NIN 89/29 - Meaning Of "The Public" [NIN - Rescinded]

Effective November 1, 1989, the Securities Amendment Act, 1989, amends the definition of "private issuer" in section 1(1) of the Securities Act (the "Act") to provide that an issuer will be a private issuer if, among other things, it has not distributed any of its securities to the public.

This Interpretation Note sets out the position taken by the Commission with respect to the meaning of "the public" for the purposes of the definition of private issuer in section 1(1) of the Act and the exemption in section 32(j) of the Act.

The Commission recognizes that the common law interpretation of the public is very broad and that whether or not a person is a member of the public is a factual matter to be determined by an issuer and its legal advisors in each particular situation.

Without limiting the circumstances in which a person would not be a member of the public, the Commission takes the position that a trade by an issuer or by a person holding securities of an issuer to any of the following persons is not a trade to the public:

(a) a person holding the issuer's securities on the date of the trade,

(b) a spouse, parent, brother, sister or child of the person making the trade,

(c) a director, officer or employee of the issuer,

(d) a spouse, parent, brother, sister or child of a director or officer of the issuer, or

(e) a company, all of the voting securities of which are beneficially owned by any combination of the persons referred to in (a),(b),(c) or (d) above.

Further, the Commission takes the position that a distribution of securities by a private issuer in the context of an amalgamation or merger of two or more private issuers to holders of securities of those private issuers is not a distribution to the public.


DATED at Vancouver, British Columbia, this 13th day of October 1989.

Douglas M. Hyndman
Chairman