Mutual Reliance Review System for Exemptive Relief Applications -- Issuer of asset-backed securities previously granted an exemption from the requirements to file annual and interim financial statements, subject to certain conditions -- issuer granted an exemption from the requirement under Multilateral Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings to file interim certificates for the 2004 financial year.
Multilateral Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings.
National Instrument 51-102 Continuous Disclosure Obligations.
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
ALBERTA, SASKATCHEWAN, MANITOBA, ONTARIO,
NOVA SCOTIA AND NEWFOUNDLAND AND LABRADOR
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS
IN THE MATTER OF
MERRILL LYNCH FINANCIAL ASSETS INC.
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatory authority or regulator (the "Decision Maker") in each of Alberta, Saskatchewan, Manitoba, Ontario, Nova Scotia and Newfoundland and Labrador (collectively, the "Jurisdictions") has received an application from Merrill Lynch Financial Assets Inc. (the "Issuer") for a decision pursuant to the securities legislation of the Jurisdictions (the "Legislation") that the requirements contained in the Legislation to file interim certificates ("Interim Certificates") with the Decision Makers under section 3.1 of Multilateral Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings ("MI 52-109") shall not apply to the Issuer in respect of its 2004 financial year, subject to certain terms and conditions;
AND WHEREAS pursuant to the Mutual Reliance Review System for Exemptive Relief Applications (the "System"), the Ontario Securities Commission is the Principal Regulator for this application;
AND WHEREAS, unless otherwise defined, the terms herein have the meaning set out in National Instrument 14-101 Definitions;
AND WHEREAS pursuant to an MRRS decision document dated May 16, 2003, a decision from the securities regulatory authority or regulator in Manitoba dated June 7, 1999 and a decision from the securities regulatory authority or regulator in Québec dated July 17, 1999 (collectively, the "Previous Decision"), the Issuer is exempted, on certain terms and conditions, from the requirements of the securities legislation in the jurisdictions of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Québec, Nova Scotia and Newfoundland and Labrador concerning, inter alia, the preparation, filing and delivery of interim and annual financial statements;
AND WHEREAS the Issuer has delivered a notice dated May 27, 2004 to the applicable securities regulatory authorities or regulators under subsection 13.2(2) of National Instrument 51-102 Continuous Disclosure Obligations stating that it intends to rely on the Previous Decision to the same extent and on the same conditions as contained in the Previous Decision;
AND WHEREAS the Issuer represented to the Decision Makers that:
1. The Issuer was incorporated under the laws of Canada on March 13, 1995 under the name Bulls Offering Corporation. By articles of amendment dated December 3, 1998, the name of the Issuer was changed to Merrill Lynch Mortgage Loans Inc. By articles of amendment dated March 15, 2001, the name of the Issuer was changed to Merrill Lynch Financial Assets Inc. The Issuer is a wholly-owned subsidiary of Merrill Lynch & Co., Canada Ltd. ("ML & Co.").
2. The Issuer is a reporting issuer, or the equivalent, in each of the provinces of Canada that provides for a reporting issuer regime and is not in default of any requirements of the Legislation.
3. The head office of the Issuer is located in Toronto, Ontario.
4. The financial year-end of the Issuer is December 31.
5. The Issuer is a special purpose corporation, the only securityholders of which, excluding ML & Co., which owns all of the Issuer's issued and outstanding voting securities, are or will be the holders (the "Certificateholders") of the Issuer's asset-backed securities issued from time to time (the "Certificates") that are serviced by the cash flows of discrete pools of mortgages, receivables or other financial assets, either fixed or revolving, that by their terms convert into cash within a finite time period and rights or other assets designed to assure the servicing or timely distribution of proceeds to securityholders (the "Securitized Assets").
6. The Issuer currently has and in the future will have no assets or liabilities other than limited rights and obligations under certain of the material contracts with respect to transactions related to the Certificates and does not presently carry on and will not carry on in the future any activities except in relation to the structuring and issue of asset-backed securities including transactions related to the Certificates. Certificateholders have and will have recourse only to the Securitized Assets and will not have recourse to the Issuer.
7. Each pooling and servicing agreement or similar agreement (each, a "Securitization Agreement") which governs or will govern, as the case may be, the rights of the Certificateholders and their entitlement to the related Securitized Assets provides for or will provide for, as the case may be, the fulfilment of certain administrative or servicing functions relating to the asset-backed securities, such as maintaining a register of holders of asset-backed securities and the making of periodic reports to Certificateholders by a custodian and one or more servicers or other agents appointed pursuant to such Securitization Agreement. The names of such servicer and agent are or will be disclosed in the applicable prospectus.
8. The Issuer or its duly appointed representative or agent provides or will provide, on an internet website identified or to be identified in the relevant prospectus for the Certificates to which all Certificateholders will be afforded access (the "Reporting Website") and otherwise as provided for in the relevant prospectus, no later than the 20th day of each month (or such subsequent business day as is provided in the Securitization Agreement if the 20th day of the month is not a business day) the financial and other information prescribed therein to be delivered or made available to Certificateholders on a monthly basis and will also file or cause to be filed reasonably and contemporaneously therewith the monthly reports commonly known as distribution date statements or their equivalent (each, a "Distribution Date Statement") on the System for Electronic Document Analysis and Retrieval ("SEDAR").
9. Within 60 days of the end of each fiscal quarter of the Issuer, or such lesser period as may be required under applicable laws, the Issuer or its duly appointed representative or agent will post on the Reporting Website and file on SEDAR, and mail to Certificateholders who so request, interim management discussion and analysis with respect to the applicable Securitized Assets included in the Issuer's AIF filed with the Decision Makers (as supplemented by any short form prospectuses filed by the Issuer during the intervening period).
10. Within 140 days of the end of each calendar year, the Issuer or its duly appointed representative or agent will post on the Reporting Website or mail to Certificateholders who so request and also file or cause to be filed reasonably contemporaneously therewith on SEDAR:
(a) annual management discussion and analysis with respect to the applicable Securitized Assets pool included in the Issuer's AIF for such year filed with the Decision Makers;
(b) an annual statement of compliance (each, a "Compliance Certificate") signed by a senior officer of each applicable servicer or other party acting in a similar capacity on behalf of the Issuer for the applicable Securitized Assets pool certifying that such servicer or such other party acting in a similar capacity has fulfilled all of its obligations under the related Securitization Agreement during the year, or, if there has been a default in the fulfillment of any obligation, specifying each such default and the nature and status thereof; and
(c) for each Securitized Assets pool, an annual accountants' report (each, an "Accountants' Report") in form and content acceptable to the Decision Makers prepared by a firm of independent public or chartered accountants acceptable to the Decision Makers respecting compliance by each applicable servicer or such other party acting in a similar capacity on behalf of the Issuer with the Uniform Single Attestation Program for Mortgage Brokers published by the Mortgage Bankers Association of America or such other servicing standard as may be acceptable to the Decision Makers.
11. Form 52-109FT2 requires the certifying officer to certify as follows:
(a) he or she has reviewed the interim filings (as defined in MI 52-109) of the Issuer for the applicable interim period;
(b) based on his or her knowledge, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings; and
(c) based on his or her knowledge, the interim financial statements together with the other financial information included in the interim filings fairly present in all material respects the financial condition, results of operations and cash flows of the Issuer, as of the date and for the periods presented in the interim filings.
12. "Interim filings" is defined in MI 52-109 to include interim financial statements filed under provincial and territorial securities legislation.
13. The Previous Decision exempts the Issuer from the requirements to file interim financial statements. The information that is to be disclosed in interim financial statements is not relevant to the holders of Certificates because such holders only have recourse to the Securitized Assets and do not have recourse to the Issuer.
14. The Issuer and its officers do not participate in the preparation of the Distribution Date Statements other than reviewing the Distribution Date Statements and informing the reporting agent appointed under the relevant Securitization Agreement of any errors that they are aware of.
15. The Compliance Certificate and Accountants' Report provide assurance to the holders of Certificates in respect of the accuracy of the Distribution Date Statements.
AND WHEREAS under the System, this MRRS Decision Document evidences the decision of each Decision Maker (collectively, the "Decision");
AND WHEREAS each of the Decision Makers is satisfied that the test contained in the Legislation 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 requirement contained in the Legislation to file Interim Certificates with the Decision Makers under section 3.1 of MI 52-109 shall not apply to the Issuer in respect of the interim periods during its 2004 financial year provided that the Issuer is not required to prepare, file and deliver interim financial statements for such interim periods under the Legislation, whether pursuant to exemptive relief or otherwise.
May 31, 2004.