,canada ,cu/oms                       #a
& ,rev5ue ,ag5cy

          ,9t]pret,n ,bullet9
    
,subject3 ,9come ,tax ,act
  ,4posi;ns--,*anges 9 ,t]ms (
  ,securities
,numb]3 ,,it-#ddh
,date3 ,june #f1 #aihj
,ref];e3 ,p>agraph #ed7c7

#a4 ,alt],ns made 9 ! "rs1 pref];es1
  t]ms1 3di;ns1 re/ric;ns or limit,ns
  atta*+ 6%>es1 bonds1 deb5tures1 notes1
  c]tificates1 mortgages1 hypo!cs1
  agree;ts ( sale or simil> oblig,ns
  7"h9af ref]r$ 6z 8*anges 9
  securities07 frequ5tly d n fall cle>ly
  )9 ! li/s ( 9clu.ns in1 or exclu.ns f1
  ! m1n+ (! t]m 84posi;n0 3ta9$ 9
  p>agraph #ed7c74 ,! purpose ( ?
  bullet9 is 64cuss ! factors t !
  ,de"p;t 3sid]s 9 det]m9+ :e!r or n a
  4posi;n has tak5 place 9 s*         #a
               ,,it-#ddh             a#a
  circum/.es4 ,h["e1 ! ,de"p;t w n
  require t a 4posi;n 2 report$ 0a hold]
  ( an alt]$ secur;y if "! >e no
  resultant tax 3sequ;es4 ,a4i;n,y1 if
  s* a hold] fails 6recognize a 4posi;n
  9 a situ,n describ$ 9 ? bullet9 &!
  ,de"p;t does n assess or reassess
  6give e6ect 6! 4posi;n )9 ! /atutory
  "t limit1 ! tax 3sequ;es (a 4posi;n
  o3urr+ subsequ5t 6! expir,n ( ? "t w 2
  -put$ z ?\< ! prior 4posi;n _h n tak5
  place4
#b4 ,0virtue ( clause #ed7c77;ii77,a71
  any transac;n or ev5t t 9volves !
  redemp;n 9 :ole or 9 "p or ! c.ell,n
  (a secur;y necess>ily results 9 xs
  4posi;n 9 ! h&s (! hold]1 ev5 ?\< !
  result a*iev$ cd h be5 a3ompli%$ 0a
  *ange 9 t]ms4 ,= example1 a *ange 9 a
  "r atta*+ 6a secur;y c 2 e6ect$ 0an
  am5d;t 6xs orig9al t]ms or 0! c.ell,n
  (! orig9al secur;y & xs replace;t
  0ano!r secur;y id5tical 9 all respects
  except t ! *ang$ "r is n[           #b
               ,,it-#ddh             b#a
  9corporat$4 ,9 ! latt] case a 4posi;n
  necess>ily takes place1 :ile 9 ! =m]
  case ! signific.e (! *ange is !
  det]m9+ factor4
#c4 ,z a g5]al rule1 & subject 6! f/
  s5t;e 9 #b abv1 ! ,de"p;t exam9es !
  e6ect a*iev$ 0a "picul> set ( *anges1
  r ?an ! me?od adopt$ 6a3ompli% x4 ,=
  example1 ! replace;t ( old %>e
  c]tificates ) new c]tificates :5 "!
  has be5 no *ange 9 t]ms does n m1n t a
  4posi;n has o3urr$1 nor is x 6be
  assum$ t no 4posi;n is 9volv$ :5 a
  *ange 9 t]ms is n a3ompani$ 0! issu.e
  (a new c]tificate4
--------------------------------------#b
#d4 ,9 3sid]+ a "picul> fact situ,n1 !
  ,de"p;t 5d1v\rs 6e/abli% :e!r or n x
  is r1sona# 6reg>d ! am5d$ secur;y 2+ !
  same prop]ty z t : "uw5t ! *ange4 ,9
  evalu,ns ( ? nature x is obvi\s t no
  8h>d & fa/0 rules ( univ]sal applic,n
  c 2 =mulat$4 ,! -;ts t foll[ m/ "!=e 2
                                      #c
               ,,it-#ddh             a#b
  reg>d$ z guidel9es only & may n apply
  9 a "picul> set ( circum/.es4
#e4 ,! a4i;n ( an op;nal 3v].n f1ture 6a
  "picul> class ( secur;y does n g5],y
  9volve a 4posi;n4

        ,*anges 9 ,t]ms ( ,debt
       ,oblig,ns 7p>agraphs #f-h7
    
#f4 ,a *ange 9 ! "uly+ secur;y support+
  a debt oblig,n is n usu,y reg>d$ z a
  4posi;n (! oblig,n xf 2c 9 ! normal
  situ,n1 ! hold]'s claim on ! "uly+
  secur;y is only a 3t+5t "o4
#g4 ,! foll[+ *anges 9 respect (! debt
  oblig,n xf 7un.s c>ri$ \ pursuant 6an
  au?oriz+ provi.n 9 xs orig9al t]ms7 >e
  3sid]$ 6be s funda;tal 6! hold]'s
  economic 9t]e/ 9 ! prop]ty t !y alm
  9v>iably precipitate a 4posi;n3
  7a7 a *ange f 9t]e/-be>+ 69t]e/-free
    or vice v]sa1
  7b7 a *ange 9 repay;t s*$ule or
    matur;y date1                     #d
               ,,it-#ddh             b#b
  7c7 an 9cr1se or decr1se 9 ! pr9cipal
    am.t1
  7d7 ! a4i;n1 alt],n or elim9,n (a
    premium paya# ^u retire;t1
  7e7 a *ange 9 ! debtor1 &
  7f7 ! 3v].n (a fix$ 9t]e/ bond 6a bond
    9 respect ( : 9t]e/ is paya# only 6!
    ext5t t ! debtor has made pr(it1 or
    vice v]sa4
#h4 ,excep;ns 6! g5]al rule set \ 9
  #g7b7 abv >e made :5 ! degree ( *ange
  is m9imal &( ll relative import.e 9 !
  circum/.es4 ,! g5]al rule /at$ 9 #g7e7
  abv is subject 6a rollov] at an am.t
  equal 6! adju/$ co/ base :5 a debt
  oblig,n ( an amalgamat+ corpor,n
  2comes ! oblig,n ( an amalgamat+ 5t;y
  on id5tical t]ms1 & w n apply :5 a
  ?ird "py "utakes )a debtor 64*>ge !
  debtor's responsibilities "u an
  oblig,n1 :ile ! debtor's liabil;y 6!
  hold]s is una6ect$4

                                      #e
       ,*anges 9 ! ,t]ms ( ,%>es     c#b
           7p>agraphs #i-af7
    
#i4 ,a %>ehold]'s 9t]e/ 9 a corpor,n
  3si/s (a bundle ( "rs & privileges
  atta*$ 6! %>es 0! >ticles ( 9corpor,n
  or ! directors 9 a3ord.e )! corporate
  law (! "picul> jurisdic;n4 ,any *anges
  9 ! basic rel,n%ips 2t "o class (
  %>ehold] & ano!r1 & "o class (
  %>ehold] &! corpor,n1 usu,y
  necessitate am5d;ts 6!
--------------------------------------#c
  >ticles ( 9corpor,n4 ,if am5d;ts >e
  made ) respect 6au?oriz$ b unissu$
  capital /ock1 actual %>ehold]
  rel,n%ips >e n 9volv$ & 4posi;ns _c
  >ise4
#aj4 ,": "! is only "o class ( %>e issu$
  or ": ! hold+s ( ea* %>ehold]s 9 ea*
  class >e 9 ! same propor;n1 any *ange
  9 ! "rs atta*+ 6a class does n alt] _!
  relative 9t]e/s 9 ! corpor,n4 ,?us1 no
  4posi;n is 3sid]$ 6>ise except 9
  circum/.es describ$ 9 #b abv4       #f
               ,,it-#ddh             a#c
#aa4 ,9 "s 9/.es1 ! t]ms & 3di;ns ( an
  issue ( %>es w provide = an am5d;t 6xs
  [n t]ms )9 limits4 ,": s* a p[] is
  ex]cis$ 7:e!r xs au?oriz,n c 2 e6ect$
  0! ,bo>d ( ,directors act+ al"o or
  :e!r approval (! "picul> class (
  %>ehold]s is requir$71 no 4posi;n is
  9volv$1 2c ! possibil;y ( s* a *ange 0
  alw 9h]5t 9 xs bundle ( "rs4
#ab4 ,a %>ehold] frequ5tly 7b n
  necess>ily7 4poses (a %>e 9 a corpor,n
  :5 ! corpor,n reduces ! pd-up capital
  9 respect ( t %>e4 ,a reduc;n 9 pd-up
  capital t 9volves ! redemp;n 7see #b
  abv7 or c.ell,n (a %>e necess>ily
  gives rise 6a 4posi;n 9 ! h&s (! hold]
  0virtue ( clause #ed7c77;ii77,a74 ,9
  o!r cases x is nec 6exam9e ! hold]'s
  economic 9t]e/ 9 ! corpor,n 2f & af !
  reduc;n 9 ord] 6e/abli% :e!r or n a
  4posi;n has o3urr$4
#ac4 ,9 ! case (a reduc;n 9 pd-up
  capital relat$ 6a pref]r$ %>e 7z def9$
  9 subsec;n #bdh7#a771 ! hold]'s     #g
               ,,it-#ddh             b#c
  def9$ 5title;t on 4solu;n (! corpor,n
  is norm,y reduc$4 ,": ? o3urs1 ? *ange
  9 ! hold]'s economic 9t]e/ 9 !
  corpor,n is usu,y 3sid]$ 6give rise 6a
  4posi;n ( "o prop]ty &! acquisi;n (
  ano!r4 ,9 ! case (a -mon %>e 7z def9$
  9 subsec;n #bdh7#a771 ! hold]'s
  5title;t on 4solu;n1 2+ a propor;nate
  "picip,n 9 ! residual assets (!
  corpor,n1 is un*ang$4 ,?us1 a -mon
  %>ehold]'s economic 9t]e/ 9 ! corpor,n
  is usu,y n alt]$ 0a reduc;n 9 ! pd-up
  capital attribut$ 6-mon %>es & no
  4posi;n o3urs4
#ad4 ,foll[+ >e examples ( *anges t >e
  norm,y 3sid]$ 6be ( su6ici5t sub/.e
  6be reg>d$ z 4posi;ns3
  7a7 a *ange 9 vot+ "rs atta*$ 6%>es t
    e6ects a *ange 9 ! vot+ 3trol (!
    corpor,n2
  7b7 a *ange 9 a def9$ 5title;t 7e4g4 a
    *ange 9 p> value7 6%>e 9 ! assets (a
    corpor,n ^u 4solu;n 7pref]r$ %>es
    only72                            #h
               ,,it-#ddh             c#c
  7c7 ! giv+ up or ! a4i;n (a prior;y "r
    6%>e 9 ! 4tribu;n ( assets (!
    corpor,n ^u 4solu;n2
--------------------------------------#d
  7d7 ! a4i;n or dele;n (a "r atta*+ 6a
    class ( %>e t provides = "picip,n 9
    divid5d 5title;ts 2y a fix$
    pref]5tial rate or am.t2
  7e7 a *ange f a cumulative 6a non-
    cumulative "r 6divid5ds or vice
    v]sa4
#ae4 ,foll[+ >e examples ( *anges t tak5
  s+ly >e n 3sid]$ 6be 4posi;ns3
  7a7 ! a4i;n (! "r 6elect a major;y (!
    directors (! corpor,n if1 at t "t1 !
    %>ehold]s ( t class >e alr 9 a
    posi;n 63trol ! elec;n ( directors2
  7b7 a *ange 9 ! numb] ( votes p] %>e
    if ! abil;y ( any "o %>ehold]
    69flu;e ! "d-to-"d a6airs (!
    corpor,n is nei 5h.ed nor impair$
    "!by2
  
                                      #i
               ,,it-#ddh             a#d
  7c7 ! giv+ up ( 3t+5t vot+ "rs :1 9 !
    ev5t !y 7 ex]cis$1 wd n 2 ( su6ici5t
    numb] 63trol ! a6airs (! corpor,n2
  7d7 re/ric;ns a4$ or remov$ 3c]n+
    transf] ( %>es2
  7e7 ! a4i;n (a "r ( redemp;n 9 fav\r
    (! corpor,n2
  7f7 /ocks splits or 3solid,ns 7see
    ,,it-#fe72
  7g7 a *ange ( %>es ) p> value 6%>es
    )\t p> value or vice v]sa1 provid$ t
    "! is no *ange 9 any pre-set
    5title;ts 6divid5ds &/or 4tribu;n (
    assets ^u 4solu;n2
  7h7 a *ange 9 rank+ 3c]n+ pref];e
    f1tures1 7e4g4 f/ pref];e 6second
    pref];e72
  7i7 an 9cr1se or decr1se 9 ! am.t or
    rate (a fix$ divid5d 5title;t4
#af4 ,a -b9,n ( *anges describ$ 9 #ae
  abv1 :e!r o3urr+ simultane\sly or 9 a
  s]ies1 may1 9 appropriate circum/.es1
  give rise 6a 4posi;n4
                                     #aj