BOR 91/12 - Government Strip Bonds [Rescinded]

IN THE MATTER OF THE SECURITIES ACT S.B.C. 1985, c.83 AND

IN THE MATTER OF GOVERNMENT STRIP BONDS

Order Under Sections 33 and 59

WHEREAS certain persons are distributing and trading in British Columbia

(a) actual individual interest coupons and residues arising from the physical separation of bonds, debentures or other evidence of indebtedness issued or guaranteed by the Government of Canada or by a province of Canada or by a country or political division of a country recognized by the British Columbia Securities Commission (the "Commission") in an order made under section 32(a)(i.1) of the Act, and

(b) deposit receipts or other certificates representing an interest in certain specific instruments of the type referred to in (a) or an undivided interest in a pool of these instruments,

where the purchaser's sole entitlement is to receive a fixed amount of money at a specific future date (together "Government Strip Bonds");

AND WHEREAS the Commission considers that to do so would not be prejudicial to the public interest;

IT IS ORDERED under sections 33 and 59 of the Act that sections 20 and 42 of the Act do not apply to a trade in Government Strip Bonds provided that an information statement approved by the Commission or the Superintendent of Brokers describing the investment attributes of Government Strip Bonds including, without limitation,

(a) the fluctuations in the value of Government Strip Bonds resulting from fluctuations in prevailing interest rates,

(b) the income tax consequences of investing and trading in Government Strip Bonds,

(c) the anticipated secondary market environment, and

(d) the custodial arrangements relating to such Government Strip Bonds,

is

(e) where the vendor is not registered under the Act, furnished to, and its receipt is acknowledged by, a first-time purchaser prior to the trade, or

(f) where the vendor is registered under the Act, furnished to a first-time purchaser not later than with confirmation of the trade.

DATED at Vancouver, British Columbia, on December 12, 1991.