Securities Law

BCN 2002/18 - Advance Notice of Adoption of National Instrument 54-102 - Interim Financial Statement and Report Exemption [BCN - Rescinded]

Published Date: 2002-04-05
Effective Date: 2002-04-05

The Canadian Securities Administrators (the "CSA" or “we”) are planning to adopt National Instrument 54-102 Interim Financial Statement and Report Exemption (“the Instrument”). The full text of this Instrument is reproduced on the Ontario Securities Commission’s website at

The Instrument deals with the sending of interim financial statements and reports by a reporting issuer to registered and beneficial owners of its securities and is a reformulation of the portions of National Policy Statement No. 41 Shareholder Communication ("NP41") that pertain to supplemental mailing lists.

Effective Date

The CSA are publishing, concurrently with this notice, advance notice of the adoption of National Instrument 54-101 Communication with Beneficial Owners of Securities of a Reporting Issuer (including Forms 54-101F1 through 54-101F9) (“NI 54-101”) and Companion Policy 54-101CP and, in British Columbia, consequential amendments to the Securities Rules. The Instrument and NI 54-101 collectively replace the provisions of NP41 pertaining to communication with beneficial owners of securities of a reporting issuer.

Subject to receiving government approval, NI 54-101 and the Instrument will come into force on July 1, 2002.

The Instrument is expected to be implemented as a rule in each of British Columbia, Alberta, Manitoba, Newfoundland, Nova Scotia, Ontario and Quebec, as Commission regulation in Saskatchewan and as a policy in all other jurisdictions represented by the CSA.


The Instrument was published for comment on February 27, 1998 (the “1998 Proposal”). NIN 98/13 Following publication, we received three comments and all comments were considered. The names of the commenters, a summary of their comments and our responses are contained in Appendix “A” and Appendix “B” to the Ontario Securities Commission's Notice. We thank all of those who made comments.

Purpose of the Instrument

The Instrument provides to a reporting issuer an exemption from the requirement in securities legislation to send interim financial statements or reports to registered holders of the issuer's securities if the reporting issuer satisfies alternative requirements of the Instrument related to: (i) the release and filing of a news release containing a summary of the information contained in the statement or report (if the reporting issuer is not a mutual fund), (ii) the filing of the statement or report with the securities regulatory authority, (iii) the filing of the statement  or report on all exchanges on which securities of the reporting issuer are listed, and (iv) the sending of the statement or report to persons or companies on a supplemental list that is established by the reporting issuer in accordance with the Instrument.

The exemption in the Instrument is substantially similar to the arrangement currently in place under NP41.

Summary of Changes to Instrument

The Instrument has been revised from the 1998 Proposal, but is essentially the same. We are of the view that republication of the Instrument for comment is not required.

The following changes have been made:

  • Paragraph 1.1(1) has been changed to include a definition of “supplemental list”;
  • Section 1.2 has been deleted as it merely restates general principles of agency law;
  • Paragraph 2.1(a) has been revised to eliminate from the conditions to the exemption the condition that a news release be issued in the case of a reporting issuer that is a mutual fund and to clarify that a reporting issuer must comply with the timing requirements of securities legislation for filing and sending interim financial statements to be entitled to rely on the exemption; 
  • Section 2.2 clarifies that a reporting issuer relying on the exemption must send the interim financial statements or reports to the holders set out in the supplemental list;
  • Part 3 has been added to provide for transitional arrangements for a reporting issuer that has sent a return card to its security holders in accordance with NP 41 before the coming into force of the Instrument; and
  • Part 4 has been added to provide for the effective date.

Rescission of NP41

Effective the date the Instrument and NI 54-101 come into force, NP41 will be rescinded and BCI 52-505 Exemption from the Requirement to Send Interim Financial Statements and Quarterly Reports to Security Holders of a Reporting Issuer will be updated.


Questions may be referred to:

Diane Joly
Directrice de la recherche et du développement des marchés
Commission des valeurs mobilières du Québec
(514) 940-2150

Glenda A. Campbell
Vice Chair
Alberta Securities Commission
(403) 297-6454

Veronica Armstrong
Senior Policy Advisor
British Columbia Securities Commission
(604) 899-6738
or (800) 373-6393 (in B.C.)

Robert F. Kohl
Senior Legal Counsel, Registrant Regulation
Capital Markets Branch
Ontario Securities Commission
(416) 593-8233

April 5, 2002


Douglas M. Hyndman

Ref: NP 41
 NI 54-101
 BCI 52-505
 NIN 98/13

This Notice may refer to other documents. These documents can be found at the B.C. Securities Commission public website at in the Commission Documents database or the Historical Documents database.