The Ontario Securities Commission (OSC) granted an exemption to the Bank of Montreal and its affiliates (collectively, the Applicants) from certain trading restrictions during distributions, formal bids, and share exchange transactions as outlined in section 2.2(a) of OSC Rule 48-501. The decision, made under section 5.1 of the same rule, allows the Applicants to engage in specific trading activities related to the Bank’s securities, which are considered highly liquid, without contravening the usual restrictions during issuer-restricted periods associated with Canadian offerings.
The key entities involved include asset managers, fund managers, plan facilitators, trustees, custodians, securities lending agents, restricted and non-restricted dealers, and the Bank itself. These parties are typically restricted from trading the Bank’s shares during certain periods when the Bank is distributing securities. However, the exemption enables them to continue trading to fulfill fiduciary duties, manage investments, facilitate employee share ownership plans, provide custody services, and conduct normal course issuer bids, among other activities.
The exemption is contingent on the securities being highly liquid and is subject to the condition that the trading activities do not undermine the public interest. The decision also revokes and replaces previous exemptive relief granted by the OSC.
The OSC’s decision is based on representations made by the Applicants regarding their regulated status, the nature of their business, and the necessity of the exemption to carry out their regular functions without undue disruption during issuer-restricted periods. The decision aims to balance the need for market integrity with the practical business operations of the Applicants, ensuring that their activities can continue in a manner that is not prejudicial to the public interest.