Securities Law

BCN 2009/11 - Advance Notice of National Instrument 45-106 Prospectus and Registration Exemptions, National Instrument 45-102 Resale of Securities, Related Documents and Consequential Amendments [BCN - Lapsed]

Published Date: 2009-07-17
Rescinded Date: 2012-07-13
Related Document(s):

Concurrently Published:

In the attached advance notice, the Canadian Securities Administrators announce the expected implementation of National Instrument 45-106 Prospectus and Registration Exemptions (NI 45-106) its related forms and companion policy, and National Instrument 45-102 Resale of Securities and companion policy, effective September 28, 2009.

Substance and Purpose
The amendments to NI 45-106 are primarily technical and non-substantive.  The purpose of the amendments is to:

  • incorporate more local exemptions into the consolidated instrument,
  • further harmonize some exemptions for which NI 45-106 contains minor local differences,
  • resolve ambiguities in the current drafting, and
  • reflect decisions the CSA has made in granting exemptive relief on individual applications.

The purpose of the NI 45-102 amendments is to clarify:

  • how purchasers of securities are notified of resale restrictions where the purchaser does not receive a share certificate,
  • notice requirements when control persons sell their securities, and
  • the resale provisions applicable to securities distributed under certain exemptions in NI 45-106.

Securities Act Amendments
Certain amendments in Bill 20, the Securities Amendment Act, 2006, which received Royal Assent on May 18, 2006, repeal the prospectus and registration exemptions in the Securities Act.  We expect to ask the government to bring these Act amendments into force when we are ready to implement the amendments to NI 45-106 and NI 45-102.

Consequential amendments to Part 10 of the Securities Rules 
The Commission has approved repealing almost all the registration related sections in Part 10 of the Securities Rules. We attach the amending instrument for the Rules as Schedule A.

Local amendments
We will relocate the registration and prospectus exemptions in sections 45(2)(13) and 74(2)(12) of the Act (trades under a realization on collateral given for a debt) to proposed BC Instrument 45-528 Trades under a realization on collateral given for a debt.  We will retain this exemption because section (e) of the definition of “trade” in the Act includes a transfer of beneficial ownership of a security to a transferee, pledgee, mortgagee or other encumbrancer under a realization on collateral given for a debt.

We will relocate the registration and prospectus exemptions in sections 89(e) and 128(f) of the Rules (bonus or finder’s fee) to proposed BC Instrument 45-529 Bonus or finder’s fee. Retaining the bonus or finder’s fee exemption as a rule will allow us to retain the current fee structure for exempt distribution reporting for this exemption.

We will relocate the registration and prospectus exemptions identified above so that the exemptions are situated along with other registration and prospectus exemptions in the 5-digit national numbering scheme.  In addition, moving these exemptions to BC Instruments will enable us to revise an exemption more quickly if we determine it is no longer appropriate or effective.

The text of these amendments to the Rules and the proposed new BC Instruments is attached as Schedules B and C of the advance notice.

Consequential amendments to local instruments, policies and forms
We will also amend, repeal and replace, revoke or rescind the following BC Instruments, policies and forms to

  • eliminate local requirements, exemptions and guidance that are no longer necessary because they are covered in NI 45-106 and
  • make necessary reference changes.

We attach the amending instrument for a BC Instrument and Companion Policy as Schedules D and E; as well as orders revoking and rescinding other instruments, policies and forms as Schedules F to K to this notice.

We will amend:

  • Schedule D - BC Instrument 51-509 Issuers quoted in the US over-the-counter markets
  • Schedule E - Companion Policy 51-509CP Issuers quoted in the US over-the-counter markets
  • Schedule F - BC Policy 13-601 Required forms
  • Schedule G - BC Instrument 21-501 Recognition of exchanges, self-regulatory bodies and jurisdictions
  • Schedule H - BC Policy 45-601 Statutory and discretionary exemptions
  • Schedule I - BC Instrument 72-503 Distribution of securities outside British Columbia
  • Schedule J - BC Instrument 72-504 Distribution of Eurobonds
  • Schedule K - BC Interpretation Note 72-702 Distribution of securities to persons outside British Columbia

When NI 45-106 and NI 45-102 come into force, we will rescind or revoke the following:

  • BC Policy 12-602 Exempt purchaser status
  • BC Instrument 45-504 Trades to trust companies, insurers and portfolio managers outside British Columbia
  • BC Instrument 45-511 Trades of government warrants
  • BC Instrument 45-515 Resale of Rights
  • BC Instrument 45-522 Exemption from requirement to file reports of exempt distribution
  • BC Instrument 45-523 Transition period for minimum purchase price and asset acquisition exemptions
  • BC Instrument 45-525 Exemption for distribution reinvestment plans
  • BC Instrument 45-526 Removal of exemptions for rights offerings

The Executive Director will rescind the following forms in BCP 13-601 Required Forms:

  • BC Form 12 602F Application for exempt purchaser status
  • BC Form 32-901F Information statement required for exempt trades by not for profit issuers
  • BC Form 91-901F Put option contract
  • BC Form 91-902F Call option contract

Questions
You may refer questions to:

Gordon Smith
Senior Legal Counsel
British Columbia Securities Commission
(604) 899-6656
(800) 373-6393 (in B.C. and Alberta)
gsmith@bcsc.bc.ca

July 17, 2009

 


Brent W. Aitken
Acting Chair

Ref: National Instrument 45-106 Prospectus and Registration Exemptions
Companion Policy 45-106CP Prospectus and Registration Exemptions
National Instrument 45-102 Resale of Securities
Companion Policy 45-102CP Resale of Securities
BC Instrument 51-509 Issuers quoted in the US over-the-counter markets
Companion Policy 51-509CP Issuers quoted in the US over-the-counter markets
BC Policy 13-601 Required forms
BC Instrument 21-501 Recognition of exchanges, self-regulatory bodies and jurisdictions
BC Policy 45-601 Statutory and discretionary exemptions
BC Instrument 72-503 Distribution of securities outside British Columbia
BC Instrument 72-504 Distribution of Eurobonds
BC Interpretation Note 72-702 Distribution of securities to persons outside British Columbia
BC Policy 12-602 Exempt purchaser status
BC Instrument 45-504 Trades to trust companies, insurers and portfolio managers outside British Columbia
BC Instrument 45-511 Trades of government warrants
BC Instrument 45-515 Resale of Rights
BC Instrument 45-522 Exemption from requirement to file reports of exempt distribution
BC Instrument 45-523 Transition period for minimum purchase price and asset acquisition exemptions
BC Instrument 45-525 Exemption for distribution reinvestment plans
BC Instrument 45-526 Removal of exemptions for rights offerings
BC Form 12 602F Application for exempt purchaser status
BC Form 32-901F Information statement required for exempt trades by not for profit issuers
BC Form 91-901F Put option contract
BC Form 91-902F Call option contract


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.