In the Matter of Fortis Inc., 2018 CanLII 15284

March 23, 2018

AND

Background

The Ontario Securities Commission (the Decision Makers), being the principal regulator in the Jurisdiction, 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 Exemptions 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 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 Agents or any other TSX participating organization or other marketplace participant acting as selling agent for the Agents (each, a Selling Agent) in connection with any at-the-market distribution (each, an ATM Distribution and collectively, the ATM Offering), as defined in National Instrument 44-102 Shelf Distributions (NI 44-102) of common shares (Common Shares) of the Issuer in Canada and the United States (U.S.) pursuant to one or more substantially identical equity distribution agreements (the Equity Distribution Agreement) to be entered into between the Issuer and the Agents; and

(b) that the requirements to include in a base shelf prospectus or prospectus supplement or an amendment thereto:

(i) a forward-looking issuer certificate of the Issuer in the form specified in section 2.1 or section 2.4, as applicable, of Appendix A to NI 44-102;

(ii) a forward-looking underwriter certificate in the form specified by section 2.2 or section 2.4, as applicable, 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;

(collectively, the Prospectus Form Requirements) do not apply to the Shelf Prospectus (as defined below), the Prospectus Supplement (as defined below) or an amendment thereto provided that the Issuer include in the Prospectus Supplement or an amendment thereto the form of issuer certificate and form of underwriter certificate and include in the Prospectus Supplement or an amendment thereto the revised description of a purchaser's statutory rights of withdrawal and remedies for rescission or damages described below, in each case (other than with respect to the underwriter certificate) superseding and replacing the corresponding language in the Shelf Prospectus solely with regards to the ATM Offering.

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 based on the "most significant connection" test articulated under section 3.6(6)(c) of National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions; and

(b) the Filers have provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, Québec, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador (collectively and together with the Jurisdiction, the Reporting Jurisdictions).

Interpretation

Terms defined in National Instrument 14-101 Definitions, National Instrument 13-101 System for Electronic Document Analysis and Retrieval (SEDAR), in MI 11-102 or in NI 44-102 have the same meaning if used in this decision, unless otherwise defined herein. All dollar figures in this decision refer to Canadian dollars.

Representations

This decision is based on the following facts represented by the Filers.

The Issuer

The Issuer is a corporation continued under the Corporations Act (Newfoundland and Labrador). The head office of the Issuer is in St. John's, Newfoundland and Labrador.
The Issuer is a reporting issuer in each province of Canada and is not in default of securities legislation in any jurisdiction of Canada.
The Common Shares are listed on the Toronto Stock Exchange (the TSX) and the New York Stock Exchange (the NYSE).
The Issuer is subject to reporting obligations under the United States Securities Exchange Act of 1934, as amended (the U.S. Exchange Act), and files its continuous disclosure documents with the Securities and Exchange Commission (the SEC) in the U.S.
The Issuer filed a short form base shelf prospectus (the Shelf Prospectus) in the Reporting Jurisdictions and amendment no. 1 to a registration statement on Form F-10 with the SEC on November 30, 2016 under the multi-jurisdictional disclosure system providing for the distribution from time to time of Common Shares, first preference shares, second preference shares, subscription receipts and debt securities having an aggregate offering price of up to $5,000,000,000 (or the equivalent in U.S. dollars or other currencies).
The Ontario Securities Commission issued a receipt for the Shelf Prospectus on November 30, 2016, which receipt was deemed pursuant to MI 11-102 to have been issued by the regulator in each of the other Reporting Jurisdictions.

The Agents

Scotia Capital Inc. is a corporation incorporated under the laws of the Province of Ontario, with its head office in Toronto, Ontario.
TD Securities Inc. is a corporation incorporated under the laws of the Province of Ontario, with its head office in Toronto, Ontario.
Morgan Stanley Canada Limited is a corporation incorporated under the laws of Canada, with its head office in Toronto, Ontario.
Wells Fargo Securities Canada, Ltd. is a limited company incorporated under the laws of the Province of Nova Scotia, with its head office in Toronto, Ontario.
Each of the Canadian Agents is registered as an investment dealer under the securities legislation in each province of Canada, is a member of the Investment Industry