Securities Law

LPS 3-26 - Statement of Material Facts Submitted to the Superintendent of Brokers and the Vancouver Stock Exchange for Vetting [Rescinded]

Published Date: 1987-01-16
Effective Date: 1987-02-01
Rescinded Date: 1996-01-01

1.0          IMPLEMENTATION

1.1          This Local Policy, Statement has been revised solely to conform with the Securities Art 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 Act on February 1, 1987.

2.0          DOCUMENTS TO BE FILED

2.1          The documents required to be filed in support of a Statement of Material Facts have been segregated between those required by the Superintendent and those required by the Vancouver Stock Exchange.  This segregation reflects a division in the vetting responsibilities between the office of the Superintendent and the Exchange.

2.2          Covering letters directed to each of the Superintendent and the Exchange should accompany, the Statement of Material Facts. Each letter should delineate the relevant documentation being submitted (see Section 2.3 for items to be submitted to the Superintendent and Section 2.4 for items to be submitted to the Exchange) and should identify the documents by the lettering system indicated in Section 2.3 and 2.4. Where several documents of the same category (e.g. engineering reports) are being submitted, each document should be named separately, and identified appropriately, (e.g. (E)H-1, (E)H-2, etc.) in the sequence in which there is disclosure in the Statement of Material Facts.

2.3          Documents Required to be filed with the Superintendent

The documents required to be filed are as follows:

(S)A.      Filing Fee of $500.00.

(S)B.      Statement of Material Facts, in duplicate, in conformity with Form 24 of the Regulations, accompanied by a certificate signed by the underwriters and at least one director and dated.  The final draft of the Statement of Material Facts must be fully executed and contain the financial statements and the Engineering reports or summaries thereof.

(S)C.      A statement by the issuer, signed by a director or the secretary confirming as to whether:

(a)           the issuer has mailed to shareholders all mailings required by the Company Act, i.e. interim financial statements per Section 197 and annual financial statements and information circular or alternatively, the mailings required in the appropriate jurisdiction.

(b)           quarterly report filings are up-to-date with the Exchange and the Superintendent.

and setting out:

(c)           the roster of the issuer's Audit Committee (Section 211, Company Act for issuers incorporated under the laws of British Columbia.) Where the issuer is not required by law to have an Audit Committee, particulars to this effect should be included in the covering letter.  Where the Issuer elects to disclose the roster of the Audit Committee in the statement of material facts, a note to this effect in the covering letter will suffice.

(S)D.      Form 4 unless one has been filed with the Superintendent during the 3 year period prior to the date of the certificate for all directors, senior officers and market makers other than the underwriter.

(S)E.      Statement signed by each director and officer confirming the following:

(a)           that he has submitted a Form 4 within a 3-year period preceding the date of the Statement of Material Facts.

(b)           that his insider reports are up-to-date.

The statement should be dated and should identify the company for which the Statement of Material Facts has been submitted.

(S)F.       Where a Section 59 order is required with respect to issuance of shares approved by the Vancouver Stock Exchange in a Statement of Material Facts, the application, the fee, and any other documentation or information required by Local Policy 3-24 should be submitted with the Statement of Material Facts, so that the Section 59 determination can be made at the same time as the acceptance of the Statement of Material Facts by the Superintendent.

Local Policy 3-24 requires the submission of ruling in form for signature by the Superintendent.  Where the terms of the transaction accepted differ from those initially disclosed, it may be necessary to submit an amended ruling incorporating any changes.

(S)G.      Where a transaction involving a material share issuance (i.e. an issue of treasury shares aggregating 20% or more of the issuer's current shares outstanding) is disclosed in a Statement of Material Facts, adequate documentation in the form of an evaluation and/or technical report to support the value of the property being acquired for the share consideration.

2.4          Documents Required to be filed with the Exchange.

The documents required to be filed are as follows:

(E)A.      Filing Fee.

(E)B.      Statement of Material Facts, in duplicate, as in 2.3B.

(E)C.      A statement by the issuer, signed by a director or the secretary confirming as to whether:

(a)           the issuer has mailed to shareholders all mailings required by the Company Act, i.e. interim financial statements per Section 197 and annual financial statements and information circular or alternatively, the mailings required in the appropriate jurisdiction.

(b)           quarterly report filing are up-to-date with the Exchange and the Superintendent.

(E)D.      Power of Attorney for any director signing the Statement of Material Facts by power of attorney.

(E)E.      Financial statements approved in accordance with the Regulations.

(E)F.       A certified copy of the directors' resolution approving the financial statements and giving two directors authority to sign must accompany all financial statements.

(E)G.      Fully executed underwriting or agency agreement as well as verification prior to acceptance, that the agreement is still in effect.

(E)H.      Engineering reports, filed in duplicate, prepared in accordance with National Policy 2, Local Policy 3-01 and Forms 54 and 55 on any resource property on which proceeds are to be spent.  The engineers's report must be accompanied by a certificate in the form prescribed by Regulation 103.  One copy of the report and the certificate must be originally signed and the original signed certificate must be signed under seal.  The engineer preparing the report must be independent of the issuer and may not have an interest in the property reported on or in the securities of the issuer.

A summary of the report prepared by the engineer or by the directors and approved by the engineer may be submitted with the report and may be printed in the Statement of Material Facts instead of the full report.  The Statement of Material Facts should state where the full report is available for review.

Market study or feasibility study, where applicable for an issuer other than a natural resource issuer should be included.

(E)I.        The engineer's report must be accompanied by the engineer's consent to the inclusion of his report in the Statement of Material Facts, as required by National Policy 2. The consent letter must be originally signed.

In the event that a summary of the report is to be printed instead of the full report, the engineer must provide an originally signed letter consenting to the inclusion of the summary only in the Statement of Material Facts.

(E)J.       A certified copy of the title opinion verifying the title to all mining properties on which it is proposed to spend any part of the net proceeds and/or all mining properties being acquired.  For oil and gas properties, title opinions should be supplied only on request.

Ordinarily, the Exchange will seek assurance that a satisfactory title opinion has been obtained or will be obtained prior to drilling.

(E)K.       Certified copies of all property agreements to which the Issuer is a party and not previously filed.

(E)L.       Certified copies of all other material contracts not previously filed.

(E)M.      Disclosure of "interest of solicitors" (Solicitor's Certificate) prescribed in Local Policy Statement 3-41.

3.0          INCOMPLETE SUBMISSIONS

3.1          Section 178(2) of the Regulations provides that, where any material is filed with the Superintendent and the material is not prepared in accordance with the Act, the Superintendent may return the material to the person by whom or by which it has been filed.

3.2          A Statement of Material Facts will be returned to the sender where the certificate has not been dated and originally executed by one director and the underwriter.

3.3          At his discretion, the Superintendent may permit vetting of the Statement of Material Facts to proceed where one or more requirements, other than those listed in the preceding paragraph, have not been met.  The covering letter to the Superintendent referred to above should state clearly what documentation has not been supplied, the reason it has not been supplied, and the date it may be expected.

4.0          "RED-LINED" COPY AND OTHER FOLLOW-UP MATERIAL; FINAL MATERIAL

4.1          "Red-Lined" copy should be directed both to the Superintendent and the Exchange.  While this Local Policy contemplates that the majority of responses to deficiencies will involve the forwarding of amended documentation to, the Exchange, any amended documentation responding to a matter indicated in Section 2.3 should be forwarded to the Superintendent.  The front page of a covering letter and the envelope for submission of "red-lined" copy and other follow-up material to the Superintendent should contain the entire undernoted wording:

"Attention: Supervisor, Operations Follow-up Material for S.M.F. Filing Filed on behalf of ________________."

4.2          Unless the issuer is given specific direction to the contrary, final material for and definitive commercial copies of a statement of material facts need be directed solely to the Exchange which in turn will forward specified definitive material to the Superintendent.

5.0          AMENDMENTS TO STATEMENTS OF MATERIAL FACTS.

This section applies to amendments filed under Section 118 of the Regulations.

5.1          Covering letters as described in Section 2.2 should accompany the submission of a single copy of a statement of material facts amendment to the Superintendent and of duplicate copies of the amendment to the Exchange, together with the applicable filing fees.

5.2          Where the amendment covers matters identified in Section 2.3 as of concern to the Superintendent, appropriate documentation in support of the amendment should be submitted to the Superintendent.  Conversely where the amendment covers matters identified in Section 2.4, appropriate supporting documentation should be submitted to the Exchange.

 

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

Jill Bodkin
Chairman
B.C. Securities Commission