BOR 97/12 - The System for Shorter Hold Periods With an Annual Information Form [Rescinded]

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

AND

IN THE MATTER OF THE SYSTEM FOR SHORTER HOLD PERIODS WITH AN ANNUAL INFORMATION FORM

Order Under Section 187

WHEREAS sections 142 and 143 of the Securities Rules, R.B.C. Reg. 194/97 (the "Securities Rules") provide that a trade in a security acquired by the seller pursuant to any of certain specified exemptions from the prospectus provisions of the Securities Act, R.S.B.C. 1996, c.418, is deemed to be a distribution unless, among other things, a 12 month hold period has elapsed from the various dates specified in sections 142 and 143;

AND WHEREAS the Commission considers that it would not be prejudicial to the public interest to reduce the hold periods imposed by sections 142 and 143 of the Securities Rules, provided that the issuer distributing the securities meets certain criteria and complies with specific disclosure requirements;

AND WHEREAS for the purpose of this order

"AIF" means an AIF as defined in the Interim Policy;

"Interim Policy" means Interim Local Policy Statement 3-27 or any successor instrument;

"NPS 47" means National Policy Statement No. 47 or any successor instrument;

"Qualifying Issuer" means a reporting issuer that has equity securities listed on a recognized market and either

(a) has revenues of $100,000 reported in its audited financial statements for its last financial year, or

(b) has spent

(i) in the case of a resource issuer, more than $100,000 on exploration and development during the previous 12 months; or

(ii) in the case of a non resource issuer, more than $200,000 on expenditures directly related to the development of the business disclosed in the AIF.

EFFECTIVE December 1, 1997, IT IS ORDERED

1. under section 187 of the Securities Act that the provisions of sections 142(2)(a), (b), (c) and (d) and 143(e) of the Securities Rules be varied by replacing the 12 month period with a 4 month period provided that:

(a) the issuer distributing the security certifies to the seller at the time of distribution to the seller that:

(i) the distribution to the seller is made by the issuer in a security of its own issue,

(ii) the issuer is a Qualifying Issuer,

(iii) the issuer has filed a Current AIF as defined in the Interim Policy,

(iv) the board of directors of the issuer approved the filing of the Current AIF,

(v) at the time of filing of the Current AIF, the issuer had filed all supporting documents required by the Commission or the executive director,

(vi) the issuer has, at the date of distribution to the seller, filed all documents that it is required to file under the continuous disclosure provisions of the Securities Act and the Securities Rules, including annual and interim financial information and annual reports, press releases disclosing material changes and material change reports,

(vii) at the date of the distribution to the seller, the issuer had not made a substantial transaction since its Current AIF unless an amended AIF been filed in compliance with section 4.12 of the Interim Policy, and

(viii) the Executive Director has not advised the issuer in writing that its securities are not eligible for the shorter hold period set out in this blanket order; and

(b) the issuer of the security endorses the certificate representing the security with a legend stating that the security is subject to a hold period and may not be traded in British Columbia until the expiry of the hold period except as permitted by the Securities Act and Regulations made under the Securities Act.

2. under section 171 of the Securities Act that this order shall terminate on January 1, 2000.

DATED at Vancouver, British Columbia, on November 27, 1997.