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Securities Law

NIN 2000/20 - Publication for Comment of Proposed Commission Rule 45-502 (BC) and Companion Policy relating to Cooperative Associations [NIN - Rescinded]

Published Date: 2000-06-02
Effective Date: 2000-06-01

The Commission is publishing for comment proposed Commission Rule 45-502 (BC) Cooperative Associations (the “Proposed Rule”) and proposed Companion Policy 45-502CP (BC) (the “Proposed Policy”). The Proposed Rule and Proposed Policyrelate to securities issued by cooperative associations to which the Cooperative Association Act, S.B.C. 1999, c. 28, as amended1

1 The Cooperative Association Act is amended by the Cooperative Association Amendment Act2000, Bill 9, which passed third reading on May 9, 2000.

(the “new CAA”), applies.


Sections 46(h) and 75(a) of the Securities Act currently exempt from the registration and prospectus requirements any securities issued by a cooperative association. In relation to share capital, the current Cooperative Association Act, R.S.B.C. 1996, c. 71 (which will be repealed when the new CAA is in effect)permits cooperative associations to issue only membership shares.

The new CAA, which is not yet in effect, will permit cooperative associations to issue both membership and investment shares. With the introduction of investment shares, which can be issued to non-members as well as to members, it was necessary to limit the breadth of the exemption available to cooperative associations. The new CAA amends section 46(h) of the Securities Act by requiring that securities that cooperative associations issue under the exemption in that section must comply with prescribed conditions.

The new CAA will come into effect on proclamation. The Commission anticipates adopting the Proposed Rule at the same time, after consideration of comments received on the Proposed Rule.

The Proposed Rule

The Proposed Rule sets out the prescribed conditions for exemptions for

  • trades by a cooperative association in its own issue of membership shares, investment shares, securities issued as a dividend, as interest or as a patronage return, and
  • trades between members of a cooperative association.

The Proposed Policy describes the use of existing statutory exemptions that cooperative associations may be able to use and that are available to issuers in general. The Proposed Policy refers to the delivery of an offering memorandum to purchasers as a requirement of certain exemptions.

Staff is interested in receiving comments on the Proposed Rule, including specifically on whether cooperative associations would have difficulty using the form of offering memorandum (Form 43) which is attached to the Proposed Policy and, if so, what changes are required to make it more suitable for cooperatives.

Interested persons are encouraged to direct written comments by August 1, 2000 to:

Brenda J. Benham
Policy and Legislation
British Columbia Securities Commission
200 - 865 Hornby Street
Vancouver, BC V6Z 2H4

Questions may be referred to:

Veronica Armstrong
Senior Policy Advisor
Policy and Legislation
British Columbia Securities Commission
200 - 865 Hornby Street
Vancouver, BC V6Z 2H4
(604) 899-6738
or (800) 373-6393 (in B.C.)

DATED at Vancouver, British Columbia, on June 1, 2000.

Douglas M. Hyndman

This NIN refers to other documents. These documents can be found at the B.C. Securities Commission public website at in the Policy Documents database.