BOR 98/01 - The Hold Period for Securities Issued by an Exchange Issuer Under Section 74(2)(18) of the Securities Act [Rescinded]

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

AND

IN THE MATTER OF THE HOLD PERIOD FOR SECURITIES ISSUED BY AN EXCHANGE ISSUER UNDER SECTION 74(2)(18) OF THE SECURITIES ACT

Order Under Section 76

WHEREAS section 142(2)(c) of the Securities Rules, R.B.C. Reg. 194/97, provides that a trade in a security of an exchange issuer acquired by the seller under section 74(2)(18) of the Securities Act, R.S.B.C. 1996, c. 418, is deemed to be a distribution unless 12 months have elapsed from the later of the date the Vancouver Stock Exchange (the "Exchange") approved the acquisition of the property or the date the property for which the security is being issued was transferred to the issuer;

AND WHEREAS, in the case of an issuance of securities by an exchange issuer under section 74(2)(18) of the Act for the acquisition of an option to acquire a resource property, the transfer of property may not occur for several years, if at all, and therefore the 12 month hold period referred to in section 142(2)(c ) may not commence for several years, if at all;

AND WHEREAS on November 27, 1997 the Commission issued BOR#97/12 to reduce the hold periods imposed by sections 142 and 143 of the Securities Rules from 12 months to 4 months, provided the issuer distributing the securities meets certain criteria and complies with specific disclosure requirements and Interim Local Policy Statement 3-27, System for Shorter Hold Period with an Annual Information Form;

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

IT IS ORDERED

1. under section 76 of the Securities Act that section 61 of the Securities Act does not apply to a deemed distribution by the holder of a security of an exchange issuer issued under section 74(2)(18) of the Securities Act, if:

(a) 12 months have elapsed from the earlier of the date that

(i) the issuer has issued a news release disclosing that the issuer has entered into a binding agreement to acquire title to the property for which the security was issued, subject only to acceptance by the Exchange, or

(ii) the Exchange has accepted the issuer’s signed agreement to acquire the property interest for which security was issued, and

(b) the holder of the security has complied with the resale requirements in section 142(2)(e) to (i) of the Securities Rules;

2. under section 171 of the Securities Act that, where an exchange issuer of a security issued under section 74(2)(18) of the Securities Act complies with

(a) section 1 of this order,

(b) the provisions of BOR#97/12, and

(c) Interim Local Policy Statement 3-27 or any successor instruments,

the 12 month period referred to in paragraph 1(a) of this order shall be reduced to 4 months; and

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

DATED at Vancouver, British Columbia, on March 12, 1998.

Ref: BOR#97/12
Interim Local Policy Statement 3-27