Mutual Reliance Review System for Exemptive Relief Applications - director who is the Chair of the issuer's audit committee, has an adult son who does not share a home with the director, adult son is a partner of firm that audits the issuer, adult son has not participated in firm's audit and assurance or tax compliance practices, nor worked on the issuer's audit, the director would be independent under New York Stock Exchange rules until issuer's first annual meeting after June 30, 2005, director not barred from being independent as a result of adult child's partnership with audit firm, subject to conditions, including sunset clause.
Multilateral Instrument 52-110 Audit Committees
Citation: Enbridge Inc., 2005 ABASC 201
March 2, 2005
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
ALBERTA, SASKATCHEWAN, MANITOBA, ONTARIO,
NEW BRUNSWICK, NOVA SCOTIA,
NEWFOUNDLAND AND LABRADOR (THE "JURISDICTIONS")
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS
IN THE MATTER OF
ENBRIDGE INC. (THE "FILER")
MRRS DECISION DOCUMENT
The local securities regulatory authority or regulator (the "Decision Maker") in each of the Jurisdictions has received an application from the Filer for a decision (the "Decision") under the 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 does not apply to the Filer (the "Requested Relief").
Under the Mutual Reliance Review System for Exemptive Relief Applications:
(a) the Alberta 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" means PricewaterhouseCoopers LLP.
This Decision is based on the following facts represented by the Filer:
1. The Filer is a corporation subsisting under the laws of Canada with its head office located in Calgary, Alberta. The Filer is a reporting issuer (or equivalent) in the Jurisdictions, and is not in default of its obligations under the Legislation. The common shares of the Filer are listed on the Toronto Stock Exchange and the New York Stock Exchange.
2. The Filer 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.
3. PwC is the auditor of the Filer.
4. A director (the "Director") who is the Chair of the 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. The Son has not participated in PwC audit and assurance or tax compliance practices, nor worked on the Filer's audit.
5. The Director would be considered to be an "independent director" for the purposes of SEC Rule 10A-3 and until the first annual meeting of the Filer 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:
(i) the Son does not share a home with the Director;
(ii) the Son does not participate in PwC's audit and assurance or tax compliance practices, nor work on the Filer's audit; and
(iii) the Requested Relief expires with respect to the Filer upon the date of the Filer's first annual meeting of shareholders after June 30, 2005.