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Securities Law

NIN 88/05 - Guidelines for Applications to the Securities, Commission of the Superintendent of Brokers for Decisions or Orders [NIN - Rescinded]

Published Date: 1988-04-08
Effective Date: 1988-03-31

This notice is intended to serve as a guideline, in conjunction with Local Policy Statement 3-24 (which is currently under review), for applications to the British Columbia Securities Commission (the "Commission") and the Superintendent of Brokers (the "Superintendent") for decisions or orders granting relief from certain requirements of the Securities Act, S.B.C. 1985, c.83, (the "Act"), the Securities Regulation, B.C. Reg. 270/86 (the "Regulation") and the Company Act, R.S.B.C. 1979, c.59 (the "Company Act") (collectively, the "Legislation").

This notice sets out the procedure for submitting applications made under the sections of the Legislation set out below, as well as the required form and content of application letters and draft orders. The verification described in Section 3(e) of this notice is a new requirement and must be included with all applications made after May 1, 1988.

1. Types of Applications

1.1 The procedures described in this notice apply to all applications made to the Commission or the Superintendent under the following sections of the Legislation:

Section of the Act Section of the Regulation
33(1) 4(8)(b)
51(7) 104(6)
59(1) 119
72 142(5)
97 143
103(2) 149
107 152.2
108(b) 153
153* Section of the Company Act

*Where an application made under Section 153 of the Act relates to a decision following a hearing, the procedure set out in NIN#87/33 should be followed.

1. 2 In addition, other sections of the Legislation and some of the Local Policy Statements provide for decisions to be made by the Commission or the Superintendent that do not require the formal application contemplated herein. Applicants will, however, be subject to the requirements of the applicable sections of the Legislation or the Local Policy Statements.

1.3 If a statutory exemption exists and can be relied upon for any part of a proposed transaction, an exemption order for that part of the transaction should not be sought.

1.4 The sections of the Legislation referred to in Section 1.1 of this notice empower either the Commission or the Superintendent to grant orders or to make decisions. Careful attention should be paid to whether an application is required to be made to the Commission or to the Superintendent. Applications to the Commission and the Superintendent can be made in the same submission but the orders must be kept separate.

2. Submission of Applications

2.1 All applications must be addressed to:

Manager, Exemptions and Orders
British Columbia Securities Commission
1100 - 865 Hornby Street
Vancouver, B.C.
V6Z 2H4

2.2 An application should be submitted well in advance of the proposed transaction for which an order or decision is sought. The Commission and the Superintendent will generally not issue orders which have a retroactive effect.

2.3 In order for applications to be processed by the Commission staff, they must be complete when submitted. Each application should consist of:

(a) an application letter setting out the information described in Section 3 of this notice, either originally signed by the applicant or, if submitted by the applicant's agent, accompanied by a verification described in Section 3(e) of this notice;

(b) one copy of all supporting material;

(c) two copies of the draft order in the form described in Section 4 of this notice; and

(d) the applicable filing fee as referred to in Section 5 of this notice.

2.4 Additional material filed in respect of an application should be addressed to the staff member handling the application and the envelope and the covering letter should be marked "Follow-up Material".

2.5 Any revised draft order submitted as follow-up material should be accompanied by a black-lined copy indicating the amendments made by the applicant to the order previously submitted.

3. Required Elements of the Application

Each application should be divided into sections and include the information, where relevant, indicated below:

(a) Summary

(i) the name of the issuer;

(ii) the name of the applicant (if different from the issuer);

(iii) the section of the Legislation pursuant to which the application is made; and

(iv) the nature of the relief sought.

(b) The Issuer

(i) the name of the issuer;

(ii) jurisdiction and date of incorporation, organization or continuation;

(iii) capital structure - authorized and issued capital and debt obligations (where not otherwise dealt with in an exhibit such as financial statements or an annual report);

(iv) whether the issuer is a reporting issuer;

(v) whether the issuer is an exchange issuer;

(vi) listing status - whether listed on the Vancouver Stock Exchange or any other stock exchange or trading over-the-counter and recent price and volume trading data; and

(vii) a statement that the issuer, if it is a reporting issuer, is not in default of any requirement of the Act or the Regulation.

(c) The Applicant

If the applicant is a person other than the issuer, include those items in clause (b) which are relevant to the applicant and explain the applicant's relationship to the issuer.

(d) Order or Decision Sought

The application should clearly set out all relevant information and argument in support of the request for the granting of the order. The submission should clearly show that the applicant falls within the spirit of the Legislation. The information and argument should include:

(i) the facts on which the application is based;

(ii) the reasons for making the application;

(iii) relevant considerations including case law, prior decisions of the Commission or the Superintendent, parallels between statutory exemptions which may not be relied upon by the applicant in the particular circumstances for some technical reason and policies and argument regarding the foregoing;

(iv) other relevant circumstances including regulatory decisions of other jurisdictions or regulatory bodies or similar applications pending in other jurisdictions; and

(v) supporting documents - such documents may be included as schedules or exhibits to the application and references in the application may be made to such supporting documents.

(e) Verification

Each application must be signed by the party submitting the application and must contain a statement certifying the truth of the facts contained therein. If the application is not signed by the applicant and is made by an agent for the applicant, such statement may be omitted if the application is accompanied by a separate written statement signed by the applicant authorizing the agent to prepare and file the application and confirming the truth of the facts contained in the application. Sample language might include:

"We authorize the making and filing of the attached application by ____________________________________ and confirm the truth of the facts contained herein.

DATED at _____________________ this ______ day of__________, 19

authorized officer"

4. Conventions for Drafting Orders

4.1 Headings

(a) Every draft order should have a heading which refers to the Act or the Company Act and sets out the name of the issuer and any other party seeking the order.

(b) Every draft order should also have a sub-heading which refers to the section of the Legislation under which the request for the order is being made. If the application is being made under the Act, no reference to the Act need be made in the sub-heading.

(c) Applicants are encouraged to refer to Chapter 3 of the Weekly Summary published by the Commission for examples of orders previously granted by the Commission and the Superintendent.

4.2 Recitals

(a) The first recital should start with the word "WHEREAS" and all subsequent recitals should start with the words "AND WHEREAS".

(b) The first recital should state the name of the applicant, whether the application is being made to the Commission or the Superintendent, the section of the Legislation under which the order is requested and the specific requirements from which the applicant is seeking relief.

(c) The basis on which the order is being sought should be clear from the facts set out in the recitals. Accordingly, representations should be included in a recital which give all necessary background information and show why the order should be granted. The representations should show that the applicant falls within the spirit of the Legislation and that the granting of the order would not be prejudicial to the public interest.

(d) The last recital should confirm that the specific requirements of the section of the Legislation under which the request for the order is being made have been satisfied. For example, the last recital for orders under Section 59(l) of the Act should read:

"AND WHEREAS the Superintendent considers that to so order would not be prejudicial to the public interest;"

4.3 Operative Part of the Order

(a) The operative part should commence with the words "IT IS ORDERED" or "IT IS DECIDED", as the case may be, rather than "IT IS RULED".

(b) The wording should reflect the discretionary power granted to the Commission or the Superintendent under the applicable section of the Legislation. For example, Section 59 of the Act gives the Superintendent the power to exempt a person or class of persons from Section 42 of the Act, not to exempt a trade.

(c) Any conditions, such as filing requirements and resale restrictions, that would have applied had the applicant been able to rely upon a statutory exemption, which for technical reasons could not be relied upon by the applicant, should be included in the order. If the applicant feels that certain conditions are not appropriate in the particular circumstances of the case, reasons should be given in the application.

4.4 General Drafting Rules

(a) The "Act" may be used as a defined term for the Securities Act, S.B.C. 1985, c.83 provided that it is defined in the first recital in the following way:

" ... has made application to the... for an order under Section ________ of the Securities Act, S.B.C. 1985, c.83 (the "Act") ... "

(b) The "Regulation" may be used as a defined term for the Securities Regulation, B.C. Reg. 270/86, provided that it is defined as follows:

" ... the Securities Regulation, B.C. Reg. 270/86 (the "Regulation")..."

(c) The full term "Superintendent of Brokers" should be used in the order unless it has been defined as the "Superintendent". Similarly, reference should be made to the "British Columbia Securities Commission" unless it is defined as the "Commission".

4.5 Form of Orders

(a) Proofreading of draft orders is essential as orders in an acceptable form are copied directly onto the letterhead of the Commission or the Superintendent, as the case may be.

(b) Orders should be typewritten on 8-1/2" x 11" plain paper, single spaced, with room left at the top of the page for the appropriate letterhead and at the bottom of the page for the appropriate signature.

(c) Each draft order should be submitted unfolded.

(d) In an effort to speed up the processing of applications, all corrections and redrafting will be done by the applicant or his agent.

5. Filing Fees

5.1 Each application must be accompanied by the applicable filing fee as prescribed in the Regulation. Applications submitted without the prescribed filing fee will not be processed until the fee is received by the Commission.

5. 2 An additional fee is prescribed in the Regulation for expedited or complex applications. Satisfactory evidence of circumstances requiring immediate attention must be provided if an application is to be processed on an expedited basis; otherwise it will be dealt with as promptly as possible. The additional fee for complex orders will normally be requested by the Commission when the time required to assess and process an application is significantly longer than usual.
5.3 Fees should be paid by cheque made payable to the "Minister of Finance".

6. Procedure for Processing Applications

6.1 Upon receipt of a complete application, a member of the Commission staff will be assigned to review the application and recommend disposition.

6.2 The staff member may contact the applicant if further information or clarification is required. Where such information or clarification is not provided by the applicant within a reasonable period of time, the Commission or the Superintendent, on its or his own motion or on the recommendation of the staff member, may decide that the application should be treated as abandoned. No application will be treated as abandoned simply because a staff member has not had an opportunity to review it.

DATED at Vancouver, British Columbia, this 31st day of March, 1988.

Neil de Gelder
Superintendent of Brokers