BOR 95/07 - Distributions by a Control Person Through a Disclosed Market-Making Account [Rescinded]

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

AND

IN THE MATTER OF DISTRIBUTIONS BY A CONTROL PERSON THROUGH A

DISCLOSED MARKET-MAKING ACCOUNT

Order Under Sections 59 and 73.2 of the Securities Act and

Section 137(2) of the Securities Rules

WHEREAS the Lieutenant Governor in Council, by B.C. Reg. 478/95 and B.C. Reg. 479/95, ordered, among other things, that, effective January 1, 1996,

(a) the Securities Regulation, B.C. Reg. 270/86 (the "Old Regulation") is repealed; and

(b) the regulation entitled the Securities Rules (the "Rules"), attached to B.C. Reg. 479/95, is made and is designated to be a rule of the Commission;

AND WHEREAS section 1 of the Securities Act, S.B.C. 1985, c. 83 (the "Act") defines a distribution to include a trade in a previously issued security of an issuer from the holdings of a control person;

AND WHEREAS section 42 of the Act requires a person making a distribution to file a prospectus, unless an exemption is available;

AND WHEREAS it is expedient to provide an exemption, on an interim basis, from section 42 of the Act to enable control persons of exchange issuers to engage in limited trading in the securities of exchange issuers through designated and disclosed market-making accounts;

AND WHEREAS the Commission considers that it would not be prejudicial to the public interest to do so;

IT IS ORDERED, effective January 1, 1996,

1. under section 59 of the Act that section 42 of the Act does not apply to a trade in a security of an exchange issuer from the holdings of a control person where:
   
   (a) the security was acquired by the control person on or through the facilities of the Vancouver Stock Exchange (the "Exchange");
   
   (b) the trade is made on or through the facilities of the Exchange;
   
   (c) the trade is made in accordance with NIN# 95/5, "Principles of Fair Trading", the Exchange's bylaws and rules and the Exchange's Listings Policy 8, "Promotional and Market-Making Activities";
   
   (d) the trade is conducted through a discretionary account established pursuant to the Exchange's Rule C.4.00 and operated in accordance with the Exchanges Rule F.3.14 and there is only one discretionary account per exchange issuer (the "market-making account");
   
   (e) the issuer has publicly disclosed the existence of the market-making account in a news release and a Form 27, which are filed with the Commission at least 7 days prior to the first acquisition or disposition of a security made through the market-making account;
   
   (f) the existence of the market-making account is publicly disclosed in any offering document prepared by the issuer, during the period when the market-making account is in operation; and
   
   (g) the total number of securities traded through the market-making account in each calendar quarter does not exceed 5% of the issued and outstanding securities of that class of securities of the issuer as at the close of business on the first trading day of each calendar quarter;
   
2. under section 73.2 of the Act that section 70 of the Act does not apply to changes in ownership of securities of a control person of an exchange issuer as a result of acquisitions or dispositions of securities made through a market-making account operated in compliance with paragraph 1, provided that a Form 36 is filed with the Commission on behalf of the control person by the registrant responsible for operating the market-making account within 3 business days after the end of each week in which the changes occur, disclosing all acquisitions and dispositions of securities conducted through the market-making account for the week in which the changes occur, and clearly marked "Market-Making Insider Report";
   
3. under section 137(2) of the Rules that section 137(1) of the Rules does not apply to distributions of securities made by a control person of an exchange issuer through a market-making account operated in compliance with paragraph 1, provided that filing of a Form 36 is made pursuant to paragraph 2; and 
   
4. under section 153 of the Act that this order shall terminate on June 30, 1996.

DATED at Vancouver, British Columbia, on December 14, 1995.

Douglas M. Hyndman
Chair