Securities Law

BCN 2011/13 - Publication for Comment of Proposed Multilateral Instrument 51-105 Issuers Quoted in the U.S. Over-the-Counter Markets [BCN - Lapsed]

Published Date: 2011-06-13
Rescinded Date: 2012-05-10
Related Document(s):

Concurrently Published:

BC Instrument 51-509 Issuers Quoted in the U.S. Over-the-Counter Markets designates as reporting issuers in BC, issuers whose securities are quoted only on a U.S. OTC market and that have a significant connection to BC.

The Canadian Securities Administrators propose re-formatting the BC rule as Multilateral Instrument 51-105 Issuers Quoted in the U.S. Over-the-Counter Markets, to be adopted by all Canadian jurisdictions, except Ontario.

In re-formatting the BC rule as MI 51-105, we streamlined compliance and improved investor protection and made related amendments to the forms, companion policy and local instruments and policies. These changes are not significant and are briefly described below. 

Streamlining Compliance

1. Securities for services
BCI 51-509 restricts an OTC reporting issuer from using the securities for debt prospectus exemption.  In MI 51-105, we propose allowing OTC reporting issuers to use the exemption when issuing shares for services to related parties provided the consideration is reasonable, the debt is bona fide, and the price is at least market price. 

2. Use of SEC Form 8-K as a material change report
Under BCI 51-509, an OTC reporting issuer must file a copy of its news release and a material change report.  In MI 51-105, we propose permitting the issuer to file its SEC Form 8-K Current Report instead of a material change report. 

3. Resale of seed stock exemptions
In BCI 51-509, we provide an exemption for the resale of seed stock. In MI 51-105, we propose adding resale exemptions for corporate transactions, including bids, amalgamations, reorganizations and dissolutions.

4. Addition of shorter form of Personal Information Form
BCI 51-509 requires a person to file a personal information form.  In MI 51-105, we propose permitting a person to file a shorter form of personal information form. Specifically, if a person has filed a personal information form to the Commission, the Toronto Stock Exchange or TSX Venture Exchange and the information has not changed, the person may instead file Form 51-105F3B Personal Information Form and Authorization of Indirect Collection, Use and Disclosure of Personal Information.

5. Definition of promotional activities
BCI 51-509 relies on the definition in the Securities Act (British Columbia) of investor relations activities. In MI 51-105, we propose including a similar definition of those activities. 

Improving Investor Protection

6. Insider reports
In BCI 51-509, insiders of OTC reporting issuers may comply with their obligations to file insider reports by complying with their insider reporting obligations under U.S. federal securities law.  However, insiders of some OTC issuers are not required to file insider reports under U.S. federal securities law.  In MI 51-105, we propose adding a provision that requires these insiders to file insider reports in Canada.   

7. Certification requirements
In MI 51-105, we propose requiring OTC reporting issuers to file the same certificates as venture issuers for annual and interim filings.

Related amendments

In BCI 51-509, the forms are not part of the rule. The executive director specified the forms under the Securities Act. We propose rescinding the forms because they will be part of MI 51-105.

We propose amending

  • BC Instrument 11-502 Voluntary Surrender of Reporting Issuer Status and its companion policy, and
  • BC Instrument 71-503 Material Change Reporting by OTC reporting issuers

to change the references in those documents to Multilateral Instrument 51-105 Issuers Quoted in the U.S. Over-the-Counter Markets.

We propose amending BC Policy 13-601 Required Forms to state that MI 51-105 sets out the personal information required to be filed in connection with OTC reporting issuers.

We propose revoking BC Instrument 52-511 Relief for OTC Reporting Issuers from Certain Certification Requirements

CSA Notice
The CSA Notice published on June 10, 2011 describes where you can direct your comments and questions relating to MI 51-105.

June 13, 2011


Brenda M. Leong


This Notice may refer to other documents. You can find these documents on the B.C. Securities Commission public website at in the Policies & Instruments or Historical Policies & Instruments sections of the website.