Securities Law

LPS 3-03 - Requirements re Filing of Preliminary Prospectuses and Prospectuses (National Issues) [Rescinded]

Published Date: 1987-01-16
Effective Date: 1987-02-01
Rescinded Date: 1999-06-24

1.0          Implementation

1.1          This Local Policy Statement has been revised solely to conform with the Securities Act S.B.C. 1985 c.83 and the Regulations thereto.  Other than consequential amendments, there have been no changes of a substantive nature to this policy.  It becomes effective upon proclamation of the Securities Act on February 1, 1987.

2.0          Variation in Form and Content

2.1          Section 45(2) of the Act vests in the Superintendent the discretion to accept a form of prospectus or preliminary prospectus which accords with the law of another province, provided the prospectus contains full, true and plain disclosure.

2.2          This subsection of the Act in effect makes it possible for the Superintendent to be guided by National Policy statements when dealing with "National" prospectuses filed concurrently in one or more provincial jurisdictions in addition to British Columbia.  The issuer must elect to have the issue cleared under National Policy 1 if he wishes to have simultaneous clearance of his prospectus by a number of jurisdictions.

2.3          Where a receipt has been issued for a preliminary prospectus, such prospectus may be distributed by appropriate registrants as a means of soliciting an expression of interest from a prospective purchaser.  Registrants distributing a preliminary prospectus shall maintain a record in British Columbia of the names and addresses of all recipients of such prospectus, and the register shall be available for inspection by the Superintendent or his designee.

2.4          Where a receipt has been issued for a preliminary prospectus, Uniform Act Policy 2-13 shall apply to any newspaper advertisement published prior to the receipting of the final prospectus.

3.0          Material to be Filed with a National Prospectus

3.1          The requirements for documents filed in support of a national prospectus vary with the nature of the filing.  For purposes of convenience, the following filing classifications have been established:

3.1.1       B.C. prime junior companies, no-prime junior companies, and non-prime filings for junior companies planning to seek a listing on the Vancouver Stock Exchange;

3.1.2       B.C. prime major companies, non-B.C. prime companies other than those referred to in Section 3.1.1, and continuous offerings under National Policy 30.  In order to qualify as a major company for the purpose of this classification, an issuer should generally have a history of at least 5 years of dividend payments to shareholders, or may apply to the Superintendent to be treated as a major company for other reasons acceptable to the Superintendent.

3.2          For all filings in both categories described above, the covering letter accompanying the submission should include the following information:

3.2.1       Whether the filing is being made pursuant to National Policy 1.  If it is, the letter should identify the principal jurisdiction, the principal filing solicitor and the British Columbia agent filing solicitor, and should designate a recipient for prospectus receipts.  In accordance with National Policy 1, communications about deficiencies will be made through the principal jurisdiction unless other arrangements satisfactory to the principal jurisdiction are made.  Prior to electing British Columbia as the "principal jurisdiction" under National Policy 1, the issuer should check with the Director, Filings to insure that this jurisdiction will accept a designation as "principal".

3.2.2       If the issuer wishes to have its filing treated as a seasoned prospectus pursuant to National Policy 30, the covering letter should so state.

3.2.3       The covering letter must include a list of the accompanying documents as prescribed in Sections 3.3 and 3.4 below.

3.3          Materials Required for B.C. prime junior companies, no-prime junior companies and non-prime filings for junior companies planning to seek a listing on the Vancouver Stock Exchange. Local Policy Statement 3-02 applies to national filings in this category except that the form of prospectus, the cross-reference sheet and the financial statements may be those required by another jurisdiction in the case of non-primes and no-primes.  (Refer to Section 1, above).

Local Policy Statement 3-02 specifies requirements for covering letters in addition to those set out in Section 3.2 above as well as requirements for initial documentation, amended copy and final material.  The policy also describes the procedures followed for dealing with incomplete submissions.

3.4          Materials required for B.C. prime major companies, non-B.C.-prime companies other than those referred to in Section 3.1.1 and continuous offerings under National Policy 30.

3.4.1       Initial Submission    Filing fee - greater of $1000 or .01% of the total proceeds to be realized in British Columbia. 

Where the total proceeds cannot be ascertained at the time of the initial filing, the issuer must submit an undertaking to provide a breakdown of sales in B.C. together with any additional fees required within 10 days of the conclusion of the subscription.  Issuers making continuous offerings may file the required material with the next year's submission.    Preliminary prospectus accompanied by a dated certificate signed by the underwriters, if any, the chief executive officer, the chief financial officer, two other directors and a promoter.  Note the requirement of an extra red-lined copy of the preliminary prospectus if National Policy 30 clearance is elected.    Cross reference sheet keying the prospectus disclosure to the items set out in the applicable form (i.e. Form 12, 13, 14 or 15) or the applicable form prescribed by the legislation of the principal jurisdiction.    Financial statements either in accordance with Section 104 of the Regulations or in accordance with the applicable legislation of the principal jurisdiction.  Financial statements accompanying the preliminary prospectus may be submitted in draft form, accompanied by an auditor's comfort letter in the format specified in the CICA Handbook, Section 7000.10.    Although engineering reports and material contracts should not be filed initially with filings in these categories, they may be requested subsequently depending on the circumstances.

3.4.2       Final Material

The following comprises "final material" which must be submitted in acceptable form before a receipt for the final prospectus will be issued:    The final prospectus should be filed in duplicate - one copy in red-lined form to indicate changes made from the previous draft, the other copy in fully executed form.  A certificate must be signed by the chief executive officer, the chief financial officer, two other directors and a promoter.  A certificate must also be signed by all underwriters.    Updated cross reference sheet when major revisions to the prospectus have been made.    Financial statements.    Auditor's consent letter relating to the final prospectus and the financial statements.    Certified copy of the directors' resolution approving the definitive versions of the prospectus and the financial statements and designating the signatures for the certificate.    Underwriting or other agreement covering distribution where B.C. is the principal jurisdiction or if distribution arrangements in British Columbia vary in any respect from those of the principal jurisdiction.    Consent of other experts.    Disclosure of interest of experts.    Two commercial copies of the prospectus in the form used for delivery pursuant to Section 66 of the Act should be filed as soon as possible.

4.0          Follow Up Material

The processing of all material submitted subsequent to the initial prospectus filing will be expedited if the envelope and covering letter are clearly market "Follow-up Material" and directed to the attention of the analyst responsible for vetting the filing, where the analyst's name is known to the filing solicitor.  IF THE ANALYST'S NAME IS NOT KNOWN, THE MATERIAL SHOULD BE DIRECTED TO THE ATTENTION OF "SUPERVISOR, FILINGS".

Dated at Vancouver, B.C., this 1st day of February, 1987.


Jill Bodkin
B.C. Securities Commission