Mutual Reliance Review System for Exemptive Relief Applications -- director is member of audit committee for two different issuers -- member has adult son who does not share a home with the member -- adult son is partner of firm that audits each issuer -- adult son has not participated in firm's audit and assurance or tax compliance practice, nor worked on either issuer's audit -- member of audit committee would be independent under New York Stock Exchange rules until issuer's first annual meeting after June 30, 2005 -- member not barred from being independent as a result of adult child's partnership with audit firm, subject to conditions, including sunset clause
Applicable Ontario Rules
Multilateral Instrument 52-110 Audit Committees (2004) 27 O.S.C.B. 3252, ss. 1.4, 9.1.
December 9, 2004
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
ALBERTA, SASKATCHEWAN, MANITOBA, ONTARIO, NOVA SCOTIA, NEWFOUNDLAND AND LABRADOR, NEW
BRUNSWICK, NORTHWEST TERRITORIES, NUNAVUT AND THE YUKON TERRITORY (THE JURISDICTIONS)
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS
IN THE MATTER OF
THE TORONTO-DOMINION BANK (TD) AND
TECK COMINCO LIMITED (TECK COMINCO AND, COLLECTIVELY, THE FILERS)
MRRS DECISION DOCUMENT
The local securities regulatory authority or regulator (the Decision Maker) in each of the Jurisdictions has received an application from the Filers for a decision under the securities legislation of the Jurisdictions (the Legislation) that the provision of Multilateral Instrument 52-110 Audit Committees which deems a director to be not independent if an adult child of that director has a prescribed relationship with the Filer's external auditor (the Requested Relief) does not apply to the Filers.
Under the Mutual Reliance Review System for Exemptive Relief Applications:
(a) the Ontario Securities Commission is the principal regulator for this application, and
(b) this MRRS decision document evidences the decision of each Decision Maker.
Defined terms contained in National Instrument 14-101 Definitions have the same meaning in this decision unless they are defined in this decision. The term "PwC LLP" means PricewaterhouseCoopers LLP.
This decision is based on the following facts represented by the Filers:
1. TD is a Schedule 1 chartered bank governed by the Bank Act (Canada) with its head office located in Toronto, Ontario. It is a reporting issuer (or equivalent) in every jurisdiction, and is not in default of its obligations under the Legislation. The common shares of TD are listed on the Toronto Stock Exchange, the New York Stock Exchange and the Tokyo Stock Exchange. TD is also a "foreign private issuer" under U.S. securities laws.
2. Teck Cominco is a corporation subsisting under the laws of Canada with its head office located in Vancouver, British Columbia. It is a reporting issuer (or equivalent) in every jurisdiction, and is not in default of its obligations under the Legislation. Teck Cominco's common shares are listed on the Toronto Stock Exchange and its convertible subordinated debentures are listed on the American Stock Exchange. Teck Cominco is also a "foreign private issuer" under U.S. securities laws.
3. Each of the Filers will be required to comply with the provisions of Multilateral Instrument 52-110, including the requirement that its audit committee be comprised solely of "independent directors", commencing with their annual meetings to be held in 2005.
4. PwC LLP is one of the two auditors of TD and is the sole auditor of Teck Cominco.
5. A director (the Director) who is a member of each Filer's audit committee has an adult son (the Son) who does not share a home with the director. The Son is a partner of PwC LLP. Since March 31, 2004, the Son has not participated in PwC LLP's audit and assurance or tax compliance practices, nor worked on either Filer's audit.
6. The Director would be considered to be an "independent director" for the purposes of SEC Rule 10A-3 and the independence standards of the American Stock Exchange and, until the first annual meeting after June 30, 2005, the independence standards of the New York Stock Exchange.
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 Requested Relief is granted, provided that:
(a) the Son does not share a home with the Director;
(b) the Son does not participate in PwC LLP's audit and assurance or tax compliance practices, nor work on either Filer's audit; and
(c) the Requested Relief expires with respect to each Filer upon the date of the Filer's first annual meeting of shareholders after June 30, 2005.