Securities Law

BCN 2004/12 - Adoption of Multilateral Instrument 45-102 Resale of Securities, and Related Instruments effective March 30, 2004 [BCN - Rescinded]

Published Date: 2004-03-26
Effective Date: 2004-03-30
Related Document(s):

Substance and purpose of the Instrument
The securities regulatory authorities in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, the Yukon, Northwest Territories and Nunavut are repealing the current Multilateral Instrument 45-102 Resale of Securities, Forms 45-102F1, 45-102F2 and 45-102F3 and Companion Policy 45-102CP (collectively, the Current Resale Rule) and replacing them with

  • Multilateral Instrument 45-102 Resale of Securities (the Instrument), which contains Form 45-102F1 (the Form), and
  • Companion Policy 45-102CP (the Policy)

(collectively, New MI 45-102).

New MI 45-102 will replace the Current Resale Rule that came into effect in all jurisdictions except Québec on November 30, 2001.  The Current Resale Rule harmonized certain provincial and territorial resale restrictions applicable to securities distributed under prospectus exemptions. It also harmonized the approach to distributions by control persons and provided for a prospectus exemption to permit the resale of securities of a non-reporting issuer with a minimal connection to Canada over a foreign exchange or market. 

Under the Current Resale Rule, securities acquired in a private placement are subject to a four-month hold period if the issuer is a qualifying issuer (that is, its securities are listed on a specified exchange and it has filed a current AIF). If the issuer is not a qualifying issuer, resale is restricted for twelve months.  The four-month/twelve-month regime also applies to seasoning periods and control block distributions.

The principal reason for the distinction between qualifying and non-qualifying issuers was to ensure that proper information reached the markets prior to resale by restricting the availability of the shortened period to those reporting issuers that supplemented their continuous disclosure records with an AIF. With the development of harmonized, enhanced continuous disclosure rules for adoption in all Canadian jurisdictions, we have eliminated the qualifying issuer concept in New MI 45-102 and have moved to a simple four-month hold/seasoning regime for all reporting issuers. We have timed the implementation of New MI 45-102 to coincide with the effective date of the harmonized continuous disclosure rules.

Prior publications
We first published the Instrument for comment on January 31, 2003. The consequential amendments were published on July 25, 2003. The comment periods expired in May and September 2003, respectively. On December 19, 2003, we published advance notice that, subject to government approval, we expected to adopt the Instrument as rules effective March 30, 2004 (BCN 2003/58). 

Consequential amendments
National Amendments

Amendments have been made to National Instrument 13-101 System for Electronic Document Analysis and Retrieval (SEDAR), and National Instrument 62-101 Control Block Distribution Issues. The amendments are set out in Appendix A.

Local Amendments
Effective March 30, 2004, we are amending or revoking certain local instruments in conjunction with implementing New MI 45-102. In particular, the following BC Instruments will be replaced:

BC Instrument 45-509 Short Form Offerings of Listed Securities and Units by TSX Venture Listed Issuers
BC Instrument 72-502 Trades in Securities of U.S. Registered Issuers
BC Instrument 72-503 Distribution of Securities outside British Columbia

In addition, BC Instrument 45-516 Amendments to Multilateral Instrument 45-102 Resale of Securities will be revoked.

Questions
You may refer questions to:

Rosann Youck
Senior Legal Counsel
Legal and Market Initiatives
British Columbia Securities Commission
(604) 899-6656
(800) 373-6393 (in B.C. and Alberta)
ryouck@bcsc.bc.ca

March 26, 2004

 

Douglas M. Hyndman
Chair

Ref:  Multilateral Instrument 45-102 Resale of Securities
Form 45-102F1
Form 45-102F2
Form 45-102F3
Companion Policy 45-102CP Resale of Securities
National Instrument 13-101 System for Electronic Document Analysis and Retrieval (SEDAR)
National Instrument 62-101 Control Block Distribution Issues
BC Instrument 45-509 Short Form Offerings of Listed Securities and Units by TSX Venture Listed Issuers
BC Instrument 72-502 Trades in Securities of U.S. Registered Issuers
BC Instrument 72-503 Distribution of Securities outside British Columbia
BC Instrument 45-516 Amendments to Multilateral Instrument 45-102 Resale of Securities

 

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

 

Appendix A

Amendments To National Instrument 13-101
System For Electronic Document Analysis and Retrieval (SEDAR)

 and

AMENDMENTS TO NATIONAL INSTRUMENT 62-101
Control Block Distribution Issues

PART 1 AMENDMENTS TO NATIONAL INSTRUMENT 13-101

1.1  Amendments  - Appendix A to National Instrument 13-101 System for Electronic Document Analysis and Retrieval (SEDAR) is amended by

(a) under Other Issuers - Continuous Disclosure,

(i)  deleting item 15 Annual Information Form (SHAIF System),

(ii)  deleting item 16 Amended Annual Information Form (SHAIF System),

(iii)  deleting item 17 Notice (SHAIF System),

(iv) substituting the following item:

15. Form 1 (Resale Rule)

PART 2 AMENDMENTS TO NATIONAL INSTRUMENT 62-101

2.1  Amendments - National Instrument 62-101 Control Block Distribution Issues is amended by

(a)  amending section 1.1 by deleting the definition of information circular requirement;

(b) amending section 2.1 by deleting the words “and in Quebec only, the information circular requirement,” in subsection (1);

(c)  deleting section 2.2 Pledgees;

(e)  amending Appendix A to strike the reference to Quebec and Policy Statement Q-12 Secondary Distribution through Solicitations under the Securities Act (Quebec);

(f) deleting Appendix B; and

(g) deleting Appendix C.

PART 3 EFFECTIVE DATE

3.1  Effective Date - These Amendments are effective March 30, 2004.