NIN 96/41 - Specification of Offering Documents Requiring Written Underwriting Procedures and Registration as an Underwriter [NIN - Rescinded]
| Published Date: | 1996-11-21 |
|---|---|
| Effective Date: | 1996-11-21 |
This Notice repeals and replaces NIN#96/11.
Sections 45(1) and 87 of the Securities Rules authorize the Executive Director to specify offering documents which, when used with relation to a distribution of securities, require, respectively, written prudent business procedures or other safeguards for underwriting such distributions and registration as an underwriter.
Effective January 1, 1997, the Executive Director is specifying the following documents for the purposes of sections 45(1) and 87 of the Securities Rules:
(i) a rights offering circular used in connection with the distribution of rights under the prospectus exemption set out in section 55(2)(7) of the Securities Act; and
(ii) an offering memorandum used in connection with the distribution of special warrants under a prospectus exemption, that is an exemption from section 42 of the Securities Act.
A managing dealer, that is, a dealer that enters into an agreement with an issuer under which the dealer has agreed to organize and participate in the solicitation of the exercise of rights issued by the issuer, would be acting as an underwriter and accordingly required to be registered as an underwriter prior to organizing and participating in the rights offering.
A special warrant is a security that is convertible into another security (the "underlying security") without payment of material additional consideration and requires the issuer of the special warrant or the underlying security to file a prospectus to qualify the distribution. Where an arrangement, written or otherwise, exists with respect to a person participating in the distribution of special warrants under a dealer registration and prospectus exemption, that is, an exemption from section 20(1)(a) and 42 of the Securities Act, that person may be acting as an underwriter as defined in section 1(1) of the Securities Act. If so, that person is required to be registered as an underwriter prior to participating in the exempt distribution and will be required to sign the certificate required under section 50 of the Securities Act that is attached to any prospectus that may be subsequently filed to qualify the distribution of securities upon the exercise of the special warrants.
DATED at Vancouver, British Columbia, on November 21, 1996
Dean E. Holley
Executive Director
REF: NIN#96/11