that:

1. The Toronto Stock Exchange was demutualizedand continued as the Toronto Stock Exchange Inc. under theBusiness Corporations Act (Ontario) on April 3, 2000.The Toronto Stock Exchange Inc. subsequently changed its nameto TSX Inc. on July 10, 2002.

2. The authorized capital of TSX Inc. consistsof an unlimited number of common shares, of which 2,660 commonshares are issued and outstanding.

3. TSX Group is a newly formed holding company,incorporated under the Business Corporations Act (Ontario)on August 23, 2002.

4. The authorized capital of TSX Group currentlyconsists of an unlimited number of common shares, of whichone common share is issued and outstanding. Immediately priorto completion of the reorganization described below, the authorizedcapital of TSX Group will consist of an unlimited number ofcommon shares, an unlimited number of voting preference sharesclassified as "choice shares" and an unlimited numberof preference shares issuable in series.

5. Prior to the completion of an initial publicoffering (the "Offering") by TSX Inc., TSX Groupwill become the holding company for TSX Inc. and related companies,and existing shareholders of TSX Inc. will become shareholdersof TSX Group.

6. TSX Group will then issue and sell itscommon shares to the public in each of the provinces and territoriesof Canada under a prospectus, and on a private placement basisoutside of Canada, including in the United States.

7. The reorganization, effected by way ofa court-approved statutory Arrangement under the BusinessCorporations Act (Ontario), received shareholder approvalon October 2, 2002 and was approved by the court on October7, 2002. It is expected that the Arrangement will be completedimmediately prior to the closing of the offering.

8. Pursuant to the reorganization, each shareholderof TSX Inc. will receive a fixed number of shares of TSX Group.Those shares will either be common shares or choice sharesof TSX Group, or a combination thereof. Choice shares willbe issued where the TSX Inc. shareholder has chosen to sellshares of TSX Group to a wholly-owned subsidiary of TSX Group("TSX Purchaseco"). The choice shares will be subjectto purchase rights under which they will be acquired by TSXPurchaseco on completion of the Offering at the price of thecommon shares in the Offering less the amount of underwriters'commissions and allocated expenses applicable to the Offering.Those acquired shares will subsequently be cancelled.

9. If the Offering is not completed, the reorganizationwill still be implemented subject to the right of the Boardof Directors of TSX Inc. to determine to not proceed withthe reorganization if that would be in the best interestsof TSX Inc.

10. The distribution of shares of TSX Groupunder the Arrangement will be exempt from the registrationand prospectus requirements contained in the Legislation.

11. Since each TSX Inc. shareholder will receivea fixed number of shares of TSX Group under the Arrangementand TSX Group will in turn hold all of the shares of TSX Inc.,shareholders will continue to hold indirectly after the Arrangementthe identical proportionate interest in TSX Inc. that theyheld directly prior to the Arrangement.

AND WHEREAS pursuant to the System thisMRRS Decision Document evidences the decision of each DecisionMaker (collectively, the "Decision");

AND WHEREAS each of the Decision Makersis satisfied that to do so would not be prejudicial to the publicinterest;

THE DECISION of the Decision Makers pursuantto the Legislation is that TSX Group and TSX Inc. are exemptfrom the fee otherwise payable in respect of the distributionof securities of TSX Group pursuant to the Arrangement, providedthat the minimum fee prescribed in each Jurisdiction is paid.

November 20, 2002.

"Howard I. Wetston"                    "HaroldP. Hands"