Canaccord Capital Corp. has received regulatory relief from underwriter conflict rules, allowing it to participate in a trust offering being sold by its 20%-owner Manulife Financial.

Canaccord was granted an exemption from the rule that prohibits a dealer from acting as a direct underwriter in a distribution if a related issuer of the dealer is the selling securityholder. In this case, Manulife is one of the selling shareholders in a distribution of Superior Plus Income Fund.

Superior has entered into a bought deal with Scotia Capital Inc., as the lead underwriter. Under the offering, Superior will issue 4,500,000 units, and certain unitholders of Superior will sell 3,500,000 units.

It is proposed that the syndicate will include Scotia Capital, CIBC World Markets Inc., RBC Dominion Securities Inc., TD Securities Inc., National Bank Financial Inc., BMO Nesbitt Burns Inc., Canaccord, Desjardins Securities Inc., FirstEnergy Capital Corp. and HSBC Securities (Canada) Inc.

Manulife will sell 557,278 units. It also owns 20% of Canaccord, making it a “related issuer”. So, the rules prohibited Canaccord from acting as an underwriter in the deal.

Canaccord was also unable to rely on an exemption since the proportionate share of the offering to be underwritten by the largest independent underwriter is 6%, so the regulators granted relief. Canaccord will underwrite approximately 4.0% of the offering.

http://www.osc.gov.on.ca/en/Regulation/Orders/2003/ord20030620_213_canaccordcapital.htm