BOR 98/07 - System for Shorter Hold Period With an Annual Information Form [Rescinded]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 PERIOD WITH AN ANNUAL INFORMATION FORM

Order Under Sections 171 and 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 SecuritiesAct, R.S.B.C. 1996, c. 418 (the "Securities Act") 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 the specified criteria and complies with the specified disclosure requirements;

AND WHEREAS for the purpose of this order

"AIF" means an AIF as defined in the policy;

"former policy" means Interim Local Policy Statement 3-27 dated November 27, 1997;

"policy" means Local Policy Statement 3-27 dated August 26, 1998 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

(a) the issuer’s consolidated audited financial statements for the most recent year report,

(i) revenues of at least $100,000, or

(ii) expenditures of more than,

(A) $100,000 on exploration and development, in the case of a resource issuer, or

(B) $200,000 directly related to the development of the business disclosed in the AIF, in the case of a non resource issuer, or

(b) if an issuer’s financial statements for an interim period subsequent to its most recent year end that are subject to a review engagement report, or which are included in a prospectus, or JCP or VCP information circular as defined in the policy, report

(i) revenues of at least $100,000 or

(ii) expenditures of more than,

(A) $100,000 on exploration and development, in the case of a resource issuer, or

(B) $200,000 directly related to the development of the business disclosed in the AIF, in the case of a non resource issuer;

"recognized market" means a recognized market as defined in the policy;

EFFECTIVE October 1, 1998, 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) at the date of the distribution of the securities the issuer signs a certificate certifying that:

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

(ii) the issuer is a qualifying issuer or was a qualifying issuer as defined in BOR#97/12,

(iii) the issuer has filed a current AIF as defined in the policy or former policy, together with all supporting documents as set out in the policy or former policy,

(iv) the issuer has 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,

(v) if the issuer has made a substantial transaction since the date of its current AIF, the issuer has filed a material change report in compliance with section 5.14 of the policy or an amended AIF in compliance with section 4.12 of the former policy, and

(vi) 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 order;

(b) the issuer endorses the certificate representing the security with a legend stating that the security is subject to a 4 month 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 Securities Rules and that specifies the date the hold period expires; and

(c) the securities are distributed prior to January 1, 2001, and

2. under section 171 of the Securities Act that Blanket Order #97/12 is revoked.

DATED at Vancouver, British Columbia, on August 27, 1998.

REF: Local Policy Statement 3-27
BOR#97/12
NPS 47