Securities Law

BCN 2006/30 - Publication for Comment of National Instrument 41-101 General Prospectus Requirements Related Instruments and Proposed Consequential Amendments [BCN - Lapsed]

Published Date: 2006-12-22
Rescinded Date: 2012-05-30
Related Document(s):

Concurrently Published:

Substance and purpose of the Instrument
The Canadian Securities Administrators (CSA) are proposing a nationally harmonized prospectus disclosure regime for issuers, including investment funds that are not required to follow NI 81-101 Mutual Fund Prospectus Disclosure. The attached CSA notice describes what the Commission (or we) and the rest of the CSA are proposing, and how the new general prospectus disclosure regime would operate.

Consequential amendments
The new NI 41-101 General Prospectus Requirements (the general prospectus rule) would replace the existing NI 41-101 Prospectus Disclosure Requirements. We also propose related amendments to other CSA rules and national policies, as described in the CSA notice. The Commission will also need to amend, repeal, or rescind some local BC rules, instruments, forms and policies. In addition to the specific local changes we list in this notice, we might identify other necessary changes as we consider the comments we receive on the general prospectus rule. 

Local Amendments
At this time, we propose to amend or repeal most of the prospectus-related sections in the Securities Rules. The text of those amendments is attached to this BC Notice. Most of the proposed amendments would remove provisions that would be replaced by provisions in the general prospectus rule or change references to sections in the Act that are repealed or amended in Bill 20. We discuss Bill 20 in more detail later in this notice. The amendments to section 120 of the Rules would make the prospectus receipt refusal grounds in British Columbia largely uniform with those in other jurisdictions. We are harmonizing our prospectus receipt refusal grounds to the grounds that other jurisdictions have adopted, or that they are proposing to adopt as part of the CSA's harmonization initiatives.

The only remaining difference would be in section 120(2)(i), which is a ground that is unique to British Columbia. We consider it important to retain this ground because qualified directors and officers are important to protect the interests of investors in venture issuers, especially in the mining exploration industry which is heavily concentrated in British Columbia.

We also propose to amend or repeal the following BC instruments, policies, and forms to eliminate local requirements, exemptions and guidance that would become obsolete and conform to the general prospectus rule.

We propose to amend the following documents:

  • BCP 12-601 Designation as a Reporting Issuer (Extraprovincial Issuers) to replace the references to designating a person as a reporting issuer under paragraph (e) in the definition of 'reporting issuer' to a reference to s. 3.2 under the Securities Act to reflect amendments made to our Act in Bill 20. We are not publishing this change for comment.
  • BCI 81-801 Implementing National Instrument 81-106 Investment Fund Continuous Disclosure to remove section 5 of that implementing instrument, which provides relief from the prospectus financial statement requirements. The underlying requirements in the Securities Rules this instrument provides an exemption from are being eliminated. We are publishing this change for comment.

We propose to rescind or revoke the following documents:

  • BCI 41-501 Variation of Prospectus Disclosure Requirements for Issuers Using OSC Prospectus Rule
  • BCI 41-502 Firm Commitment Underwriting for Issuers using OSC Prospectus Rules
  • BCP 41-601 Prospectus Filing Requirements
  • BCI 44-502 Variation of BC Instrument 44-801 Implementing National Instrument 44-101 Short Form Prospectus Distributions, BC Instrument 44-802 Implementing National Instrument 44-102 Shelf Prospectus and BC Instrument 44-803 Implementing National Instrument 44-103 Post-Receipt Pricing
  • BCI 44-801 Implementing National Instrument 44-101 Short Form Prospectus Distributions¬†
  • BCI 48-501 Distribution Period for Firm Commitment Underwritings
  • BCI 81-503 Lapse Date of Prospectuses Filed by Mutual Funds, Employee Venture Capital Corporations, and Venture Capital Corporations

Act Amendments
In 2006 Bill 20, the Securities Amendment Act, 2006, received Royal Assent. BC Notice 2006/10 provides a more complete description of Bill 20. Of particular relevance to the general prospectus rule, are the amendments that would repeal the prospectus disclosure requirements, prospectus amendment requirement, prospectus lapse date regime, and prospectus certificate requirements. Instead of retaining these provisions in the Securities Act, we can achieve a more harmonized regime nationally by putting these requirements into the general prospectus rule. We expect to ask the government to bring these Act amendments into force when we are ready to implement the general prospectus rule, and related amendments.

Forms
The Executive Director also proposes to rescind the following forms in BCP 13-601 Required Forms:

  • Form 41-601F Information Required in a Prospectus
  • Form 81-902F Information Required in the Prospectus of a Mutual Fund

Implementing Instrument
Depending on when we can obtain an order in council to bring the Act amendments into force, when we can make all necessary rule amendments to eliminate inconsistency or duplication, or whether we require a transition period to ensure an orderly transition to the general prospectus rule, we may need to adopt an implementing instrument that would provide exemptions from certain requirements in the Securities Act or Securities Rules. We will determine whether an implementing instrument is necessary as we get closer to finalizing the general prospectus rule.

Questions
You may refer questions to:

Noreen Bent
Manager and Senior Legal Counsel
Legal Services, Corporate Finance
British Columbia Securities Commission
(604) 899-6741
(800) 373-6393 (in B.C. and Alberta)
nbent@bcsc.bc.ca

Allan Lim
Manager, Corporate Finance
British Columbia Securities Commission
(604) 899-6780
(800) 373-6393 (in B.C. and Alberta)
alim@bcsc.bc.ca


December 21, 2006

 


Douglas M. Hyndman
Chair


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.