BCN 2004/16 - Adoption of National Instrument 51-102 Continuous Disclosure Obligations, National Instrument 71-102 Continuous Disclosure and Other Exemptions Relating to Foreign Issuers, and Related Instruments effective March 30, 2004 [BCN - Lapsed]

Concurrently Published:

• 51-102 - Continuous Disclosure Obligations [NI - Rescinded]
• 51-102CP - Continuous Disclosure Obligations [CP - Rescinded]
• 51-102F1 - Management’s Discussion & Analysis [F - Rescinded]
• 51-102F2 - Annual Information Form [F - Rescinded]
• 51-102F3 - Material Change Report [F - Rescinded]
• 51-102F4 - Business Acquisition Report [F - Rescinded]
• 51-102F5 - Information Circular [F - Rescinded]
• 51-102F6 - Statement of Executive Compensation [F - Rescinded]
• 51-506 - Exemption for Reporting Issuers from the Requirement to File Report [BCI - Rescinded]
• 51-507 - Venture issuers traded on certain foreign markets [BCI - Rescinded]
• 51-801 - Implementing National Instrument 51-102 Continuous Disclosure Obligations [BCI - Rescinded]
• 52-504 - Directors’ Review of Interim Financial Statements [BCI - Rescinded]
• 52-506 - Exemption for Finance Issuers from the Requirement to File Report [BCI - Rescinded]
• 52-507 - Audit Committee Review of Interim Financial Statements of Exchange Issuers [BCI - Rescinded]
• 71-102 - Continuous Disclosure and Other Exemptions Relating to Foreign Issuers [NI - Rescinded]
• NPS 31 - Change of Auditor of a Reporting Issuer that is an Investment Fund [NPS - Rescinded]
• NPS 51 - Changes in the Ending Date of a Financial Year and in Reporting Status of an Investment Fund [NPS - Rescinded]

Substance and purpose of the Instrument
The Canadian Securities Administrators (CSA) have developed a nationally harmonized set of continuous disclosure (CD) requirements for reporting issuers, other than investment funds. The CD requirements are set out in

National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102),
Form 51-102F1Management’s Discussion & Analysis,
Form 51-102F2 Annual Information Form,
Form 51-102F3 Material Change Report,
Form 51-102F4 Business Acquisition Report,
Form 51-102F5 Information Circular,
Form 51-102F6 Statement of Executive Compensation (collectively, the Forms), and
Companion Policy 51-102CP Continuous Disclosure Obligations (NI 51-102CP).

NI 51-102 and the Forms are together referred to as the NI 51-102 Instrument.

The NI 51-102 Instrument

• harmonizes CD requirements among Canadian jurisdictions;
• replaces most existing local CD requirements;
• enhances the consistency of disclosure in the primary and secondary securities markets; and
• facilitates capital-raising initiatives such as an integrated disclosure system.

NI 51-102 sets out the obligations of reporting issuers, other than investment funds, with respect to financial statements, management’s discussion and analysis (MD&A), annual information forms (AIFs), material change reporting, information circulars, proxies and proxy solicitation, restricted share disclosure, and certain other CD-related matters. It prescribes the Forms.

NI 51-102 does not address non-issuer filing obligations, except in the case of persons who solicit proxies from securityholders of reporting issuers, and exemptions from insider reporting in certain circumstances. NI 51-102 also does not address CD obligations for investment funds.

The substance and purpose of NI 51-102CP is to state our views on the interpretation and application of the NI 51-102 Instrument.

The CSA have also developed a harmonized set of exemptions from certain CD and other requirements for foreign reporting issuers. The exemptions are contained in National Instrument 71-102 Continuous Disclosure and Other Exemptions Relating to Foreign Issuers (NI 71-102). Companion Policy 71-102CP Continuous Disclosure and Other Exemptions Relating to Foreign Issuers provides guidance on interpreting NI 71-102.

Prior publications
We first published the NI 51-102 Instrument and NI 71-102 for comment on June 21, 2002. After considering the comments, we revised both instruments and their companion policies and published the revised versions for comment on June 20, 2003. The comment period expired in August 2003. On December 19, 2003, we published advance notice that, subject to government approval, we expected to adopt the NI 51-102 Instrument as rules effective March 30, 2004 (BCN 2003/56). On December 19, 2003 we also published advance notice that we expected to adopt NI 71-102 as an exemption order effective March 30, 2004 (BCN 2003/57).

Consequential amendments
National Amendments
Amendments that have been made to National Instrument 44-101 Short Form Prospectus Distributions (NI 44-101) to replace Forms 44-101F1 AIF and 44-101F2 MD&A and to amend Companion Policy 44-101CP are set out in Appendix A to this Notice. As the AIF and MD&A requirements in the NI 51-102 Instrument apply only for financial years starting on or after January 1, 2004, the amendments include transitional provisions.

Amendments that have been made to National Instrument 62-102 Disclosure of Outstanding Share Data and National Instrument 62-103 The Early Warning System and Related Take-Over Bid and Insider Reporting Issues are set out in Appendix B to this Notice. As the financial statement and MD&A requirements in the NI 51-102 Instrument apply only for financial years starting on or after January 1, 2004, the amendments include transitional provisions.

National Policy No. 31 Change of Auditor of a Reporting Issuer and National Policy No. 51 Changes in the Ending Date of a Financial Year and in Reporting Status are revised effective March 30, 2004 so they apply only to reporting issuers that are investment funds. The amendments are set out in Appendix C to this Notice.

Local Amendments
We are amending the Securities Rules and amending or repealing certain local instruments in conjunction with implementing the NI 51-102 Instrument. In particular, BC Instrument 52-504 Directors Review of Interim Financial Statements will be replaced, and the following BC Instruments will be revoked:

BC Instrument 51-506 Exemption for Reporting Issuers from the Requirement to File Report
BC Instrument 52-506 Exemption for Finance Issuers from the Requirement to File Report
BC Instrument 52-507 Audit Committee Review of Interim Financial Statements of Exchange Issuers

The amendments to the Securities Rules are set out in Appendix D.

We are also implementing two new instruments in connection with the NI 51-102 Instrument. BC Instrument 51-801 Implementing National Instrument 51-102 Continuous Disclosure Obligations provides exemptions from

certain requirements in the Securities Act and Securities Rules, provided the issuer complies with NI 51-102, and
Parts 8, 10 and 12 of NI 51-102

BC Instrument 51-507 Issuers traded on certain foreign markets - Order under National Instrument 51-102 Continuous Disclosure Obligations provides an exemption from the requirement in the definition of venture issuer in NI 51-102 that the issuer not have its securities listed or quoted on a market outside of Canada and the United States. The exemption applies to issuers with securities traded on the Regulated Unofficial Market of the Frankfurt Stock Exchange.

Questions
You may refer questions to:

Rosann Youck
Senior Legal Counsel
Legal and Market Initiatives
British Columbia Securities Commission
(604) 899-6656
(800) 373-6393 (in B.C. and Alberta)
ryouck@bcsc.bc.ca

March 30, 2004




Douglas M. Hyndman
Chair


Ref: National Instrument 51-102 Continuous Disclosure Obligations
Form 51-102F1Management’s Discussion & Analysis
Form 51-102F2 Annual Information Form
Form 51-102F3 Material Change Report
Form 51-102F4 Business Acquisition Report
Form 51-102F5 Information Circular
Form 51-102F6 Statement of Executive Compensation
Companion Policy 51-102CP Continuous Disclosure Obligations
National Instrument 44-101 Short Form Prospectus Distributions
Form 44-101F1 AIF
Form 44-101F2 MD&A
National Instrument 62-102 Disclosure of Outstanding Share Data
National Instrument 62-103 The Early Warning System and Related Take-Over Bid and Insider Reporting Issues
National Policy No. 31 Change of Auditor of a Reporting Issuer
National Policy No. 51 Changes in the Ending Date of a Financial Year and in Reporting Status
Securities Rules
BC Instrument 52-504 Directors Review of Interim Financial Statements
BC Instrument 51-506 Exemption for Reporting Issuers from the Requirement to File Report
BC Instrument 52-506 Exemption for Finance Issuers from the Requirement to File Report
BC Instrument 52-507 Audit Committee Review of Interim Financial Statements of Exchange Issuers
BC Instrument 51-801 Implementing National Instrument 51-102 Continuous Disclosure Obligations
BC Instrument 51-507 Issuers traded on certain foreign markets - Order under National Instrument 51-102 Continuous Disclosure Obligations

This Notice may refer to other documents. These documents can be found at the B.C. Securities Commission public website at www.bcsc.bc.ca in the Commission Documents database or the Historical Documents database.

Part 1 Amendments to National Instrument 44-101

1.1 Amendments to Part 1 of NI 44-101 -Part 1 of National Instrument 44-101 is amended by,

(a) in section 1.1, repealing the definition of“AIF”and substituting the following:

“AIF” means an annual information form

(a) in Form 51-102F2,

(b) in Form 51-102F2 or Form 44-101F1 AIF,if the annual information form was filed in respect of financial years beginning before January 1, 2004, or

(c) in the form referred to in section 3.4;

(b) in the definition of “current AIF” in section 1.1, adding “, Form 10-KSB,” after the words “Form 10-K”, wherever they appear;

(c) in section 1.1, adding immediately after the definition of“foreign GAAS”and immediately before the definition of“44-101 regulator”the following:

“Form 51-102F1” means Form 51-102F1 Management’s Discussion and Analysis;

“Form 51-102F2” means Form 51-102F2 Annual Information Form;

(d) in section 1.1, repealing the definition of“MD&A”and substituting the following:

“MD&A” means the management’s discussion and analysis of financial condition and results of operations of an issuer,

(a) in Form 51-102F1, or

(b) for financial years beginning before January 1, 2004,

(i) in Form 51-102F1, or

(ii) required to be disclosed in an AIF in respect of financial years beginning before January 1, 2004;

(e) in section 1.1, adding immediately after the definition of“MRRS”and immediately before the definition of“non-convertible”the following:

“NI 51-102” means National Instrument 51-102 Continuous Disclosure Obligations;

1.2 Amendments to Part 3 of NI 44-101 -Part 3 of National Instrument 44-101 is amended by

(a) repealing subsection 3.1(1) and substituting the following:

(1) An issuer filing an initial AIF under this Instrument shall file the AIF

(a) in Form 51-102F2;

(b) in respect of financial years beginning before January 1, 2004, in Form 51-102F2 or Form 44-101F1; or

(c) in the form referred to in section 3.4.

(b) repealing subsection 3.2(1) and substituting the following:

(1) An issuer filing a renewal AIF under this Instrument shall file the AIF

(a) in Form 51-102F2;

(b) in respect of financial years beginning before January 1, 2004, in Form 51-102F2 or Form 44-101F1; or

(c) in the form referred to in section 3.4.

(c) repealing subsection 3.2(5) and substituting the following:

(5) Upon receipt of a notice from the 44-101 regulator that its renewal AIF is being reviewed, an issuer shall promptly file the renewal AIF again, in all jurisdictions in which the renewal AIF was filed, with

(a) the following statement added in bold type to the cover page of the renewal AIF, if the renewal AIF is in Form 51-102F2, until the issuer is notified that the review has been completed:

This annual information form is currently under review by the provincial and territorial securities regulatory authorities of one or more jurisdictions. Information contained in this form is subject to change.

or

(b) the statement required under Item 1.2 of Form 44-101F1, if the renewal AIF is in Form 44-101F1.

(d) repealing subsection 3.3(2) and substituting the following:

(2) An issuer that files an AIF under this Instrument shall file an undertaking with the regulator to the effect that, when the securities of the issuer are in the course of a distribution under a preliminary short form prospectus or a short form prospectus, the issuer will provide to any person or company, upon request to the secretary of the issuer,

(a) one copy of the AIF of the issuer, together with one copy of any document, or the pertinent pages of any document, incorporated by reference in the AIF,

(b) one copy of the financial statements of the issuer for its most recently completed financial year for which financial statements have been filed together with the accompanying report of the auditor and one copy of the most recent interim financial statements of the issuer that have been filed, if any, for any period after the end of its most recently completed financial year,

(c) one copy of the information circular of the issuer in respect of its most recent annual meeting of shareholders that involved the election of directors, and

(d) one copy of any other documents that are incorporated by reference into the preliminary short form prospectus or the short form prospectus and are not required to be provided under paragraphs (a), (b) or (c).

(e) repealing section 3.4 and substituting the following:

3.4 Alternative Forms of AIF - An issuer that

(a) has a class of securities registered under section 12 of the 1934 Act or is required to file reports under section 15(d) of the 1934 Act, and

(b) is not registered or required to be registered as an investment company under the Investment Company Act of 1940 of the United States of America,

may file an AIF in the form of an annual report or transition report under the 1934 Act on Form 10-K, Form 10-KSB or on Form 20-F.

Part 2 Amendments to Companion Policy 44-101CP

2.1 Part 1 of Companion Policy 44-101CP is amended by,

(a) in section 1.7, adding the following as new subsection (1):

(1) AIF - The term “AIF” is defined to mean either a Form 51-102F2 or Form 44-101F1 AIF, depending on when the AIF is filed. Issuers may choose to file their annual information forms for financial years beginning before January 1, 2004 in either Form 51-102F2 or Form 44-101F1. For financial years beginning on or after January 1, 2004, issuers must use Form 51-102F2.

(b) renumbering subsections 1.7(1) to (6) assubsections 1.7(2) to (7).

2.2 Part 8 of Companion Policy 44-101CP is amended by,

(a) in subsection 8.1(1),

(i) striking the words“Item 4.2 of Form 44-101F1 specifies”and substituting “Item 4.2 of Form 44-101F1 and section 5.3 of Form 51-102F2 specify” ; and

(ii) striking the words“Form 44-101F1 leaves”in the second sentence and substituting “Form 44-101F1 and Form 51-102F2 leave” ;

(b) in subsection 8.1(2),

(i) striking the words“Item 4.2(b)(i) of Form 44-101F1 AIF requires”and substituting “Item 4.2(b)(i) of Form 44-101F1 AIF and section 5.3(2) of Form 51-102F2 require” ; and

(ii) striking the words“, the cash flows from which service the asset-backed securities”; and

(c) in section 8.2,

(i) adding the words “and Item 10 of Form 51-102F2” after the words“Item 8 of Form 44-101F1”wherever they appear; and

(ii) striking the word“requires”and substituting “require” .

Part 3 Revocation of Forms 44-101F1AIFand 44-101F2MD&A

3.1 Revocation of Form 44-101F1AIF - Form 44-101F1 AIF is revoked.

3.2 Revocation of Form 44-101F2MD&A - Form 44-101F2 MD&A is revoked.

Part 4 Amendments to Form 44-101F3Short Form Prospectus

4.1Item 10 of Form 44-101F3 Short Form Prospectus is repealed and the following substituted:

Item 10: Resource Property

10.1 Resource Property - If a material part of the proceeds of a distribution is to be expended on a particular resource property and if the current AIF does not contain the disclosure required under Item 4.3 or 4.4, as appropriate, of Form 44-101F1, or section 5.4 or 5.5, as appropriate, of Form 51-102F2, for the property or that disclosure is inadequate or incorrect due to changes, disclose the information required under section 5.4 or 5.5 of Form 51-102F2.

4.2Item 12 of Form 44-101F3 Short Form Prospectus is amended by

(a) striking subparagraph 12.1(1)7. and substituting the following:

7. MD&A relating to the issuer’s interim financial statements included in the short form prospectus.

(b) in subparagraph 12.1(1)8., adding the words “for financial years beginning before January 1, 2004,” after the words“information circulars or,”;

(c) striking subparagraph 12.1(3)(a) and substituting the following

(a) has filed an AIF in a form of current annual report on Form 10-K, Form 10-KSB or Form 20-F under the 1934 Act, as permitted under section 3.4 of National Instrument 44-101 and under NI 51-102.

(d) in subparagraph 12.2 4., adding the words “for financial years beginning before January 1, 2004,” after the words“information circulars or,”; and

(e) in clause 13.1(2)(b)(ii), striking the words“Form 10-K or Form 20-F”and substituting “Form 10-K, Form 10-KSB or Form 20-F” .

Part 5 Effective Date

5.1 Effective Date

(1) This Amendment, except for Part 3, comes into force on March 30, 2004.

(2) Part 3 of this Amendment comes into force on May 19, 2005.

Part 1 Amendment to National Instrument 62-102

1.1 Amendment to Part 3 of National Instrument 62-102 - Part 3 of National Instrument 62-102 is amended by adding the following as section 3.2:

3.2 Exemption for years beginning January 1, 2004 - This Instrument does not apply to financial years beginning on or after January 1, 2004.

Part 2 Revocation of National Instrument 62-102

2.1 Revocation of National Instrument 62-102 -National Instrument 62-102 is revoked.

Part 3 Effective Date

3.1 Effective Date

(1) This Amendment, except for Part 2, comes into force on March 30, 2004.

(2) Part 2 comes into force on May 19, 2005.

1.1 Amendment to Part 1 of National Instrument 62-103 - Subsection 1.1(1) of National Instrument 62-103 is amended by repealing paragraph (g) of the definition of“applicable provisions”.

1.2 Amendment to Part 2 of National Instrument 62-103 - Subsection 2.1(1) of National Instrument 62-103 is amended by adding the words “or section 5.4 of National Instrument 51-102 Continuous Disclosure Obligations,” after“section 2.1 of National Instrument 62-102Disclosure of Outstanding Share Data”.

Part 2 Effective Date

2.1 Effective Date - This Amendment comes into force on March 30, 2004.

1.1 Amendment to title of National Policy 31 -National Policy 31 is amended by adding “ that is an Investment Fund ” after “ Change of Auditor of a Reporting Issuer ”.

1.2 Amendment to Part 1 of National Policy 31- Section 1.1 of National Policy 31 is amended by adding “ that is an investment fund as defined in National Instrument 51-102 Continuous Disclosure Obligations” after “ reporting issuer ”.

1.3 Amendment to Part 2 of National Policy 31 - Part 2 of National Policy 31 is amended by renumbering sections 2.1 to 2.6 as sections 2.2 to 2.7, and adding the following as new section 2.1:

“ 2.1 This Policy Statement only applies to reporting issuers that are not subject to National Instrument 51-102 Continuous Disclosure Obligations. ”

2.2 Amendment to Part 1 of National Policy 51- The definition of “Filing Issuer” in Part 1 of National Policy 51 is amended by adding “ and that is an investment fund as defined in National Instrument 51-102 Continuous Disclosure Obligations” after “ Jurisdiction ”.

2.3 Amendment to Part 3 of National Policy 51 - Paragraph 3.1(1)(b) of National Policy 51 is amended by adding “ of a Filing Issuer ” after “ reporting status ”.

1Section 183 (1) is amended by adding “ of an investment fund ” after “ security holders ”.

2Section 184 is amended

(a) in subsection (1) by adding “ an investment fund that is ” before “ a reporting issuer is required to ” and by striking out “ the reporting issuer ” and substituting “ the investment fund ”,

(b) by repealing subsection (2), and

(c) in subsection (3) by striking out “ and report ”.