Securities Law

BCN2008/25 - Notice and Second Request for Comments British Columbia Instrument 51-509 Issuers Quoted in the U.S. Over-the-Counter Markets [BCN - Lapsed]

Published Date: 2008-05-14
Rescinded Date: 2012-07-13
Related Document(s):

Concurrently Published:

We are re-publishing proposed British Columbia Instrument 51-509 Issuers Quoted in the U.S. Over-the-Counter Markets for a 30-day comment period.  We are also publishing for the first time the related companion policy and forms.  We invite your comments on the proposed instrument, policy and forms.

In BC Notice 2007/33 (October 29, 2007), the Commission published for comment a previous version of the proposed instrument for comment.

In the Notice, we anticipated a proposed amendment to the Securities Act that would authorize the Commission to designate a class of issuers as reporting issuers under the Act.  That amendment has come into force and the proposed instrument reflects that approach.

Significant Changes to the Proposed Instrument from the Previous Version
We received 19 comment letters from the previous publication.  In response to the comments, the Commission made changes to the proposed instrument.  These are the most significant:

1. Criteria for designation as a reporting issuer
Under the proposed instrument, the issuer's

  • having a control person or promoter resident in British Columbia are not criteria for designation as a reporting issuer
  • having a majority of holders of its seed stock resident in British Columbia, or a majority of its seed stock held by residents of British Columbia, are not criteria for designation as a reporting issuer
  • distribution of a security to a resident of British Columbia before it obtains its ticker symbol is a criterion for designation as a reporting issuer

2. Foreign Issuer and MJDS Exemptions
Under the proposed instrument, an OTC reporting issuer may rely on exemptions from continuous disclosure requirements that are available to other reporting issuers that have a class of securities registered under section 12 of the United States Securities Exchange Act of 1934 or are required to file reports under section 15(d) of that Act, except for the exemption regarding material change reporting. All OTC reporting issuers must comply with the same timely disclosure requirements for material change reporting as domestic reporting issuers.

3. Reporting Period
Under the proposed instrument, an OTC issuer that becomes a reporting issuer must remain a reporting issuer for at least one year after:

  • its business has been directed or administered in or from British Columbia
  • investor relations activities, by or on its behalf, are carried on in or from British Columbia
  • its ticker-symbol date

4. Addition of CNQ to list of North American exchanges
Under the proposed instrument, the Canadian Trading and Quotation System Inc. is included in the list of exchanges in section 1(b) of the instrument (definition of OTC issuer).

5. Legending
The proposed instrument requires legending of securities that OTC reporting issuers distribute under exemptions from the registration and prospectus requirements of the Act.  The legend refers to the restrictions on resale of these securities, which have not changed.

Proposed Companion Policy
The proposed companion policy explains how the Commission interprets and applies the proposed instrument, and some of the details of the proposed regulatory regime for OTC reporting issuers.

Proposed Forms
There are four proposed forms: 

  1. 1. BC Form 51-509F1 OTC Issuer Ceases to be Reporting Issuer 
  2. 2. BC Form 51-509F2 Notice of Investor Relations Activities
  3. 3. BC Form 51-509F3 Personal Information Form and Authorization of Indirect Collection, Use and Disclosure of Personal Information
  4. 4. BC Form 51-509F4 Issuer Ceases to be OTC Reporting Issuer

Summary of Written Comments Received
Appendix A to this Notice lists those who commented on the October 2007 publication, summarizes their comments, and provides our responses.

Consequential Amendments
If the proposed instrument proceeds, the Commission will make necessary changes to the following instruments

  • BC Instrument 11-502 Voluntary Surrender of Reporting Issuer Status
  • BC Policy 11-502CP Companion Policy to BCI 11-502
  • BC Policy 13-601 Required Forms
  • BC Instrument 52-511 Relief for Venture Issuers from Reporting Issuer Status
  • National Instrument 71-102 Continuous Disclosure and Other Exemptions relating to Foreign Issuers
  • BC Instrument 72-502 Trades in Securities of U.S. Registered Issuers

We will publish updated versions of those instruments when we publish advance notice of the proposed instrument.

We welcome your comments on the proposed instrument, companion policy and forms.  Please submit your comments in writing on or before June 13, 2008.  We will not consider comments received after the deadline.

If you are not sending in your comments by e-mail, you should also send a diskette or CD-ROM containing your submission in Windows format, Word.

Please address your submission to the British Columbia Securities Commission.

Deliver your comments to:

Adrianne Marskell
Senior Compliance Counsel, Corporate Finance
British Columbia Securities Commission
P.O. Box 10142, Pacific Centre
701 West Georgia Street
Vancouver, British Columbia V7Y 1L2

We cannot keep submissions confidential because securities legislation requires publication of a summary of the written comments received during the comment period.

May 14, 2008


Brent W. Aitken
Vice Chair


Ref:  BC Notice 2007/33  Notice and Request for Comments - Proposed British Columbia Instrument 51-509 - Issuers Quoted on the U.S. Over-the-Counter Markets and Proposed Conditions of Registration for Investment Dealers that Trade in the U.S. Over-the-Counter Markets


This Notice may refer to other documents. These documents can be found at the B.C. Securities Commission public website atwww.bcsc.bc.cain the section Securities Law & Policy: Policies & Instruments.