11-201 - Delivery of Documents by Electronic Means [NP - Rescinded]

Concurrently Published:

• BCN 2003/08 - Amendments to National Policy 11-201 Delivery of Documents by Electronic Means [BCN - Rescinded]

PART 1 GENERAL

1.1 Definitions

In this Policy

"delivered" means sent, delivered or otherwise communicated, and "deliver", "delivery" and similar words have corresponding meanings;

"delivery requirements" means the requirements in securities legislation that documents be delivered;

"electronic delivery" means the delivery of documents by facsimile, electronic mail, CD-ROM, diskette, the Internet or other electronic means;

“electronic signature” means electronic information that a person creates or adopts in order to execute or sign a document and that is in, attached to or associated with the document;

“proxy document” means a document relating to a meeting of a reporting issuer, and includes an information circular, a form of proxy, a request for voting instructions, and voting instructions;

"securities legislation" means the statutes and other instruments listed in Appendix B of National Instrument 14-101 Definitions;

"securities regulatory authorities" means the securities commissions and similar regulatory authorities listed in Appendix C of National Instrument 14-101 Definitions.

1.2 Purpose of this Policy

(2) Securities legislation contains many delivery requirements. In some cases, the method of delivery is mandated by legislation; for instance, delivery may be required to be made by “prepaid mail”. In many cases, however, the method of delivery is not mandated. In light of rapid technological developments, issues have arisen as to whether, or in what circumstances, delivery of documents by electronic means would satisfy the delivery requirements of securities legislation if the method of delivery is not mandated. The purpose of this Policy is to state the views of the securities regulatory authorities on these issues in light of the general policy goals referred to in subsection (1). These views are set out in Parts 2 and 3 of this Policy.

(3) Furthermore, securities legislation and securities directions contain provisions relating to the proxy solicitation process that have raised questions as to whether the electronic delivery of proxy documents is permitted, and whether proxy documents can be in electronic format. The securities regulatory authorities have identified two types of requirements in securities law that affect the use of proxy documents in electronic format:

1. Requirements in certain securities directions or securities legislation that

(a) a form of proxy or proxy be in written or printed form (the “written proxy requirements”); and

(b) a registered holder of voting securities vote or give a proxy in respect of such voting securities in accordance with any written voting instructions provided by the beneficial owner of such voting securities (the “written voting instructions requirements”) (collectively with the written proxy requirements, the “in writing requirements”).

2. Requirements in securities legislation that a proxy be executed (the “proxy execution requirements”).

 

Part 4 of this Policy states the views of the securities regulatory authorities on these issues.

1.3 Application of this Policy

(1) Subject to subsections (3) and (4), Parts 2 and 3 of this Policy apply to any documents required to be delivered under the delivery requirements. This includes prospectuses, financial statements, trade confirmations, account statements and proxy-related materials. Examples of documents that are not required by securities legislation to be delivered, and which are therefore not subject to Parts 2 and 3, are documents delivered by securityholders or investors to issuers or registrants, for instance, in connection with the return of completed proxies or voting instructions.

(2) For greater certainty, Parts 2 and 3 of this Policy apply in the circumstances described in subsection (1), and therefore apply to documents delivered by

(a) issuers, registrants or persons or companies acting on behalf of issuers or registrants, such as transfer agents or other service providers; and

(b) persons or companies required to send documents under National Instrument 54-101 Communication with Beneficial Owners of Securities of a Reporting Issuer, including depositories, participants in depositories, intermediaries and service providers to those persons or companies.

(4) This Policy does not apply to deliveries where the method of delivery is mandated by securities legislation and that method does not include electronic means. Market participants are also reminded that certain corporate law statutes may also impose requirements concerning the method of delivery in some circumstances, without permitting electronic means of delivery. For example, some statutes require the use of prepaid mail for the delivery of proxy-related materials. In addition, some corporate statutes may also restrict the use of proxy documents in electronic format. (5) This Policy does not apply to documents filed with or delivered by or to a securities regulatory authority or regulator.

1.4 No Waiver

This Policy addresses only the method of delivery of documents and issues relating to the delivery of documents, as well as the use of proxy documents in electronic format. This Policy does not address, and should not be construed as a waiver of, any requirements of securities legislation relating to content, accuracy, currency, amending of information or timing of delivery of documents or information. Deliverers are reminded that a document that is intended to be delivered by electronic delivery should not be less complete, timely, comprehensive or, if applicable, confidential than a paper version of the same document.

1.5 National Policy 47-201

Market participants are referred to the National Policy 47-201 Trading Securities Using the Internet and Other Electronic Means, which states the views of the securities regulatory authorities on issues relating to the use of the Internet and other electronic means of communication to facilitate trading in securities.

PART 2 ELECTRONIC DELIVERY OF DOCUMENTS

2.1 Basic Components of Electronic Delivery of Documents

(1) The securities regulatory authorities are of the view that electronic delivery of a document may be effected in a manner that satisfies the delivery requirements.

(2) There are four basic components to the electronic delivery of a document. Those components are as follows:

1. The recipient of the document receives notice that the document has been, or will be, sent electronically or otherwise electronically made available, as described in section 2.2.

2. The recipient of the document has easy access to the document, as described in section 2.3.

3. The deliverer of the document has evidence that the document has been delivered or otherwise made available to the recipient, as described in section 2.4.

4. The document that is received by the recipient is not different from the document delivered or made available by the deliverer, as described in section 2.6.

(a) the recipient will receive notice of the electronic delivery of the document;

(b) the recipient has the necessary technical ability and resources to access the document; and

(c) the recipient will actually receive the document.

2.2 Notice

(1) As stated in paragraph 1 of subsection 2.1(2), one of the basic components of electronic delivery of a document is that an intended recipient of the document have notice of the electronic delivery of the document. Notice can be effected in any manner, electronic or non-electronic, that advises the recipient of the proposed electronic delivery. Examples of ways that notice can be provided are electronic mail, telephone or communication in paper form.

(2) Some forms of electronic delivery, such as delivery by electronic mail, may not require a separate notice, as the transmission of the electronic mail delivery itself will be sufficient notice to a recipient. On the other hand, a deliverer intending to effect electronic delivery by placing a document on a website and permitting intended recipients to retrieve or download the document should not assume that the availability of the document will be known to recipients without separate notice of its availability being given.

(3) As described in section 2.1, it is recommended that a deliverer of a document obtain the consent of an intended recipient to electronic delivery, and deliver the document in accordance with the terms of the consent, in order to satisfy the notice component. The consent could set out the steps that the deliverer will take to give notice to the recipient that a document is being delivered by way of electronic delivery. If a deliverer intended to effect electronic delivery by placing a document on a website, the consent would indicate this fact and indicate how the deliverer would bring to the attention of the intended recipient that a document was available. Alternatively, the consent could evidence the agreement of the recipient to monitor the deliverer's website on a regular basis, thereby eliminating any need for the deliverer to provide separate notice to the recipient.

(4) It would be appropriate, in certain circumstances, for a deliverer to provide special or additional notice of the electronic delivery of a document to a recipient, even if the recipient has agreed, for example, to monitor a website on an ongoing basis as discussed in subsection (3). This special or additional notice may be appropriate, for example, in cases of special meetings.

2.3 Access

(1) As stated in paragraph 2 of subsection 2.1(2), one of the basic components of electronic delivery of a document is that the recipient of the document have easy access to the document. As noted above, it is recommended that a consent be used to ensure that the intended recipient can acknowledge possession of the necessary technical ability and resources to access the document.

(2) The securities regulatory authorities are of the view that there are certain aspects of access that are fundamental to electronic delivery and that cannot be waived by a consent. Regardless of the contents of a consent, the securities regulatory authorities would question the effectiveness of an electronic delivery if those components were not satisfied. Those components are described in subsections (3) to (6).

(3) Deliverers should take reasonable steps to ensure that electronic access to documents is not burdensome or overly complicated for recipients. In that respect, the electronic systems employed by deliverers should be sufficiently powerful to ensure quick downloading, appropriate formatting and general availability. For example, a deliverer delivering a document by posting it on a website should ensure that the server for the website is capable of handling the volume of recipients attempting to access the document.

(4) A document should remain available to intended recipients for whatever period of time is appropriate and relevant, given the nature of the document. For example, meeting materials delivered by way of posting to a website should remain posted until at least the date of the meeting.

1. A list of the types of documents that are electronically deliverable.

 

2. A detailed explanation of the electronic delivery process, including whether separate notice will be provided and, if so, how and when that notice will be provided.

3. Technical requirements for proper electronic retrieval of a document.

4. Software requirements for proper viewing of a document.

5. Notice of the availability at no cost to the recipient of a paper version of a document upon request to the deliverer, together with information about how to make this request, if a paper version is to be made available by the deliverer in accordance with the guidelines provided in subsection 2.3(6) of this Policy.

6. Information about the length of time that a document will be available for electronic delivery.

7. Details of the process for revoking consent to electronic delivery.

8. Procedures to be used by the deliverer for maintaining the confidentiality of information regarding the recipient, where necessary.

9. A statement that the intended recipient is not required to consent to electronic delivery.

a) it is clear to the recipient that consent is being sought for the delivery, including future deliveries, of documents by more than one deliverer; and

b) the methods of electronic delivery to be used by each deliverer are acceptable to the recipient.

2.6 Delivery of an Unaltered Document

2.7 Inability to Effect Electronic Delivery

If electronic delivery of documents is attempted by a deliverer but cannot be accomplished for any reason, delivery should be accomplished by an alternative method, such as delivery of the document in paper form.

2.8 Timing of Electronic Delivery

Electronic delivery of materials to recipients should be made contemporaneously with the mailing of the paper version of such materials even though the deliverer may be capable of electronically delivering such materials sooner.

PART 3 MISCELLANEOUS ELECTRONIC DELIVERY MATTERS

3.1 Form and Content of Documents

(1) For the sake of consistency, documents sent by electronic delivery may follow the formatting requirements set out in the SEDAR Filer Manual, and the securities regulatory authorities have no objection to a document delivered by electronic delivery being altered from the paper version in accordance with these formatting requirements. For example, signatures may appear in typed form rather than graphical signature and text that is required to be in red ink may be presented in capital letters using bold face type. Documents need not necessarily be in SEDAR-acceptable electronic format.

(2) As with documents filed under SEDAR, documents proposed to be sent by electronic delivery should be recreated in electronic format, rather than scanned into electronic format. This is recommended because scanned documents can be difficult to transmit, store and retrieve on a cost-efficient basis and may be difficult to view upon retrieval.

3.2 Confidentiality of Documents

Some documents that may be sent by electronic delivery, such as trade confirmations, are confidential to the recipients. Deliverers should take all reasonably necessary steps to ensure that the confidentiality of those documents is preserved in the electronic delivery process, and are reminded that failure to do so may constitute a breach of obligations owed to clients under securities legislation.

3.3 Hyperlinks

(1) The hyperlink function can provide the ability to access information instantly, in the same document or in a different document on the same or another website.

(2) The use of hyperlinks within a document may not be appropriate for the reasons described in subsection (3), unless the hyperlink is to another point in that same document.

(3) A deliverer that provides a hyperlink in a document to information outside the document risks incorporating that hyperlinked information into the document and thereby becoming legally responsible for the accuracy of that hyperlinked information. Also, the existence of hyperlinks in a document delivered by electronic delivery to a separate document raises the question of which documents are being delivered - only the base document, or the base document and documents to which the base document is linked. This issue may be particularly relevant in the delivery of a prospectus, in which case care should be taken to ensure that it is clear to a recipient which of the documents being delivered constitute the prospectus.

(4) For documents sent by electronic delivery that contain hyperlinks to other documents, deliverers are encouraged to clearly distinguish which of the documents are governed by statutory disclosure requirements, and which documents are not. This may be effected, for example, by the use of appropriate headings on each page of the document.

(5) Deliverers are also reminded that paragraph 7.2(e) of the SEDAR Filer Manual prohibits hyperlinks between documents.

PART 4 PROXY DOCUMENTS

4.1 Proxy Delivery Requirements

(1) Market participants who are required by securities legislation to deliver proxy documents and wish to use an electronic delivery method are reminded torefer to Part 2 of this Policy, which sets out the principles for delivering documents electronically.

(2) Market participants are reminded that merely making proxy documents available for access on a website will not constitute delivery of these documents in accordance with the four components of effective delivery that are set out in Part 2 of this Policy.

4.2 The In Writing Requirements

(1) Forms of proxy, proxies and voting instructions in electronic format (including an electronic format that makes use of the telephone) will satisfy the in writing requirements if the electronic format used

(a) ensures the integrity of the information contained in the forms of proxy and proxies; and

(b) enables the recipient to maintain a permanent record of this information for subsequent reference.

(2) In order to ensure the integrity of information, the electronic format of the form of proxy, proxy or voting instructions should not permit the information in the document to be easily corrupted or changed. For example, the written proxy requirements generally would not be satisfied by sending an email with a form of proxy in WordPerfect format attached, as this format could be easily tampered with.

(3) In order to assist a recipient to retain a permanent record of the information so as to be usable for subsequent reference, appropriate electronic formats and methods of electronic delivery should be used.

4.3 Proxy Execution Requirements

(1) The proxy execution requirements are normally satisfied by a security holder’s signature. The use of a signature indicates adoption of the information in the completed proxy, and permits authentication of the security holder’s identity. The securities regulatory authorities are of the view that the use of a manual signature is one method, but not the only method, of executing a proxy.

(2) The proxy execution requirements may be satisfied through the security holder using an electronic signature to execute a proxy, including a proxy in electronic format that satisfies the in writing requirements (see section 4.2). Any technology or process adopted for executing a proxy should create a reliable means of identifying the person using the signature and establishing that the person incorporated, attached or associated it to the proxy. The security holder’s electronic signature should result from the security holder’s use of a technology or process that permits the following to be verified or proven:

1. a security holder used the technology or process to incorporate, attach or associate the security holder’s signature to the proxy;
2. the identity of the specific security holder using the technology or process; and

3. the electronic signature resulting from a security holder’s use of the technology or process is unique to the security holder.

Part 5 EFFECTIVE DATE

5.1 Effective Date

This National Policy comes into force on January 1, 2000.


As amended February 14, 2003.