BOR 93/01 - The Prompt Offering Qualification System [Rescinded]

IN THE MATTER OF THE SECURITIES ACT S.B.C. 1985, c. 83 AND

IN THE MATTER OF THE PROMPT OFFERING QUALIFICATION SYSTEM

Exemption Orders Under Section 59 of the Act and Sections 99(2), 115(6) and 143(1)(b)(iii) of the Regulation

WHEREAS the Commission has issued National Policy Statement No. 47 - Prompt Offering Qualification System (the "Policy");

AND WHEREAS the Policy is structured on the basis that issuers of securities in compliance with the Policy will be exempted from certain of the requirements of the Securities Act, S.B.C. 1985, c.83 (the "Act") and the Securities Regulation, B.C. Reg. 270/86 (the "Regulation");

AND WHEREAS the Commission and the Superintendent consider that Local Policy Statement No. 3-40 ("LPS 3-40") shortened the time periods and streamlined the procedures by which issuers that qualified under LPS 3-40 had access to the capital markets through a prospectus offering without reducing the existing benefits of investor protection or the degree and quality of disclosure to the public;

AND WHEREAS the Commission and the Superintendent consider that replacing LPS 3-40 with the Policy is desirable in order to provide a national policy statement for the prompt offering qualification system;

AND WHEREAS the "POP System" means the requirements of the Policy, as they have been waived or varied by the Commission or the Superintendent;

AND WHEREAS the Commission considers that to do so would not be prejudicial or harmful to the public interest and there is adequate justification to do so;

Effective February 19, 1993, THE COMMISSION ORDERS

Prospectus offerings

1. under section 59 of the Act that section 42 of the Act does not apply to a distribution of a security by an issuer made in compliance with the POP System provided the distribution is made in compliance with section 42 of the Act, except for the requirements contained in

(a) section 42(2) of the Act, as to the form and content of a preliminary prospectus and a prospectus, and

(b) sections 49(1) and 50(1) of the Act, as to the form of certificates of the issuer, promoter and underwriter,

provided a preliminary short form prospectus and short form prospectus

(c) are filed under section 42(2) of the Act in accordance with the requirements and procedures set out in the POP System, and

(d) contain the certificates of the issuer, promoter and underwriter required under sections 49(1) and 50(1) of the Act, in the form set out in the POP System;

Solicitations of expressions of interest

2. under section 59 of the Act that section 42 of the Act does not apply to the solicitation of expressions of interest with respect to a distribution of a security to be made in compliance with the POP System, prior to the filing of a preliminary short form prospectus with respect to the security, provided

(a) the issuer of the security has entered into an enforceable agreement with an underwriter that

(i) requires the underwriter to purchase the security,

(ii) requires the issuer to file, and obtain a receipt for, the preliminary short form prospectus from the securities regulatory authority of

(A) the jurisdiction selected as the principal jurisdiction within two business days, and

(B) all other jurisdictions in Canada in which the distribution is to be made within three business days from the date that the issuer and the underwriter entered into the agreement, and

(iii) fixes the terms of issue of the security,

(b) as soon as a receipt for the preliminary short form prospectus has been obtained, a copy of the preliminary short form prospectus is forwarded to any person who has expressed an interest in acquiring the security,

(c) no contract of purchase and sale with respect to the security is entered into until the short form prospectus has been filed and a receipt obtained for it from the Superintendent, and

(d) the Superintendent has not advised the underwriter or the issuer in writing that it cannot rely on the exemption set out in this paragraph; and

Financial Statements

3. under section 143(1)(b)(iii) of the Regulation that section 141 of the Regulation does not apply where an issuer is required to file its comparative audited annual financial statements with the Commission in order for a receipt to be issued for its preliminary short form prospectus or short form prospectus under the POP System provided the relevant financial statements are sent, and the written confirmation of sending is filed, within the time period contemplated by the continuous disclosure requirements of the Regulation for the filing and sending of an issuer's comparative audited annual financial statements;

AND WHEREAS the Superintendent considers that obtaining a consent is impracticable where any security rating received from one or more Approved Rating Organizations, as defined in the Policy, is required to be disclosed in a preliminary short form prospectus and short form prospectus;

AND WHEREAS the Superintendent is satisfied that there is sufficient justification to do so;

Effective February 19, 1993, THE SUPERINTENDENT WAIVES

Consent

1. under section 99(2) of the Regulation, the requirement set out in that section to file a consent in respect of any security rating disclosed in a preliminary short form prospectus or a short form prospectus in accordance with the POP System; and

Securities underwritten on a firm commitment basis

2. under section 115(6) of the Regulation, the requirement of section 115(3)(d) of the Regulation, provided the short form prospectus indicates that the securities are to be taken up by the underwriter, if at all, on or before a date not later than six weeks from the date on which the final receipt is issued.

DATED at Vancouver, British Columbia, on February 17, 1993.

Douglas M. Hyndman    Dean E. Holley
Chair                            Superintendent of Brokers