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Securities Law

BCN 2005/29 - Request for Comment on Multilateral Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings and revocation and replacement of BC Instrument 51-801 Implementing National Instrument 51-102 Continuous Disclosure Obligations [BCN - Lapsed]

Published Date: 2005-05-27
Rescinded Date: 2012-05-31

Concurrently Published:

We published for comment today a set of rule and policy initiatives that would create a new “principal regulator system” to simplify dealing with multiple regulators and multiple laws for market participants doing business in Canada. (See BC Notice 2005/28 and accompanying CSA notice.)

We have not decided whether to adopt the principal regulator system. As noted in the CSA notice, the Commission is generally concerned about the outcome of the CSA discussions on how to treat the differences in the national and multilateral instruments covered by the proposed new Multilateral Instrument 11-101 Principal Regulator System. The result of these discussions is that a British Columbia issuer that wants to rely on the exemptions in the proposed instrument will not fully benefit from the commission’s streamlining initiatives.  

Other jurisdictions (except Ontario, which does not propose to adopt the instrument) have accepted some differences, meaning that only the British Columbia provisions would apply to an issuer that relies on the exemptions in the instrument. The accepted differences, described in the CSA notice, include the British Columbia version of the audit committee rule (BC Instrument 52-509) and the British Columbia exemption from Part 12 (filing of material contracts) of National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102).

However, the other jurisdictions have not accepted the following differences in British Columbia:

  • non-adoption of Multilateral Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings (MI 52-109),
  • carve-out in sections 2.1.3 (report of management and directors) and 3.6 (responsibilities of board of directors) of National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities (NI 51-101),
  • carve-out in section 8.6 (financial statement and leverage disclosure) of Multilateral Instrument 81-104 Commodity Pools (MI 81-104), and
  • exemption fromparts 8 (business acquisition report) and 10 (restricted securities) of NI 51-102, set out in BC Instrument 51-801 Implementing National Instrument 51-102 Continuous Disclosure Obligations (BCI 51-801).

Although the specific differences might not seem very significant, the debate about accommodating differences reflects fundamentally different views about how the principal regulator system should work, as set out in more detail in the CSA notice.

As currently drafted, the proposed instrument contemplates that the Commission will require British Columbia issuers using the principal regulator system to comply with these requirements that currently do not apply to them. 

The Commission is, therefore, considering adopting MI 52-109, modifying the exemptions from parts 8 and 10 of NI 51-102, and making the consequential amendments described in the CSA notice to eliminate the carve-outs in NI 51-101 and MI 81-104.

To this end, we are publishing for a 60-day comment period the following documents:

  • Multilateral Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings (MI 52-109)
  • Companion Policy 52-109CP to Multilateral Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings
  • Form 52-109F1 Certification of Annual Filings
  • Form 52-109F2 Certification of Interim Filings
  • Form 52-109FT1 Certification of Annual Filings during Transition Period
  • Form 52-109FT2 Certification of Interim Filings during Transition Period

The version of MI 52-109, its companion policy and related forms we are publishing includes the proposed amendments published by CSA on November 26, 2004 and discussed in BC Notice 2004/45, but does not include the additional proposed amendments that CSA published on February 4, 2005 together with proposed MI 52-111 Reporting on Internal Control over Financial Reporting (MI 52-111).

MI 52-109 requires issuers to file annual and interim certificates about continuous disclosure made by the issuer and was adopted by most of CSA in March 2004. We did not initially publish MI 52-109 for comment nor did we adopt it in British Columbia for reasons noted in BC Notice 2003/25. Since then, we requested comments in BC Notice 2005/08 on the possibility of adopting MI 52-109 as one of the alternatives to adopting an internal controls rule. 

We are also publishing for comment proposed new BC Instrument 51-801, which would revoke and replace existing BCI 51-801 Implementing National Instrument 51-102 Continuous Disclosure Obligations.  New BC Instrument 51-801 would require a reporting issuer in British Columbia that relies on the continuous disclosure or national prospectus rules exemption in the proposed principal regulator system instrument to comply with parts 8 (the business acquisition report) and 10 (restricted security disclosure) of NI 51-102.  

Please provide your comments on MI 52-109 and new BC Instrument 51-801 by July 27, 2005 by delivering them to:

Leigh-Anne Mercier
Senior Legal Counsel
British Columbia Securities Commission
P.O. Box 10142, Pacific Centre
701 West Georgia Street
Vancouver BC V7Y 1L2
Fax: 604-899-6643
lmercier@bcsc.bc.ca

May 27, 2005

Douglas M. Hyndman
Chair 

Ref:  BC Notice 2003/25
BC Notice 2004/45
BC Notice 2005/08
Multilateral Instrument 11-101 Principal Regulator System
Multilateral Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings
Companion Policy 52-109CP to Multilateral Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings
Form 52-109F1 Certification of Annual Filings
Form 52-109F2 Certification of Interim Filings
Form 52-109FT1 Certification of Annual Filings during Transition Period
Form 52-109FT2 Certification of Interim Filings during Transition Period
BC Instrument 51-801 Implementing National Instrument 51-102 Continuous Disclosure Obligations

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 section Securities Law & Policy: Policies & Instruments.