Securities Law & Instruments

Headnote

ONTARIO FINANCING AUTHORITY

Application pursuant to section 144 of the Securities Act (Ontario), to revoke a previous ruling and order and its subsequent amending order. The previous ruling and orders are superceded by the new Ontario Regulation 85/05 made under the Act, Exemptions Respecting the Ontario Financing Authority.

IN THE MATTER OF

THE SECURITIES ACT, R.S.O. 1990,

CHAPTER S.5, AS AMENDED (the Act)

AND

IN THE MATTER OF

ONTARIO REGULATION 1015, R.R.O. 1990,

AS AMENDED (the Regulation)

AND

IN THE MATTER OF THE

ONTARIO FINANCING AUTHORITY

 

ORDER

(Section 144 of the Act)

UPON the application (the Application) of the Ontario Financing Authority (OFA) to the Ontario Securities Commission (the Commission) for an order, pursuant to section 144 of the Act, to revoke the Ruling and Order of the Commission, made under section 211 of the Regulation and section 74(1) of the Act, dated September 23, 1994, In the Matter of Ontario Financing Authority (collectively the 1994 Decision), as varied by an order of the Commission, made under section 144 of the Act, dated March 27, 1997, In the Matter of the Ontario Financing Authority (the 1997 Variation Order)(the 1994 Decision, as varied by the 1997 Variation Order, is referred to as the Existing Decision);

AND UPON considering the Application and the recommendation of staff of the Commission;

AND UPON the OFA having represented to the Commission that:

1. The Applicant was established as a corporation without share capital under the Capital Investment Plan Act, S.O. 1993, c. 23 (the CIPA).

2. The CIPA was enacted by the Government of Ontario to establish a capital investment plan for Ontario in which the Government, municipalities, other public bodies and the private sector would work together to invest in the province's infrastructure. The CIPA applies to four Crown corporations, one of which is the OFA.

3. The administration of the OFA is the responsibility of the Minister of Finance.

4. Subject to a proviso, the 1994 Decision provided that:

(a) pursuant to subsection 74(1) of the Act, trades by the OFA of interests in two investment pools (described in the 1994 Decision) with Public Bodies are not subject to section 25 or 53 of the Act;

(b) pursuant to subsection 74(1) of the Act, the OFA is not subject to the requirements of paragraph 25(1)(c) of the Act to register as an adviser in connection with its investment advisory activities in relation to Public Bodies and the Province of Ontario; and

(c) pursuant to section 211 of the Regulation, the OFA is exempt from the provisions of subsection 206(1) of the Regulation in connection with any trades by the OFA in portfolio securities of the two investment pools.

5. The 1997 Variation Order amended the 1994 Decision by, among other things:

(a) replacing paragraph 9 of the representations in the 1994 Decision, which described the investments which comprise the two investments pools, with a new description;

(b) adding to the representations in the 1994 Decision the following:

17. "under Part II.1 s.16.5(2) of the Financial Administration Act, R.S.O. 1990, c. F12 as amended, (the "Financial Administration Act") which came into force on December 9, 1996 under the Good Financial Administration Act, S.O. 1996, c. 29, ministries, as such term is defined in the Financial Administration Act ("Ministries"), are empowered to invest money held outside the Consolidated Revenue Fund and belonging to them or held by them in trust for the Crown, in any investment pool administered by the OFA which (i) restricts its investments to Ontario investments; and (ii) receives and manages funds invested only by Public Bodies and Ministries;"

(c) replacing the operative portion of the 1994 Decision to provide, subject to a proviso, that:

(i) pursuant to subsection 74(1) of the Act, trades by the OFA of interests in the two investment pools with Public Bodies and Ministries are not subject to section 25 or 53 of the Act;

(ii) pursuant to subsection 74(1) of the Act, the OFA is not subject to the requirements of paragraph 25(1)(c) of the Act to register as an adviser in connection with its investment advisory activities in relation to Public Bodies and the Province of Ontario; and

(iii) pursuant to section 211 of the Regulation, the OFA is exempt from the provisions of subsection 206(1) of the Regulation in connection with any trades by the OFA in portfolio securities of the two investment pools.

6. On March 4, 2005, Ontario Regulation 85/05 made under the Act, Exemptions Respecting the Ontario Financing Authority (the New OFA Regulation) was filed with the Registrar of Regulations.

7. The full text of the New OFA Regulation is set out in the attached Schedule A.

8. The OFA has requested that the Existing Decision be revoked on the basis that the New OFA Regulation has made it no longer necessary.

AND UPON the Commission being of the opinion that to make this Order would not be prejudicial to the public interest;

IT IS ORDERED, pursuant to section 144 of the Act, that the Existing Decision is revoked.

March 18, 2005.

"Susan Wolburgh Jenah"
Commissioner
Ontario Securities Commission
 
"Paul K. Bates"
Commissioner
Ontario Securities Commission

 

SCHEDULE A

ONTARIO REGULATION 85/05

made under the

SECURITIES ACT

EXEMPTION RESPECTING THE ONTARIO FINANCING AUTHORITY

Definition

1. In this Regulation,

"public body" has the same meaning as in section 29 of the Capital Investment Plan Act, 1993.

Exemption re investment advice

2. The Ontario Financing Authority is not required to be registered under the Act in order to act as an adviser in the provision of investment advice to the Crown in right of Ontario and to public bodies.

Exemptions re investment pool

3.

(1) The Ontario Financing Authority is not required to be registered under the Act in connection with the issue of units of any investment pool that is created by the Authority for the purpose of facilitating investment by the Crown in right of Ontario and by public bodies, if the portfolio securities that comprise the investment pool are restricted to bonds, debentures, commercial paper and other debt instruments in which the Minister of Finance is authorized to invest under the Financial Administration Act.

(2) No prospectus is required to be filed under the Act in connection with the issue of units of an investment pool described in subsection (1).