NIN 96/47 - Expedited Review of Short Form Prospectuses and Renewal AIFS [NIN - Rescinded]
| Published Date: | 1996-12-20 |
|---|---|
| Effective Date: | 1996-12-19 |
To expedite the review and receipt of short form prospectuses and the review and acceptance of renewal annual information forms ("Renewal AIFs") filed in more than one province or territory and to provide for continued harmonization of administration of securities legislation, the securities regulatory authorities in Canada entered into a Memorandum of Understanding (the "Memorandum of Understanding") as of December 18, 1996 setting out the procedures to be followed by an eligible issuer or selling security holder to obtain a preliminary and final receipt for a short form prospectus or acceptance of a Renewal AIF on an expedited basis ("Expedited Review"). The Commission is publishing this Memorandum of Understanding in the Weekly Summary of December 20, 1996. This Memorandum of Understanding supercedes the Memorandum of Understanding dated November 15, 1994 regarding substantially the same matter and will be effective on February 18, 1997.
The draft Memorandum of Understanding was published for comment in September 1996. Comment letters submitted in response to the Request for Comment did not suggest any major changes to the draft Memorandum of Understanding; consequently, the Memorandum of Understanding is substantially similar to the published draft. Furthermore, in response to inquiries regarding the eligibility of shelf prospectuses, Section 5 has been amended to clarify that issuers filing a short form prospectus under the Shelf Prospectus System or the PREP System are eligible to elect Expedited Review unless the issuer is filing a renewal short form prospectus for a continuous offering under the Shelf Prospectus System. Expedited Review was not designed to deal with renewal short form prospectuses in the context of continuous offerings. It is not necessary to review these prospectuses on an expedited basis. The Participating Jurisdictions, however, acknowledge that there is room for improvement in the review of these prospectuses on a national basis and will be considering appropriate procedures.
The Memorandum of Understanding will remain in effect once SEDAR is implemented. However, necessary changes will be made shortly thereafter to reflect SEDAR, in particular to eliminate references to filing procedures by Facsimile and to the Undertaking.
Expedited Review was designed to improve the efficiency of the Canadian capital markets by harmonizing the review process and by reducing regulatory costs for senior issuers. It represents a step towards increased harmonization and the elimination of duplication in the current securities regulatory system.
For further information please contact any of the following:
Robert Garneau / Rosetta Gagliardi
Commission des valeurs mobilières du Québec
Tel.: (514) 873-5326
Susan Wolburgh Jenah
Ontario Securities Commission
Tel.: (416) 593-8245Robert B. Bouchard
Manitoba Securities Commission
Tel.: (204) 945-2555
Ian MacIntosh
Saskatchewan Securities Commission
Tel.: (306) 787-5645
Kenneth Parker
Alberta Securities Commission
Tel.: (403) 422-0145
Louyse Gauvin
British Columbia Securities Commission
Tel.: (604) 660-4800
DATED at Vancouver, British Columbia, on December 19, 1996.
Douglas M. Hyndman
Chair
OF SHORT FORM PROSPECTUSES AND RENEWAL AIFS
1. PURPOSE
The Participating Jurisdictions recognize the ongoing need to improve the efficiency of the Canadian capital markets by harmonizing the prospectus review process and by reducing costs for senior issuers. The Participating Jurisdictions are especially cognizant of the timing difficulties encountered by issuers accessing public capital markets when required to deal with the various jurisdictions involved in securities regulation across Canada. In response, the Participating Jurisdictions have agreed to expedite the review and receipt of short form prospectuses and review and acceptance of Renewal AIFs filed under the prompt offering qualification system in more than one Canadian jurisdiction and have reached the following understanding with respect to the procedure to be followed by the Participating Jurisdictions. The Participating Jurisdictions believe that Expedited Review represents a step towards increased harmonization and the elimination of duplication in the current securities regulatory system.
2. INTERPRETATION
Terms with initial capitals have the meaning assigned to them in NPS 47 unless defined below :
"CSA Corporate Finance Committee" means the working committee established by the Canadian Securities Administrators to deal with corporate finance matters;
"Designated Jurisdiction" means the Securities Regulatory Authority or Applicable Regulator, as the context requires, of the province or territory assigned to each Issuer eligible to use the POP System as at December 4, 1996 as set out in Schedule "A", as amended from time to time, or as communicated to the Issuer at the time of acceptance of its Initial AIF;
"Expedited Review" means the expedited review system and procedures provided for under this Memorandum of Understanding;
"Facsimile" means a facsimile or other form of electronic communication;
"Final Filing Materials" means:
(b) responses to all comment letters issued by the Designated Jurisdiction;
"Issuer" means issuer or selling security holder, as the context requires;
"NPS 1" means National Policy Statement No. 1, or any successor instrument;
"NPS 44" means National Policy No. 44, or any successor instrument;
"NPS 47" means National Policy Statement No. 47, or any successor instrument;
"Participating Jurisdiction" means a Securities Regulatory Authority or Applicable Regulator, as the context requires, of a province or territory that has agreed to participate in Expedited Review;
"POP System" means the prompt offering qualification system for the distribution by an Issuer of securities of an Issuer by means of a short form prospectus as contemplated in NPS 47 or the Quebec Securities Act and Securities Regulation;
"Preliminary Materials" means the documents and fees that are required to be filed with the various provinces and territories with a preliminary short form prospectus as specified in the "Table of Documents to be Filed in Respect of the Clearance of National Issues" forming part of NPS 1;
"PREP System" means the rules for pricing offerings after the prospectus is receipted as comptemplated in NPS 44;
"Shelf Prospectus System" means the rules for shelf prospectus offerings as comtemplated in NPS 44.
"Undertaking" means the undertaking addressed to each of the Participating Jurisdictions other than the Designated Jurisdiction to file the Final Filing Materials within three working days following the date of the final expedited review receipt document.
3. RETENTION OF DISCRETION
Expedited Review involves no surrender of jurisdiction by any Participating Jurisdiction. Each of the Participating Jurisdictions retains the statutory discretion to review and receipt or refuse to issue a receipt for a particular short form prospectus.
4. SCOPE
This Memorandum of Understanding sets out the procedures agreed to by each of the Participating Jurisdictions governing the implementation and operation of Expedited Review.
5. ELIGIBILITY
An Issuer will be eligible to elect Expedited Review for distributions of its securities (unless those securities are derivative securities2 or asset-backed securities) by means of a short form prospectus in more than one Participating Jurisdiction under the POP System, under the Shelf Prospectus System or under the PREP System. An Issuer filing a renewal short form prospectus for a continuous offering permitted under the Shelf Prospectus System will not be eligible to elect Expedited Review.
6. CONSULTATION
The CSA Corporate Finance Committee will be responsible for ensuring consistency of review of filings and coordinating any changes or amendments to and otherwise monitoring Expedited Review.
7. DESIGNATED JURISDICTION
The CSA Corporate Finance Committee will assign a Designated Jurisdiction to each Issuer eligible to elect Expedited Review. All decisions of the CSA Corporate Finance Committee will be based on its view of what is most administratively efficient and, in particular, on factors such as jurisdiction of incorporation of the Issuer, location of its head office, the jurisdiction in which it carries its principal business and other factors which the Issuer considers relevant. Each of the Securities Regulatory Authorities of Alberta, British Columbia, Manitoba, Nova Scotia, Ontario, Québec and Saskatchewan have agreed to act as Designated Jurisdictions. Designated Jurisdictions of Issuers eligible to participate in the POP System as at December 4, 1996 are set out in Schedule "A".
Any Issuer becoming eligible to use the POP System after December 4, 1996 will be assigned a Designated Jurisdiction prior to acceptance of the Issuer's Initial AIF. The Designated Jurisdiction will notify the Issuer that it is the Issuer's Designated Jurisdiction at the time of acceptance of the Issuer's Initial AIF.
Schedule "A" will be amended and republished from time to time.
An Issuer electing Expedited Review is required to use the Designated Jurisdiction assigned to that Issuer.
8. EXPEDITED REVIEW PROCESS FOR SHORT FORM PROSPECTUSES
8.1 Applications for Relief
The Issuer is responsible for making applications for any exemptive relief which may be needed from any Participating Jurisdiction. In order to avoid delays, applications should be made prior to filing Preliminary Materials in the Designated Jurisdiction under Expedited Review. Where an application cannot be made prior to the filing of the Preliminary Materials, it must be made contemporaneously with the filing.
If relief has not been obtained within the time for opting out of Expedited Review, the issuance of a final expedited review receipt document may be delayed or the Participating Jurisdiction (in which the relief is required) may opt out for the particular filing.
8.2 Filing Procedures for Preliminary Materials
The Issuer must indicate in the covering letter filed with the preliminary short form prospectus that it is electing Expedited Review and identify the provinces and territories in which the preliminary short form prospectus is being filed.
The Issuer shall file the Preliminary Materials with the Designated Jurisdiction only including, if the distribution is to be made in Quebec, the French version of the preliminary short form prospectus. The Issuer shall also send as nearly as practicable contemporaneously but in no event later than on the same day3 as with the Designated Jurisdiction, a Facsimile of the covering letter, preliminary short form prospectus including the French version to Quebec, and Undertaking to each of the other Participating Jurisdictions in which the Issuer proposes to distribute securities.
8.3 Preliminary Expedited Review Receipt Document
If the Preliminary Materials are acceptable, the Designated Jurisdiction will issue the preliminary expedited review receipt document. Immediately after its issuance, the Designated Jurisdiction will send, by Facsimile, the preliminary expedited review receipt document to each Participating Jurisdiction where the preliminary short form prospectus was filed.
The preliminary expedited review receipt document evidences that a preliminary receipt has been issued by each Participating Jurisdiction in which the preliminary short form prospectus was filed, including those that have opted out.
The preliminary expedited review receipt document will bear on its face the following legend:
"This preliminary expedited review receipt document confirms that preliminary receipts of (name each Participating Jurisdiction in which the preliminary short form prospectus was filed) have been issued".
Certain jurisdictions will support the statements in the preliminary expedited review receipt document by in fact issuing a local preliminary receipt. In those jurisdictions a filing under Expedited Review will be treated as a request to hold the local preliminary receipt on behalf of the Issuer unless the Issuer requests physical possession of the preliminary receipts from those jurisdictions.
8.4 Review
The Designated Jurisdiction is responsible for issuing comments to the Issuer arising out of its review. Comments will be issued within three working days following the date of filing of the preliminary short form prospectus unless, in the opinion of the Designated Jurisdiction, the proposed offering is too complex to be reviewed adequately within the three working days.4 In these circumstances, the Designated Jurisdiction will, by the end of the first working day following the date of the preliminary expedited review receipt document, notify the Issuer and the other Participating Jurisdictions by Facsimile that the time period will be extended to that applicable to prospectuses (other than short form prospectuses) and AIFs under NPS 1.
The Participating Jurisdictions acknowledge that a Participating Jurisdiction may adopt and implement a system of selective review of filings that would apply to preliminary short form prospectuses under Expedited Review. Any Participating Jurisdiction adopting a system of selective review or making substantive changes to its existing system agrees to notify in advance the other Participating Jurisdictions if and when it adopts or amends a system and will provide sufficient time and information to those Participating Jurisdictions for them to assess the scope of review under the system of selective review.
The Designated Jurisdiction will notify the Participating Jurisdictions at the time of filing of the preliminary short form prospectus if under its system of selective review the preliminary short form prospectus is not selected for review.
A Participating Jurisdiction will have until 12:00 p.m. (eastern time) on the working day following the day on which the comment letter is issued by the Designated Jurisdiction to conduct such review as it considers appropriate to determine whether it wishes to opt out of Expedited Review for that particular filing (see section 8.6 - Opting Out Procedures). In most cases, this review of the preliminary short form prospectus will be restricted to identifying any specific concerns with the transaction, the related disclosure or any other special circumstances. Immediately after its issuance, the Designated Jurisdiction will send by Facsimile the comment letter to all Participating Jurisdictions for the purpose of determining the end of the opting-out period. Responses to comments should be in writing addressed to and will be resolved by the Designated Jurisdiction.
Unless a Participating Jurisdiction notifies, by Facsimile, the Designated Jurisdiction otherwise by 12:00 p.m. (eastern time) on the working day following the day on which the Designated Jurisdiction issues its comment letter, it will, by its silence, have confirmed its participation in Expedited Review.
If the Designated Jurisdiction determines that it is not prepared to recommend that a final expedited review receipt document be issued for a particular short form prospectus, it will notify the Issuer and each of the Participating Jurisdictions that has not opted out of Expedited Review of its decision. At that point, the Issuer is obliged to coordinate the review process with each Participating Jurisdiction and Expedited Review is no longer applicable to this filing. Each of the Participating Jurisdictions will determine in accordance with its normal procedure whether or not to issue a final receipt for the short form prospectus.
8.5 Final Expedited Review Receipt Document
Designated Jurisdiction
The Designated Jurisdiction will issue the final expedited review receipt document if:
(a) at least two working days have elapsed following the date of the preliminary expedited review receipt document;
(b) all comments have been resolved with the Designated Jurisdiction;
(c) the opting-out period following the comment letter has elapsed;
(d) the Designated Jurisdiction has received, in acceptable form, the documents and fees that are required to be filed in that province in connection with a short form prospectus as specified in the "Table of Documents to be Filed in Respect of the Clearance of National Issues" forming part of NPS 1, including,if the distribution is to be made in Quebec, the French version of the short form prospectus;
(e) the Issuer has sent by Facsimile, the short form prospectus to each of the other Participating Jurisdictions including the French version to Quebec; and
(f) the Issuer has indicated in the covering letter that the short form prospectus in the appropriate language has been sent by Facsimile to all Participating Jurisdictions.
The issuance of the final expedited review receipt document by the Designated Jurisdiction will evidence that a final receipt has been issued by each Participating Jurisdiction in which the preliminary short form prospectus was filed other than those that have opted out of Expedited Review.
The final expedited review receipt document will bear on its face the following legend:
"This final expedited review receipt document confirms that receipts of (name each Participating Jurisdiction in which the preliminary short form prospectus was filed [except any that have opted out]) have been issued."
The Designated Jurisdiction will send, by Facsimile, the final expedited review receipt document immediately after its issuance to each Participating Jurisdiction in which the preliminary short form prospectus was filed other than those that have opted out of Expedited Review.
Certain jurisdictions will support the statements in the final expedited review receipt document by in fact issuing a local final receipt. In those jurisdictions a filing under Expedited Review will be treated as a request to hold the local final receipt on behalf of the Issuer unless the Issuer requests physical possession of the final receipts from those jurisdictions.
Participating Jurisdictions Other Than the Designated Jurisdiction
The Issuer, in accordance with its Undertaking, will file with the Participating Jurisdictions, other than the Designated Jurisdiction and those Participating Jurisdictions that have opted out of Expedited Review, the Final Filing Materials before the end of the third working day following the date of the final expedited review receipt document.
If the final expedited review receipt document is not issued in respect of a Participating Jurisdiction, the Undertaking is of no effect for that Participating Jurisdiction, except for fees. For greater certainty, Issuers will always be required to pay the relevant filing fees incurred in the Participating Jurisdictions in which the preliminary short form prospectus or short form prospectus was filed.
8.6 Opting Out Procedures
Each Participating Jurisdiction is entitled to opt out of Expedited Review for any particular preliminary short form prospectus. Any Participating Jurisdiction choosing to opt out of Expedited Review for a particular preliminary short form prospectus will notify the Issuer, the Designated Jurisdiction and all other Participating Jurisdictions, by Facsimile, before 12:00 p.m. (eastern time) on the working day following the day on which the comment letter is issued by the Designated Jurisdiction.
If a Participating Jurisdiction opts out of Expedited Review for a particular preliminary short form prospectus, the procedures set out in NPS 1 apply regarding that particular preliminary short form prospectus in that jurisdiction.
Immediately upon receipt of notification from a Participating Jurisdiction that it has opted out of Expedited Review with respect to a particular preliminary short form prospectus filing, the Issuer shall file Preliminary Materials with that Participating Jurisdiction. Notwithstanding the time periods provided for short form prospectuses in NPS 1, if the Preliminary Materials are not filed expeditiously with the Participating Jurisdiction opting out, the time periods provided for under NPS 1 may not be met by the Participating Jurisdiction opting out of Expedited Review.
A Participating Jurisdiction that has opted out of Expedited Review for a particular filing may opt back in at any time prior to the issuance of the final expedited review receipt document by notifying the Designated Jurisdiction, the other Participating Jurisdictions and the Issuer, by Facsimile. It is the responsibility of that Participating Jurisdiction to ensure that the final expedited review receipt document has not been issued prior to its opting back into Expedited Review.
9. EXPEDITED REVIEW PROCESS FOR RENEWAL AIFS
Issuers filing a Renewal AIF in one or more Participating Jurisdictions shall be subject to expedited review procedures to be set out in the reformulated NPS 47. In the meantime, issuers shall be subject to the selective review procedures set out in NPS 47 except that a review will only be conducted by the Designated Jurisdiction.
The Designated Jurisdiction shall immediately accept for filing a Renewal AIF filed in accordance with NPS 47 and shall forward to the Issuer an expedited notice of acceptance document of its Renewal AIF. Immediately after issuance to the Issuer of the expedited notice of acceptance, the Designated Jurisdiction will send, by Facsimile, the expedited notice of acceptance document to each Participating Jurisdiction where the Renewal AIF has been filed.
The expedited notice of acceptance document will evidence that the Renewal AIF has been accepted for filing by each Participating Jurisdiction in which the Renewal AIF was filed.
The expedited notice of acceptance document will state the following:
10. IMPACT OF MEMORANDUM OF UNDERSTANDING"This expedited notice of acceptance confirms that the renewal annual information form of (name the issuer) has been accepted for filing by (name the Participating Jurisdiction in which the Renewal AIF has been filed)."
Where an Issuer has elected Expedited Review and follows the procedures set out herein for filing a preliminary short form prospectus and short form prospectus, the filing procedures for a preliminary short form prospectus and short form prospectus provided in section 6.3 of NPS 47 shall be subject to the filing procedures provided for under this Memorandum of Understanding.
11. CHRONOLOGY
Attached as Schedule "B" is a chronology which illustrates Expedited Review.
12. COUNTERPARTS
This Memorandum of Understanding may be executed in several counterparts, each of which so executed shall be deemed to be an original, and such counterparts together shall constitute one and the same instrument.
This Memorandum of Understanding supercedes a Memorandum of Understanding as at November 15, 1994 (signed by certain of the parties hereto) with regard to substantially the same matters.
13. EFFECTIVENESS
This Memorandum of Understanding will be effective on February 18, 1997.
SIGNED, AS OF DECEMBER 18, 1996.
"William L. Hess"
William L. Hess, Q.C.
Chairman, Alberta Securities Commission
"Douglas M. Hyndman"
Douglas M. Hyndman, Chairman
British Columbia Securities Commission
"Jocelyn Samson"
Jocelyn Samson, Chairman of the Commission
Manitoba Securities Commission
"Donne W. Smith Jr."
Donne W. Smith Jr., Administrator
Office of the Administrator of Securities, New Brunswick
"George F. Kennedy"
George F. Kennedy,
Director of Securities, Department of Justice
by Susan Churchill, Acting Director
Government of Newfoundland and Labrador
"Gary I. MacDougall"
Gary I. MacDougall, Registrar of Securities
Government of Northwest Territories
"Robert B. MacLellan"
Robert B. MacLellan, Chairman
Nova Scotia Securities Commission
"John A. Geller"
John A. Geller, Acting Chairman
Ontario Securities Commission
"Edison Shea"
Edison Shea, Registrar of Securities,
Department of Provincial Affairs, and Attorney General,
Prince Edward Island
"Jean Martel"
Jean Martel, Chairman
Commission des valeurs mobilières du Québec
"Marcel de la Gorgendiere"
Marcel de la Gorgendiere, Chairman
Saskatchewan Securities Commission
"Richard Roberts"
Richard Roberts, Government of Yukon
Notes:
1 Issuers are advised that they are required to file with Participating Jurisdictions only one copy of the documents filed in connection with a preliminary short form prospectus under NPS 1.
2 Derivative securities generally include securities the value of which, or the return from which, is based upon the market price, value or return of one or more underlying securities or commodities or upon the level of one or more financial benchmarks such as interest rates, foreign exchange rates or stock market indices. For the purposes of this Memorandum of Understanding, derivative securities do not include warrants or other securities exchangeable for, or convertible into, securities issued by the issuer or an affiliate of the issuer.
3 Certain Participating Jurisdictions issue a local preliminary receipt. In order for those jurisdictions to issue their local preliminary receipt as of the same date as the preliminary expedited review receipt document, it is critical that the preliminary short form prospectus be filed as nearly as practicable contemporeaneously with the filing in the Designated Jurisdiction but in no event later than on the same day in each Participating Jurisdiction.
4 Issuers are reminded that if they are concerned that a proposed offering may be too complex to be reviewed within three working days they should discuss the proposed offering with the Designated Jurisdiction on a pre-filing basis.
NOTE: [Schedule A moved to history; replaced by list attached to NIN 97/38]
Schedule "B"
CHRONOLOGY
The following chronology illustrates the procedures for clearing a short form prospectus under Expedited Review:
Time Zone of Designated Jurisdiction:
Day 1
Preliminary Materials are filed in the Designated Jurisdiction and a Facsimile of the covering letter, preliminary short form prospectus and Undertaking (as defined below) is filed in each of the other Participating Jurisdictions in which the issuer proposes to distribute securities. Covering letter indicates election of Expedited Review and those provinces and territories in which the issuer proposes to distribute securities.
Issuer provides an undertaking to each Participating Jurisdiction other than the Designated Jurisdiction to file the Final Filing Materials before the end of the third working day1 following the date of issuance of the final expedited review receipt document by the Designated Jurisdiction ("Undertaking"). If no final expedited review receipt document is issued in respect of a Participating Jurisdiction, the Undertaking is of no effect for that Participating Jurisdiction except with respect to fees.
The preliminary expedited review receipt document is issued by the Designated Jurisdiction.
The Designated Jurisdiction sends a Facsimile of the preliminary expedited review receipt document to each Participating Jurisdiction where the preliminary short form prospectus was filed.
Time Zone of most westerly Participating Jurisdiction in which the issuer has filed
Day 2 and 3
Review. A Designated Jurisdiction that has adopted a selective review system will notify the other Participating Jurisdictions if the preliminary short form prospectus is not selected for review.
Day 4
The Designated Jurisdiction sends its comment letter by Facsimile to the issuer and all Participating Jurisdictions, including notation "Expedited Review filing" or equivalent.
Day 5
"Opting Out" Facsimile, if any, sent to Designated Jurisdiction, all other Participating Jurisdictions and the issuer before 12:00 p.m. (noon) (eastern time).
As part of its participation in Expedited Review, each Participating Jurisdiction has agreed that, unless the Designated Jurisdiction is advised otherwise before 12:00 p.m. (eastern time) on the working day following the day on which the comment letter is issued, silence will confirm to the Designated Jurisdiction the participation in Expedited Review by the Participating Jurisdiction.
Day X
Issuer files in the Designated Jurisdiction the documents and fees that are required to be filed in that province in connection with a short form prospectus as specified in the "Table of Documents to be Filed in Respect of the Clearance of National Issues" forming part of NPS 1. Issuer sends by Facsimile the short form prospectus to each of the Participating Jurisdictions.
The Designated Jurisdiction issues the final expedited review receipt document that evidences a final receipt has been issued by each Participating Jurisdiction in which the preliminary short form prospectus was filed other than those that have opted out of Expedited Review.
The Designated Jurisdiction notifies each Participating Jurisdiction other than those that have opted out, by Facsimile, that the final expedited review receipt document has been issued.
Distribution begins in the Designated Jurisdiction and each of the other Participating Jurisdictions.
Day X+3
Issuer files the Final Filing Materials (which include appropriate fees where required), in compliance with its Undertaking, in each Participating Jurisdiction other than the Designated Jurisdiction and those that have opted out of Expedited Review.
Day X+Y
Issuer completes distribution and pays the additional fee where required to do so.
1 For purposes of establishing that a working day has concluded, the time zone of the relevant jurisdiction will apply.