BOR 96/16 - Further Continuing Relief for Financial Statements of Certain Foreign Issuers and the Prompt Offering Qualification System [Rescinded]

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

AND

IN THE MATTER OF FURTHER CONTINUING RELIEF FOR FINANCIAL STATEMENTS OF CERTAIN FOREIGN ISSUERS

AND

IN THE MATTER OF THE PROMPT OFFERING QUALIFICATION SYSTEM

Order Under Section 3(8) of the Securities Rules

WHEREAS the Lieutenant Governor in Council, by B.C. Reg 479/95, ordered, among other thing, effective January 1, 1996, that the regulation entitled the "Securities Rules" (the "Rules") was made and was designated to be a rule of the Commission;

AND WHEREAS the Rules have added a number of new requirements applicable to all financial statements filed with the Commission;

AND WHEREAS section 2(5) of the Rules requires an issuer that prepares financial statements in accordance with foreign generally accepted accounting principles to state in the notes to the financial statements which principles have been applied and explain and quantify any significant differences between these principles and the generally accepted accounting principles set out in the Handbook of the Canadian Institute of Chartered Accountants;

AND WHEREAS section 2(6) of the Rules requires that where an audit is performed on an issuer's financial statements and the auditor's report on those financial statements is prepared in accordance with foreign generally accepted auditing standards ("Foreign GAAS"), the auditor's report must explain any significant differences between the Foreign GAAS and the generally accepted auditing standards set out in the Handbook of the Canadian Institute of Chartered Accountants ("Canadian GAAS");

AND WHEREAS section 2(7) of the Rules requires that where a public accountant performs the procedures necessary to issue a public accountant's report on an issuer's financial statements and the public accountant's report is prepared in accordance with foreign procedures ("Foreign Procedures"), the public accountant's report must explain any significant differences between the procedures performed to issue the public accountant's report and the procedures necessary to prepare a public accountant's report under the CICA Handbook ("Canadian Procedures");

AND WHEREAS the Rules impose significant changes for a foreign issuer that has securities registered with the Securities and Exchange Commission and that satisfies the requirement to file an annual information form under National Policy Statement No. 47 on the Prompt Offering Qualification System by filing a current annual report on Form 10-K or on Form 20-F filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934 ("POP Filing SEC Registrant")

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

IT IS ORDERED under section 3(8) of the Rules that

1. sections 2(5), 2(6) and 2(7) of the Rules do not apply to financial statements of a foreign issuer filed under Part 10 of the Rules if the foreign issuer is a POP Filing SEC Registrant;
   
2. the requirement of section 2(6) of the Rules to include an explanation of the significant differences between the Foreign GAAS applied and Canadian GAAS in the auditor's report that accompanies financial statements that are incorporated by reference in a preliminary short form prospectus, short form prospectus or securities exchange take-over bid circular of a foreign issuer does not apply if the foreign issuer is a POP Filing SEC Registrant and files, as appropriate, a preliminary short form prospectus, short form prospectus or securities exchange take-over bid circular that includes the explanation of the significant differences between the Foreign GAAS applied and Canadian GAAS; and
   
3. the requirement of section 2(7) of the Rules to include an explanation of the significant differences between the Foreign Procedures applied and Canadian Procedures in the public accountant's report that accompanies financial statements that are incorporated by reference in a preliminary short form prospectus, short form prospectus or securities exchange take-over bid circular of a foreign issuer does not apply if the foreign issuer is a POP Filing SEC Registrant and files, as appropriate, a preliminary short form prospectus, short form prospectus or securities exchange take-over bid circular that includes the explanation of the significant differences between the Foreign Procedures applied and Canadian Procedures.

DATED at Vancouver, British Columbia, on September 26, 1996.

REF: BOR#93/1
BOR#95/8
BOR#95/9