FAQs on Exempt Distributions
Can I file Form 45-106F1 or Form 45-106F6 by fax?
You must file your report electronically using eServices. Annual filings for investment funds must be filed by paper. Refer to: BCI 13-502 and Companion Policy 13-502CP.
Are filed copies of Form 45-106F1, Forms 45-106F6 and offering memoranda available on the BCSC website?
Exempt distribution reports (Form 45-106F1 and Form 45-106F6) and offering memoranda are available on our website. Former distribution reports (Form 45-902F and Form 20) have been removed from our website to protect the privacy of purchasers who are not insiders of the issuer. Our website does contain a summary of distribution exemptions derived from Forms 45-103F4 as well as the former distribution report Forms 45-902F and Form 20.
Can I file a Form 45-106F1 or 45-106F6 - Report of Exempt Distribution - with more than one distribution date?
You can only file 45-106F1 or 45-106F6 with more than one distribution date if all sales take place within a 10-day period and the report is filed within 10 days of the first sale. Reference: BCI 13-502.
Can I file Form 45-106F1 or Form 45-106F6 (Report of Exempt Distribution) on a confidential basis?
You may request information be held in confidence by making an application under section 169(4) of the Securities Act .
Applications for confidentiality under section 169(4) should be directed to our Corporate Finance Division, Attention: Director, Corporate Finance. These applications must be made under the Exemption Application Process procedures. To ensure residential addresses, phone numbers and e-mail addresses of the purchasers do not appear on our website, make sure the schedule to Form 45-106F1 is filed as a separate attachment. If you are submitting the BC Form 45-106F6, ensure schedule I and schedule II are filed as separate attachments. Please contact Financial Reporting at firstname.lastname@example.org prior to submitting the report on BCSC eServices so we can make the report private.
Can I file Form 45-106F1 or Form 45-106F6, offering memoranda, and related technical reports, or pay filing fees, on SEDAR?
You must file the Form 45-106F1 or Form 45-106F6, your offering memorandum (if not previously filed), and the consent of any person who prepared, or assisted in preparing, the technical report online through our eServices filing system. You cannot file Form 45-106F1 or Form 45-106F6 (Report of Exempt Distribution), or your offering memorandum on SEDAR. If you are a Reporting Issuer, you must file a copy of your technical report on SEDAR . If you are a Non-Reporting Issuer, you must file your technical report electronically through eServices. If you have previously filed a current NI 43-101 technical report on SEDAR, please tell us the project number when you make your filing. You are required to pay your filing fee online by a major credit card or electronic funds transfer (EFT). Reference: BCI 13-502.
Can I still use the $97,000 exemption for distributions?
No, it has been replaced with the minimum amount investment exemption in section 2.10 of NI 45-106. That exemption requires the purchaser to be paying not less than $150,000 in cash or cheque at the time of the trade.
Do I need to file Form 45-106F1 or Form 45-106F6 for distributions by non-British Columbia companies?
1. If your company has a substantial connection with British Columbia (see connecting factors), you need to provide information on the sale of all securities, including the BC exemption you used, regardless of where the purchaser lives.
- If you compensate a finder in connection with any distribution to any of the purchasers, you need to provide information on the compensation. If you give the finder securities as compensation, you need to provide the BC exemption you used, regardless of where the finder is from.
2. If your company does not have a substantial connection with British Columbia, you must file the Form 45-106F1 or Form 45-106F6 (Report Of Exempt Distribution) for all securities sold to British Columbia residents. You need not include any information on sales to persons who are not British Columbia residents.
- If you compensate a finder in connection with a BC resident, you need to provide information on the compensation to the finder. Reference: BCI 72-702.
Do I need to file Form 45-106F1 or Form 45-106F6 for distributions under a Commission order?
You must file a Form 45-106F1 or Form 45-106F6 (Report of Exempt Distribution) if your company distributes securities under a Commission order, but only if the order makes the filing of a Form 45-106F1 or Form 45-106F6 a condition of the exemption.
Do I need to file Form 45-106F1 or Form 45-106F6 if I am reselling securities or converting warrants, special warrants, debentures, etc.?
You do not need to file a Form 45-106F1 or Form 45-106F6 to resell securities, or when warrants, special warrants, or debentures are converted, as long as the company that issued the securities filed the form on the initial sale of securities. If a company distributes a security under the exemption in section 2.42(1)(b) of NI 45-106 for the conversion, exchange, or exercise of previously issued securities of the company (such as options or warrants), the company must file the written notice required by section 2.42(2)(a) of NI 45-106 prior to the distribution. The written notice must state the date, amount, nature and conditions of the trade. The BCSC will not make the filed notice public. There is no fee for filing this notice. References: NI 45-102.
How do I report the "proceeds" for non-cash transactions for calculating the filing fees?
The fee is based on the "fair value" of the assets acquired, securities exchanged or debt settled. Source: Companion Policy 45-106CP, s. 4.3 - Where securities are issued for non-cash consideration such as assets or resource properties, it is the responsibility of the issuer and its board of directors to determine the fair market value of the assets or resource properties and to retain records to demonstrate how that fair market value was determined. In some situations, cash assets that make up working capital could also be considered in the total calculation of the fair market value.
How do I request copies of public exempt distribution disclosure documents?
Anyone who cannot come to our office because of distance or ability may request a copy of the public exempt distribution disclosure documents in the following ways:
- By e-mailing a signed Request for public exempt distribution disclosure and consent form and a copy of your driver's license to email@example.com.
- By contacting us at 604-899-6500 between the hours of 8:00 am to 4:30 pm to make your request. You will be required to complete a Request for public exempt distribution disclosure and consent form and include a copy of your driver's license before we can process your request.
- By sending a request by fax to 604-899-6506 (Attention: Financial Reporting) or by mail. Include a completed Request for public exempt distribution disclosure and consent form and include a copy of your driver's license.
After receiving your request, we will respond within 10 business days with an electronic copy in PDF of the requested documents by e-mail or mail. There is a fee of $0.50 per page for a copy of a record in the Commission's public file. See item 23 of BC Form 11-901F Securities Regulation Fee Checklist.
- For a money market fund, as defined in NI 81-102 0.01% of the total dollar value in Canadian funds of proceeds realized from the distribution of securities to purchasers who reside in British Columbia.
- For all other exempt distributions: the greater of $100.00 or 0.03% of all securities sold to purchasers who reside in British Columbia. For example, if $3,000,000 of securities were distributed to BC residents your fee would be $900 ($3,000,000 x 0.03%)
Fees are not payable on securities sold to purchasers who are not residents of British Columbia (except for the $100 minimum filing fee). Reference: BC Form 11-901F Item 16 (Fee Checklist)
What exempt distributions require a company to file a Form 45-106F1 or Form 45-106F6 report?
Your company is required to file a Form 45-106F1 or Form 45-106F6 report when it sells securities under the following exemptions:
- National Instrument 45-106 (sections 2.3(1), 2.5(1), 2.9(1) or (2), 2.10(1), 2.12, 2.13, 2.14, 2.19, 2.30 and 5.2, or if applicable,
- An order under section 76 of the Securities Act .
You must also file a Form 45-106F1 or Form 45-106F6 report when you sell securities under the following local instruments:
- BCI 45-504 Trades to Trust Companies, Insurers and Portfolio Managers Outside British Columbia
- BCI 45-529 Bonus or Finder's Fee
- BCI 72-503 Distribution of Securities Outside of British Columbia
- BCI 72-504 Distribution of Eurobonds
National Instrument 45-106 was amended and new BC Form 45-106F6 came effective October 3, 2011. National Instrument 45-106 and the Form 45-106F1 report were amended effective September 28, 2009. Sections 74(2) of the BC Securities Act, Section 139 of the BC Securities Rules were repealed effective September 28, 2009. The forms and offering memorandum specified in MI 45-103 expired November 30, 2005. For more information, refer to: BCI 13-502 Electronic Filing of Reports of Exempt Distribution.
What exempt distributions require a company to file a Form 45-505F1 and Form 45-505F2?
Your company must determine if it qualifies to use BC Instrument 45-505. If your company is qualified to use BCI 45-505, your company must file Form 45-505F1 by paper. If your company sold securities, your company must file a Form 45-505F2 by paper.
When am I required to file Form 45-106F1 or Form 45-106F6?
You must file the Form 45-106F1 or Form 45-106F6 Report of Exempt Distribution on or before the 10th day after completing each distribution (sale of security) online through BCSC eServices. For example, if you complete a distribution on February 1, you must file a Form 45-106F1 by February 11. If you complete a further sale on February 15, you must file another report by February 25. If an investment fund who files reports on annual basis for any distributions other than NI 45-106, s. 2.3, s. 2.19 and/or s. 2.10, you must file these distributions for every 10 day period as required under NI 45-106, s. 6.1 online through BCSC eServices. There are five exceptions and the exceptions require the report by paper:
- For distributions under NI 45-106, s2.19, trades by an investment fund to existing security holders: you are required to file your Form 45-106F1 or Form 45-106F6 within 30 days after the issuer's financial year end.
- For distributions under NI 45-106, s. 2.3(1), trades by an investment fund to accredited investors: you are required to file your Form 45-106F1 or Form 45-106F6 within 30 days after the issuer's financial year end.
- For distributions under NI 45-106, s.2.10(1), trades by an investment fund to purchasers who purchased a minimum amount of $150,000: you are required to file your Form 45-106F1 or Form 45-106F6 within 30 days after the issuer's financial year end.
- For distributions by eligible pooled funds under BCI 45-505 you have the option of filing a Form 45-505F2 by January 31 for trades made during the prior calendar year.
For more information: NI 45-106, 6.1, NI 45-106, s.6.2(2), and BCI 13-502.
When must I file an offering memorandum?
If you use the exemption in Part 2.9 (3) or (4) of NI 45-106 (Capital Raising Exemptions), you must file an offering memorandum at the same time you file your first distribution report on BCSC eServices. If you voluntarily give an offering memorandum or other form of disclosure document to purchasers who are buying securities under an exemption other than Part 2.9 (3) or (4), you do not have to file the offering memorandum or other disclosure documents with us. You should not file your offering memorandum before you sell securities. Refer to: NI 45-106 s. 2.16 and BCI 13-502.
Who can I contact with questions about Form 45-106F1 or Form 45-106F6?
If you have questions on completing Form 45-106F1 or Form 45-106F6 Report of Exempt Distribution, please contact Financial Reporting, Corporate Finance Group by email firstname.lastname@example.org
When an issuer files a Short Form Offering Document with the TSX Venture Exchange, what materials must be filed with the Commission?
Under section 5.2 of National Instrument 45-106 Prospectus and Registration Exemptions, the Commission grants an exemption from the prospectus requirement to an issuer that completes a short form offering in compliance with NI 45-106. The exemption in NI 45-106 is only available if the issuer has filed all documents required to be filed under securities legislation (e.g., continuous disclosure documents) with the Commission (see Part 5 of the instrument) The issuer must also file a report of exempt distribution within 10 days of the distribution.
When do I need to file a technical report (Form 43-101F1) with an offering memorandum?
If your company is a mining or exploration company, you must file a current technical report (Form 43-101F1) for each of the mineral properties that are material to your company. You must file the technical reports at the same time you file or make the offering memorandum available to the public in Canada. If you previously filed a technical report that is still current, you do not have to file a new technical report. If you have any questions on technical reports contact our Corporate Finance division.
What do I do if I can't provide the phone number of the purchaser when filling out Form 45-106F1 or Form 45-106F6?
If after making a reasonable effort to obtain the purchaser's phone number you are unable to do so, you may complete the schedule to Form 45-106F1 or Item 8 and the schedule II to the Form 45-106F6 (Report of Exempt Distribution), by indicating the information is not available.