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Ontario Securities Commission
Ontario Commission des 22nd Floor 22e étage
Securities valeurs mobilières 20 Queen Street West 20, rue Queen ouest
Commission de l’Ontario Toronto ON M5H 3S8 Toronto ON M5H 3S8
August 25, 2017
In the Matter of the Securities Legislation of Ontario (the Jurisdiction)
and
In the Matter of The Process for Exemptive Relief in Multiple Jurisdictions
and
In the Matter of Firm Capital Mortgage Investment Corporation (the Issuer) and Canaccord Genuity Corp. (the Agent) (and together with the Issuer, the Filers)
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## DECISION
### Background
The Ontario Securities Commission (the Decision Maker) has received an application (the Application) from the Filers for a decision under the securities legislation of the Jurisdiction (the Legislation) for the following relief (the Exemption Sought):
(a) that the requirement that a dealer, not acting as agent of the purchaser, who receives an order or subscription for a security offered in a distribution to which the prospectus requirement applies, deliver to the purchaser or its agent the latest prospectus (including the applicable prospectus supplement(s) in the case of a base shelf prospectus) and any amendment to the prospectus (the Prospectus Delivery Requirement) does not apply to the Agent or other registered investment dealer acting on behalf of the Agent as a selling agent (each a Selling Agent) in connection with any at-the-market distribution, as defined in National Instrument 44-102 Shelf Distributions (NI 44-102), of common shares (Common Shares) of the Issuer in Canada pursuant to an equity distribution agreement (the Equity Distribution Agreement) to be entered into between the Issuer and the Agent (ATM Distribution); and
(b) that the requirements (collectively the Prospectus Form Requirements) to include in a prospectus supplement:
(i) a forward-looking issuer certificate of the Issuer in the form specified in section 2.1 of Appendix A to NI 44-102;
(ii) a forward-looking underwriter certificate in the form specified by section 2.2 of Appendix A to NI 44-102; and
(iii) a statement respecting purchasers' statutory rights of withdrawal and remedies of rescission or damages in substantially the form prescribed in Item 20 of Form 44-101F1 Short Form Prospectus Distributions (the Statement of Purchaser's Rights);
do not apply to a prospectus supplement of the Issuer to be filed in respect of an ATM Distribution.
The Decision Maker has also received a request from the Filers for a decision that the Application and this decision (together, the Confidential Material) be kept confidential and not be made public until the earliest of (i) the date on which the Filers enter into the Equity Distribution Agreement, (ii) the date on which any of the Filers advise the Decision Maker that there is no longer any need for the Confidential Material to remain confidential, and (iii) the date that is 90 days after the date of this decision (together, the Confidentiality Relief).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
(a) the Ontario Securities Commission is the principal regulator for the Application; and
(b) the Filers have provided notice that section 4.7(1)(c) of Multilateral Instrument 11‑102 Passport System (MI 11-102) is intended to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador.
### Interpretation
Terms defined in National Instrument 14-101 Definitions, in MI 11-102 or in NI 44-102 have the same meaning if used in this decision, unless otherwise herein defined.
### Representations
This decision is based on the following facts represented by the Filers.
#### The Issuer
1. The Issuer is a corporation incorporated under the Canada Business Corporations Act. The registered and head office of the Issuer is located in Toronto, Ontario.
2. The Issuer is a non-bank lender providing and investing in predominantly short term residential and commercial real estate financing, and achieves its investment objectives by pursuing a strategy of investing in selected niche real estate finance markets that are under-serviced by larger financial institutions. The Issuer is qualified as a mortgage investment corporation within the meaning of [subsection 130.1(6)](https://www.canlii.org/en/ca/laws/stat/rsc-1985-c-1-5th-supp/latest/rsc-1985-c-1-5th-supp.html#sec130.1subsec6_smooth) of the [Income Tax Act](https://www.canlii.org/en/ca/laws/stat/rsc-1985-c-1-5th-supp/latest/rsc-1985-c-1-5th-supp.html) (Canada).
3. The Issuer is a reporting issuer, or the equivalent, in each province of Canada and is in compliance with the requirements of securities legislation applicable therein.
#### The Agents
4. Canaccord Genuity Corp. is a corporation incorporated under the laws of Canada with its head office in Vancouver, British Columbia.
5. The Agent is registered as an investment dealer under the securities legislation of each of the provinces and territories of Canada, is a member of the Investment Industry Regulatory Organization of Canada, and is a participating organization of the TSX.
6. The Agent is not in default of any requirements under applicable securities legislation in any of the jurisdictions of Canada.
#### Proposed ATM Distribution
7. Subject to mutual agreement on terms and conditions, the Filers propose to enter into the Equity Distribution Agreement for the purpose of ATM Distributions involving the periodic sale of Common Shares by the Issuer through the Agent, as agent, under the shelf prospectus procedures prescribed by Part 9 of NI 44-102.
8. The Issuer has filed a short form base shelf prospectus dated July 17, 2017 (the Shelf Prospectus). Prior to making an ATM Distribution, the Issuer will have filed a prospectus supplement (the Prospectus Supplement) in each jurisdiction of Canada describing the terms of the ATM Distribution, including the terms of the Equity Distribution Agreement, and otherwise supplementing the disclosure in the Shelf Prospectus.
9. If the Equity Distribution Agreement is entered into, the Issuer will immediately:
(a) issue and file a news release pursuant to section 3.2 of NI 44-102 announcing the Equity Distribution Agreement and indicating that the Shelf Prospectus and the Prospectus Supplement have been filed on SEDAR and specifying where and how purchasers under an ATM distribution may obtain copies; and
(b) file the Equity Distribution Agreement on SEDAR.
10. The Issuer will conduct ATM Distributions through the Agent (as agent) directly or via a Selling Agent, through a marketplace as defined in National Instrument 21-101 Marketplace Operation in Canada upon which the Common Shares are listed, quoted or otherwise traded (each a Canadian Marketplace).
11. The Agent will act as the sole agent of the Issuer in connection with the sale of the Common Shares on a Canadian Marketplace pursuant to the Equity Distribution Agreement, directly by the Agent or through one or more Selling Agents, and will be paid an agency fee or commission by the Issuer in connection with such sales. The Agent will sign an agent's certificate in the form set out in paragraph 28 in the Prospectus Supplement filed on SEDAR.
12. The Agent will effect the ATM Distribution on any Canadian Marketplace, either itself or through a Selling Agent. If such sales are effected through a Selling Agent, the Selling Agent will be paid a seller's commission for effecting the trades on behalf of the Agent. A purchaser's rights and remedies under applicable securities legislation against the Agent, as agent of an ATM Distribution through a Canadian Marketplace, will not be affected by a decision to effect the sale directly or through a Selling Agent.
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minicounsel