BOR 98/08 - Distribution of Securities Outside British Columbia [Rescinded]

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

AND

IN THE MATTER OF A DISTRIBUTION OF SECURITIES OUTSIDE BRITISH COLUMBIA

Order Under Sections 48 and 76

WHEREAS sections 34 and 61 of the Securities Act, R.S.B.C. 1996, c. 418 (the "Securities Act") require an issuer that is doing a distribution from British Columbia to be registered under the Securities Act and to file a prospectus with the Commission;

AND WHEREAS the Commission considers that it would not be prejudicial to the public interest to provide an exemption from sections 34 and 61 of the Securities Act for a distribution to purchasers outside British Columbia, provided that the issuer distributing the securities meets certain criteria;

AND WHEREAS for the purpose of this order

"recognized market" means a recognized market as defined in Local Policy Statement

3-27 or any successor instrument;

EFFECTIVE October 1, 1998, IT IS ORDERED

1. under sections 48 and 76 of the Securities Act that sections 34 and 61 of the Securities Act do not apply to a distribution of securities by an issuer provided that:

(a) the distribution is not made to a purchaser resident in British Columbia,

(b) the purchaser certifies in the subscription agreement that the purchaser is not resident in British Columbia and the issuer does not believe, and has no reasonable grounds to believe, that the certification is false,

(c) the purchaser acknowledges in the subscription agreement that

(i) no securities commission or similar regulatory authority has reviewed or passed on the merits of the securities,

(ii) there is no government or other insurance covering the securities,

(iii) there are risks associated with the purchase of the securities,

(iv) there are restrictions on the purchaser’s ability to resell the securities and it is the responsibility of the purchaser to find out what those restrictions are and to comply with them before selling the securities, and

(v) the issuer has advised the purchaser that the issuer is relying on an exemption from the requirements to provide the purchaser with a prospectus and to sell securities through a person registered to sell securities under the Securities Act and, as a consequence of acquiring securities pursuant to this exemption, certain protections, rights and remedies provided by the Securities Act, including statutory rights of rescission or damages, will not be available to the purchaser,

(d) the securities are listed or quoted on a recognized market,

(e) the issuer files a report of the trade in the form required under section 139 of the Securities Rules, R.B.C. Reg. 194/97 (the "Securities Rules") on or before the 10th day after the distribution, and

(f) the issuer 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 Securities Rules and, if the issuer is a reporting issuer at the date of issue, with a statement that specifies the date the hold period expires, and

2. under section 76 of the Securities Act that a trade in a security acquired by the seller pursuant to the order in paragraph 1 above, is deemed to be a distribution unless:

(a) in the case of a non-reporting issuer, the resale requirements of section 140(2)(a) to (f) or section 141 of the Securities Rules are complied with as if the security, or in the case of a convertible or exchangeable security, the primary security, were acquired under section 74(2)(4) of the Securities Act, or

(b) in the case of a reporting issuer, the resale requirements of sections 142(2)(a) or (b), and 142(2)(e) to (i) or section 143 of the Securities Rules, as varied by BOR#98/7 if applicable, are complied with as if the security, or in the case of a convertible or exchangeable security, the primary security, were acquired under section 74(2)(4) of the Securities Act.

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

Douglas M. Hyndman
Chair

REF: Local Policy Statement 3-27
BOR#98/7