45-325 Filing Requirement and Fee Payable for Exempt Distributions involving Fully Managed Accounts [CSA Staff Notice]
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This
notice is intended to clarify when Form 45-106F1 Report of Exempt Distribution (Form
45-106F1) of
National Instrument 45-106 Prospectus
Exemptions (NI 45-106) is
required to be filed, and fees paid, for exempt distributions involving fully
managed accounts.
Background
In
2016, the Canadian Securities Administrators (the CSA) introduced a streamlined and harmonized version of Form
45-106F1 as part of an effort to reduce the compliance burden for issuers and
underwriters distributing securities under prospectus exemptions, while
ensuring Form 45-106F1 continues to provide securities regulators with the
necessary information to facilitate more effective regulatory oversight of the
exempt market and improve analysis for policy development purposes.
Among
other changes made, the reporting of exempt distributions involving fully managed
accounts was simplified to reduce regulatory burden on issuers and
underwriters. In all
jurisdictions, Form 45-106F1 only requires issuers and underwriters to provide
information on the trust company, trust corporation or registered adviser who
had purchased securities on behalf of a fully managed account in item 7 and Schedule
1 and no longer requires information about the beneficial owners of the fully
managed account.
While
Form 45-106F1 has been harmonized, the requirement to file and pay filing fees
for Form 45-106F1 continues to be governed by the securities legislation of
each CSA jurisdiction.
Reporting requirement for exempt distributions involving fully managed
accounts Issuers and underwriters who rely on the accredited
investor prospectus exemption
(the AI Exemption) in section 2.3 of
NI 45-106 to distribute securities are required to
file a Form 45-106F1 within a prescribed timeframe. An accredited investor includes:
- a trust company or trust corporation registered or authorized to carry
on business under the Trust and Loan
Companies Act (Canada) or under comparable legislation in a jurisdiction of
Canada or a foreign jurisdiction, acting on behalf of a fully managed account
managed by the trust company or trust corporation; and
- a person
acting on behalf of a fully managed account managed by that person, if that
person is registered or authorized to carry on business as an adviser or the
equivalent under the securities legislation of a jurisdiction of Canada or a
foreign issuer.
Section 2.3(2) of NI 45-106 states that for the
purpose of the AI Exemption, a trust company or trust corporation described in
paragraph (p) of the definition of “accredited investor” in section 1.1 of NI
45-106 is deemed to be purchasing as principal.
Similarly, section 2.3(4) of NI 45-106 states that for the purpose of
the AI Exemption, a person described in paragraph (q) of the definition of
“accredited investor” in section 1.1 of NI 45-106 is deemed to be purchasing as
principal. Instruction 4 of Form
45-106F1 requires issuers and
underwriters to provide information on the trust company, trust corporation or
registered adviser who had purchased securities on behalf of a fully managed
account and not the beneficial owners of the fully managed account.
Filing
and Fee Requirements
In accordance with Instruction 1 of Form 45-106F1, if a distribution is
made in more than one jurisdiction of Canada, the issuer may complete a single Form
45-106F1 and file it in each jurisdiction of Canada in which the distribution
occurs. In order to determine the fee
payable in each jurisdiction, please refer to Annex A.
In each jurisdiction other than Manitoba, Québecand
Saskatchewan, the requirement to file Form 45-106F1 in respect of a
distribution involving a fully managed account is based on the location of the
trust company, trust corporation or registered adviser deemed to be purchasing
the securities as principal in accordance with section 2.3(2) or 2.3(4) of NI
45-106, as applicable. The requirement
to pay a fee in these jurisdictions is triggered by the requirement to file Form
45-106F1. Accordingly, there is no requirement
to file Form 45-106F1 or to pay a fee in these jurisdictions based on the
location of the beneficial owner of a fully managed account.
In Manitoba andQuébec, the
requirements to file Form 45-106F1 and pay fees are based on the location of
the beneficial owner of a fully managed account. A Form 45-106F1 is not required to be filed
in these jurisdictions if only the trust company, trust corporation or
registered adviser who had purchased securities on behalf of a fully managed
account is located in the jurisdiction and there are no beneficial owners in
the jurisdiction. Because Form 45-106F1 does
not require issuers to provide information on the beneficial owners of fully
managed accounts, the regulators in these jurisdictions require that issuers
file an accompanying letter with the Form 45-106F1 stating the gross value of
securities distributed to beneficial owners located in those jurisdictions.
In Saskatchewan, the requirement to file Form 45-106F1 and pay a fee is
based on the location of the distribution.
This could mean that the form should be filed in Saskatchewan if the trust
company, trust corporation or registered adviser who had purchased securities
on behalf of a fully managed account and/or the beneficial owner of a fully
managed account is located in Saskatchewan.
The Financial and Consumer Affairs Authority of Saskatchewan has issued
blanket relief to waive the filing requirements in respect of a distribution to
the beneficial owner of a fully managed account where the trust company, trust
corporation or registered adviser who had purchased securities on behalf of a fully
managed account is not located in Saskatchewan.
As no filing will be required in these cases, no fee is triggered.
Questions
Please refer your
questions to any of the following:
Jo-Anne Matear Manager, Corporate Finance Branch Ontario Securities Commission 416-593-2323 jmatear@osc.gov.on.ca
| Yan Kiu Chan Legal Counsel, Corporate Finance
Branch Ontario Securities Commission 416-204-8971 ychan@osc.gov.on.ca |
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Frederick Gerra Senior Legal Counsel,
Investment Funds and Structured Products Branch Ontario Securities
Commission 416-204-4956 fgerra@osc.gov.on.ca
| Kevin Yang Senior Research Analyst,
Strategy and Operations Branch Ontario Securities
Commission 416-204-8983 kyang@osc.gov.on.ca
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Gloria Tsang Senior Legal Counsel, Compliance and
Registrant Regulation Branch Ontario Securities Commission 416-593-8263 gtsang@osc.gov.on.ca
Jody-Ann Edman Assistant Manager, Financial Reporting British Columbia Securities Commission 604-899-6698 jedman@bcsc.bc.ca
Leslie Rose Senior Legal Counsel, Corporate Finance British Columbia Securities Commission 604-899-6654 lrose@bcsc.bc.ca
Sonne Udemgba Deputy
Director, Legal, Securities Division, Financial and Consumer Affairs Authority
of Saskatchewan 306-787-5879
sonne.udemgba@gov.sk.ca
Steven Weimer Team Lead, Compliance, Data &
Risk Alberta Securities Commission 403-355-9035 steven.weimer@asc.ca
Jack Jiang Securities Analyst, Corporate
Finance Nova Scotia Securities Commission 902-424-7059 jack.jiang@novascotia.ca
Renée Dyer Superintendent of Securities Office of the Superintendent of
Securities Service NL 709-729-4909 ReneeDyer@gov.nl.ca
Thomas Hall Superintendent of Securities Department of Justice Government of the Northwest
Territories 867-767-9305 tom_hall@gov.nt.ca | Gabriel Chénard Senior
Policy Analyst, Investment Funds Autorité des
marchés financiers 514 395-0337
ext : 4482 gabriel.chenard@lautorite.qc.ca
Kristina Beauclair Analyst,
Corporate Finance Autorité des
marchés financiers 514-395-0337 ext: 4397 kristina.beauclair@lautorite.qc.ca
Victoria Steeves Senior Legal Counsel, Corporate
Finance British Columbia Securities
Commission 604-899-6791 vsteeves@bcsc.bc.ca
Wayne Bridgeman Deputy Director, Corporate Finance Manitoba Securities Commission 204-945-4905 wayne.bridgeman@gov.mb.ca
Ella-Jane Loomis Senior Legal Counsel, Securities Financial and Consumer Services
Commission (New Brunswick) 506-453-6591 ella-jane.loomis@fcnb.ca
Steven Dowling Acting Director Superintendent of Securities Government of Prince Edward Island 902-368-4551 sddowling@gov.pe.ca
Rhonda Horte Securities Officer Office of the Yukon Superintendent
of Securities 867-667-5466 rhonda.horte@gov.yk.ca
Jeff Mason Superintendent of Securities Department of Justice Government of Nunavut 867-975-6591 jmason@gov.nu.ca |
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