BOR 97/06 - Further Continuing Relief for Financial Statements of Certain Foreign Issuers [Rescinded]

IN THE MATTER OF THE SECURITIES ACT R.S.B.C. 1996, c. 418

AND

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

Order Under Section 3(8) of the Securities Rules

WHEREAS the Securities Rules, B.C. Reg. 479/95 took effect January 1, 1996, and were replaced by the revised Securities Rules, R.B.C. Reg. 194/97 (the "Rules") on June 12, 1997;

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

AND WHEREAS section 2(2) of the Rules provides that if financial statements are prepared in accordance with foreign generally accepted accounting principles ("Foreign GAAP"), the notes to the financial statements must state which accounting principles have been applied and explain and quantify any significant differences between the Foreign GAAP applied and the generally accepted accounting principles determined with reference to the Handbook of the Canadian Institute of Chartered Accountants ("Canadian GAAP");

AND WHEREAS section 2(3) of the Rules provides that if 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 determined with reference to the Handbook of the Canadian Institute of Chartered Accountants ("Canadian GAAS");

AND WHEREAS section 2(4) of the Rules provides that if 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 Foreign Procedures and the procedures necessary to prepare a Canadian public accountant's report ("Canadian Procedures");

AND WHEREAS, under BOR#93/1, a distribution of a security by an issuer made in compliance with the POP System, as defined in BOR#93/1, is exempt from the requirements of the Securities Act relating to the form and content of a preliminary prospectus and prospectus, if a preliminary short form prospectus and short form prospectus are filed in accordance with the requirements and procedures set out in the POP System;

AND WHEREAS the POP System permits a foreign issuer to provide a reconciliation of its financial statements to Canadian GAAP in a preliminary short form prospectus, short form prospectus and take-over bid circular, as appropriate, instead of in the notes to its financial statements;

AND WHEREAS, under BOR#96/16

• a foreign issuer that has securities registered with the United States Securities and Exchange Commission (the "SEC") and that satisfies the requirement to file an annual information form under National Policy Statement No. 47 on the POP System by filing a current annual report on Form 10-K or on Form 20-F filed with the SEC pursuant to the Securities Exchange Act of 1934 (a "POP Filing SEC Registrant") is exempt from the requirements of sections 2(2), (3) and (4) of the Rules relating to financial statements filed under Part 10 of the Rules;
  
• a POP Filing SEC Registrant is exempt from the requirement of section 2(3) of the Rules to include an explanation of the significant differences between the Foreign GAAS applied and Canadian GAAS in the auditor's report, if the POP Filing SEC Registrant includes that explanation in any preliminary short form prospectus, short form prospectus or securities exchange take-over bid circular filed under the Securities Act, as appropriate; and
  
• a POP Filing SEC Registrant is exempt from the requirement of section 2(4) 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, if the POP Filing SEC Registrant includes that explanation in any preliminary short form prospectus, short form prospectus or securities exchange take-over bid circular filed under the Securities Act, as appropriate;

AND WHEREAS, under BOR#91/7, a distribution of a security by a U.S. issuer made in compliance with the MJDS, as defined in BOR#91/7, is exempt from the requirements of the Securities Act relating to the form and content of a preliminary prospectus and prospectus, if a preliminary prospectus and prospectus complying with MJDS are filed in accordance with the requirements and procedures set out in the MJDS;

AND WHEREAS BOR#91/7 provides an exemption from the continuous disclosure requirements for any U.S. issuer that has a class of securities registered under section 12 of the Securities Exchange Act of 1934 or that is required to file reports under section 15(d) of that Act, if the issuer complies with the MJDS;

AND WHEREAS the MJDS does not require an eligible U.S. issuer to provide a reconciliation of its financial statements to Canadian GAAP except in the case of a distribution under section 3.3 of National Policy Statement No. 45 on the MJDS;

AND WHEREAS the MJDS does not require an eligible U.S. issuer to provide an explanation of significant differences between Foreign GAAS applied and Canadian GAAS or between Foreign Procedures applied and Canadian Procedures;

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, for a foreign issuer other than a POP Filing SEC Registrant or an eligible U.S. issuer under MJDS,

1. the requirement of section 2(2) of the Rules to explain and quantify any significant differences between the Foreign GAAP applied and Canadian GAAP in the notes to the financial statements does not apply if the foreign issuer includes the explanation and quantification of the significant differences between the Foreign GAAP applied and Canadian GAAP in a separate schedule of financial information;
   
2. the requirement of section 2(3) of the Rules to explain any significant differences between the Foreign GAAS applied and Canadian GAAS in the auditor's report on the financial statements does not apply if the foreign issuer provides the explanation of the significant differences between the Foreign GAAS applied and Canadian GAAS in a separate statement signed by the auditor of the foreign GAAS; and
   
3. the requirement of section 2(4) of the Rules to explain any significant differences between the Foreign Procedures applied and Canadian Procedures in the public accountant's report on the financial statements does not apply if the foreign issuer provides the explanation of the significant differences between the Foreign Procedures applied and Canadian Procedures in a separate statement signed by the public accountant applying the Foreign Procedures.

DATED at Vancouver, British Columbia, on June 25, 1997.

REF: BOR#91/7
BOR#93/1
BOR#96/16