A foreign issuer that has only accessed the capital markets in Ontario once, 6 years ago and that has less than 1% of its securities held by Canadian residents is exempt from the requirement to pay a participation fee.
Securities Act, R.S.O. 1990, c. S.5, as am.
Ontario Securities Commission Rule 13-502 Fees (2003), 26 O.S.C.B. 890, ss. 2.2 and 6.1.
IN THE MATTER OF
THE SECURITIES ACT, R.S.O. 1990,
CHAPTER S.5, AS AMENDED
ONTARIO SECURITIES COMMISSION RULE 13-502
IN THE MATTER OF
(Section 6.1 of Rule 13-502 Fees)
UPON the Director having received the application of Endesa, S.A. (the Applicant) for an order under section 6.1 of Ontario Securities Commission Rule 13-502 Fees (Rule 13-502) exempting Endesa from the requirement in Rule 13-502 to pay a participation fee;
AND UPON considering the application and the recommendation of the staff of the Ontario Securities Commission (the Commission);
AND UPON the Applicant having represented to the Director as follows:
1. The Applicant is a corporation (Sociedad anónima) organized under the laws of Spain.
2. The Applicant is registered in the Madrid Mercantile Register, Volume 323, Sheet 1, Page 6045.
3. The Applicant's registered office and main offices are located at calle Ribera del Loira n 60, 28042 Madrid, Spain.
4. The Applicant engages mainly in the generation, transmission, distribution and retailing of electricity. The Applicant also operates in the gas industry, in other energy industries (cogeneration, renewable energies), in the telecommunications industry and in other service industries which contribute value to its core business.
5. The Applicant is the largest operator in the Spanish electricity industry and the leading private electricity multinational in Latin America. In addition, the Applicant has a significant presence in the European electricity market, particularly in Italy. In total, the Applicant operates in the electricity markets of 11 countries on 3 continents.
6. The Applicant is a "reporting issuer" and is not in default of any of the requirements of the Securities Act (Ontario) (the Act).
7. The Applicant has been a reporting issuer since a global public offering (the GPO) of shares of capital stock (Shares) and American Depositary Shares (ADSs) on October 17, 1997 (collectively, Shares and ADSs are Applicant Securities).
8. The Applicant Securities were offered by certain Canadian underwriters to investors in Canada as part of the 1997 GPO (the Canadian Offering).
9. The Canadian Offering was made in compliance with the procedures contemplated by proposed draft National Policy Statement No. 53 (DNP 53), entitled the Foreign Applicant Prospectus and Continuous Disclosure System, under which offerings of securities of foreign issuers that meet specified eligibility requirements may be made in Canada on the basis of disclosure documents prepared in accordance with U.S. securities laws, with certain additional Canadian disclosure.
10. Pursuant to DNP 53, the Canadian Offering was made by way of a prospectus prepared under U.S. securities law. Each prospectus used in the Canadian Offering included Canadian wrap pages containing additional information, legends and certificates contemplated by DNP 53.
11. In Ontario, the Canadian Offering was made pursuant to an order of the Commission (the Ontario Order), inter alia,
(a) exempting the Applicant from the continuous disclosure requirements in Sections 75, 77, 78 and 79 of the Act and thereby allowing the Applicant to satisfy the continuous disclosure requirements as contemplated by DNP 53 by (i) complying with U.S. securities laws relating to current reports and annual reports, (ii) filing with the Commission two copies of any material filed with the U.S. Securities and Exchange Commission (the SEC) (a) in the case of current reports, forthwith after the earlier of the date the report is filed with the SEC and the date it is required to be filed with the SEC, and (b) in the case of other documents, within 24 hours after they are filed with the SEC, (iii) providing any such documents to security holders whose last address as shown on the book of the Applicant is in Ontario, in the manner and at the time required by U.S. securities laws and (iv) complying with the requirements of the New York Stock Exchange (the NYSE) relating to public disclosure of material information on a timely basis and forthwith issuing in Canada, and filing with Commission any press release that discloses a material change in the affairs of the Applicant; and
(b) exempting the Applicant and Morgan Guaranty Trust Company of New York from the information circular, proxy and proxy solicitation requirements in Section 81 and Part XIX of the Act, provided that any proxies and proxy solicitation material provided to U.S. security holders are provided, at the same time and in the same manner, to security holders of the same class whose last address as shown on the books of the Applicant is in Ontario.
12. The Canadian Offering is the only instance in which the Applicant has accessed the capital markets in Canada.
13. Shares of the Applicant are currently listed on the Spanish Stock Exchange and Santiago de Chile Foreign Securities Stock Exchange.
14. ADSs of the Applicant are currently listed on the NYSE.
15. As of December 31, 2003, the Applicant's issued and outstanding capital consists of 1,058,752,117 Shares.
16. As of December 31, 2003, there are 10 registered Ontario holders of Shares, holding approximately 0.107% of the issued and outstanding Shares. Canadian securityholders hold 0.203% of the issued and outstanding Shares.
17. As permitted by Spanish law, the Applicant has issued bearer securities. As a result, the Applicant is unable to accurately determine the number of Ontario resident beneficial shareholders holding Applicant Securities (the Ontario Shareholders).
18. The Applicant wishes to cease to become a reporting issuer in Ontario but is unable to obtain such relief because the Applicant is unable to accurately determine the number of Ontario Shareholders.
19. The fee requirements that existed before Rule 13-502 came into force have increased substantially since the Applicant became a "reporting issuer" in Ontario.
20. The Applicant, pursuant to the Ontario Order described in paragraph 11, has already received exemptive relief in Ontario from complying with certain continuous disclosure requirements prescribed by the Act.
21. Before the completion of the GPO the Applicant had been, and following the completion of the GPO the Applicant continues to be, subject to the continuous disclosure requirements of the U.S. Securities Exchange Act of 1934, as amended (the 1934 Act) and files reports and other information with the SEC and remits the prescribed fees to the SEC on an ongoing basis.
22. The Applicant is not in default of any of the requirements of the 1934 Act.
23. The Applicant continues to be subject to and will continue to comply with the requirements of the NYSE relating to public disclosure of material information on a timely basis and the remittance of fees.
24. The Applicant is not in default of any of the requirements of the NYSE.
25. There is not, and there will not be, a marketplace (as that term is defined in NI 21-101 Marketplace Operation (NI 21-101)) in Canada for any securities of the Applicant.
26. The Applicant does not intend, now or in the future, to issue or distribute any securities in Canada.
IT IS THE DECISION of the Director, under section 6.1 of Rule 13-502, that the Applicant is exempt from the requirement in section 2.2 of Rule 13-502 to pay a participation fee, for so as long as:
a) the Applicant does not issue or distribute any securities in Canada; and
b) there is no marketplace, as that term is defined in NI 21-101, in Canada for any securities of the Applicant.
February 18, 2004.