NIN 93/22 - Amendments to National Policy Statement No. 47 and National Policy Statement No. 45 [NIN - Rescinded]

I. INTRODUCTION

In June 1993, the Canadian Securities Administrators (the "CSA") released for comment draft amendments ("NP 47 Draft Amendments") to National Policy Statement No. 47 ("NP 47") as well as draft amendments (the "NP 45 Draft Amendments") to National Policy Statement No. 45 ("NP 45") (the NP 47 Draft Amendments and the NP 45 Draft Amendments are referred to collectively as the "Draft Amendments"). Subsequent to the publication of the Draft Amendments, the CSA identified further technical changes that should be made to NP 47. The CSA are now issuing amendments (the "NP 47 Amendments") to NP 47 and amendments (the "NP 45 Amendments") to NP 45 in their final form which are effective on December 31, 1993. The Commission is publishing the NP 47 Amendments and the NP 45 Amendments in the Weekly Summary of December 17, 1993.

NP 47 is a national policy statement that, together with the related blanket orders, rulings and waivers by the Canadian securities regulatory authorities provides for a national prompt offering qualification system (the "POP System"). NP 45 is a national policy statement that, together with the related blanket orders and rulings by the Canadian securities regulatory authorities adopts in Canada a Canada - U.S. Multijurisdictional Disclosure System (the "MJDS").

NP 47 was not adopted in Quebec because the POP System is provided for in the Securities Act (Quebec) and its Regulation. At the time of the implementation of the national POP System, the Commission des valeurs mobilières du Québec ("CVMQ") had indicated that the POP System in Quebec had been designed to be compatible with the national POP System. The CVMQ intends to propose amendments to reduce eligibility requirements from 36 months to 12 months as well as any other amendments that may be necessary to maintain this compatibility.

The MJDS was implemented in Canada in the summer of 1991 through the publication of NP 45 together with the issuance of blanket orders and rulings by the Canadian securities regulatory authorities. The U.S. Securities and Exchange Commission ("SEC") enacted rules, forms, and schedules to implement a parallel system in the United States (the "U.S. MJDS").

The SEC released for comment in May 1993 proposed amendments to the U.S. MJDS including amendments reducing eligibility thresholds, recognizing bond rating agencies that the CSA recognize, and permanently requiring reconciliation to U.S. GAAP for filings under U.S. Forms F-10 and 40-F. On June 28, 1993 the SEC removed the Sunset provision and indefinitely continued the GAAP reconciliation requirement. In a meeting on November 3, 1993 the SEC adopted the proposed amendments. These amendments became effective upon publication in the Federal Register, 58 Fed. Reg. 62088 (November 29, 1993), except that the amendments to Form F-9 to recognize investment grade ratings by rating organizations recognized by the CSA will be effective upon publication by the SEC of a notice of effectiveness.

In the United States, pursuant to recent amendments to the SEC's shelf registration rule (Rule 415), issuers are permitted to make a shelf registration of a dollar amount of securities without specifying the amount of each class of securities being registered. While amendments to National Policy Statement No. 44 ("NP 44") to allow such an unallocated shelf prospectus are currently under consideration, no proposal is being made by the CSA at this time.

II. AMENDMENTS TO NP 47

Following is a summary of the NP 47 Amendments that were introduced as Draft Amendments in NIN#93/13.

A. Eligibility Requirements

NP 47 provides that an issuer is eligible to participate in the POP System if, among other things, it has been a reporting issuer for 36 months. In October 1992, the SEC adopted changes to its short-form (Form S-3) system which, among other things, reduced the reporting history requirement for this system from 36 to 12 months. The CSA specifically requested comment on whether the reporting history requirement for access to the POP System should be reduced from 36 to 12 months. The comment letters received supported this change. The reporting history requirement in NP 47 is being amended so that an issuer that has been a reporting issuer for 12 months has access to the POP System if it satisfies the other eligibility requirements.

B. Definition of Associate

The NP 47 Amendments amend the definition of "associate" contained in NP 47 for the purpose of determining the eligibility of an issuer to participate in the POP System.

The definition of "associate" in NP 47 provides that a relative of a person or any individual either married to or living with a person as husband or wife is an "associate" of that person for the purpose of determining issuer eligibility, whether or not such persons have the same home. However, relatives of the individual married to or living with a person as husband or wife are only considered to be "associates" of a person if they have the same home. Paragraphs (d) and (e) of the definition of "associate" are being amended so that each individual referred to in these paragraphs will only be an "associate" of a person if he or she has the same home as that person.

The purpose of this amendment is to make the definition of "associate" consistent with the definition of that term in the securities legislation of various Canadian provinces and territories and the published interpretation thereof.

C. Disclosure of Ratings Received from Approved Rating Organizations

Currently, subparagraph (5) of Item 10 of Appendix B to NP 47 exempts prospectuses filed in accordance with the U.S. MJDS from the requirement to disclose ratings received from "Approved Rating Organizations". This exemption was provided because the Canadian Rating Organizations were not nationally recognized statistical rating organizations ("NRSROs") for purposes of obtaining relief from the consent requirements of the U.S. prospectus requirements and civil liability. On November 3, 1993, the SEC adopted certain amendments to the U.S. MJDS which, among other things, recognize Canadian Rating Organizations for U.S. MJDS purposes. As part of these amendments, the Canadian Rating Organizations recognized by the CSA are exempt from the U.S. consent requirements for purposes of filings under the U.S. MJDS. Accordingly, the exemption from the requirement to disclose ratings in NP 47 prospectuses also filed in the U.S. under the U.S. MJDS will no longer be necessary and is being deleted.

D. Housekeeping Amendments

Instruction 2 of Appendix A to NP 47 indicates that the AIF shall be dated no earlier than the date of the auditor's report on the annual financial statements for the financial year covered by the AIF. Instruction 2 is being changed to indicate that the disclosures made in the AIF shall be no later than the date of the AIF.

To facilitate the administration of NP 47, NP 47 is being amended to provide that the Applicable Regulator (as defined in NP 47) may delegate the authority to accept a Renewal AIF to staff.

Item 8 of Appendix A to NP 47 provides that an issuer must include a statement in its AIF indicating that the issuer will provide certain documents to any person who requests them. Section 5.4 of NP 47 provides that an issuer may satisfy the requirement to file an AIF by filing an annual report on SEC Form 10-K or SEC Form 20-F, however the annual report on SEC Form 10-K or SEC Form 20-F does not include the information required by Item 8. Item 8 is being amended to provide that an issuer that files an annual report on SEC Form 10-K or SEC Form 20-F will file with the Applicable Regulator an undertaking to provide certain documents to any person who requests them.

Certain accounting housekeeping amendments are being made. The amendment to Schedule 1 to Appendix A to NP 47 and the principal products disclosure in the AIF, is to eliminate the requirement to disclose consolidation adjustments and to clarify that information should be disclosed about sales to third parties and investees separately.

Minor changes are also being made to the disclosure requirements with respect to intangible assets by incorporating recent amendments to the CICA Handbook section on capital assets. Drafting changes for greater clarity are being made to the loan disclosure requirements for financial institutions and to the net income per share disclosure requirement. Finally, a revision to the principal properties disclosure is being made that would broaden the requirements to non-manufacturing operations. The existing requirements focus primarily on manufacturing properties, which causes some difficulty for retailers and service companies.

E. Additional Amendments to NP 47

Subsequent to the publication of the Draft Amendments, the CSA identified additional technical amendments which are required to be made to NP 47 and are discussed below.

1. Disclosure of Ratings Received from Approved Rating Organizations

Subparagraph (5) of Item 10 of Appendix B to NP 47 is being amended for greater clarity and to conform to the requirements of subparagraphs 4.3(1)(a)(ii) and (b)(iii) of NP 47 to provide that disclosure of ratings in a preliminary short form prospectus is not required for prospectuses filed in accordance with NP 44. Subparagraph (5) of Item 10 of Appendix B to NP 47 is also being amended to expressly provide that disclosure of ratings in a short form prospectus is required for prospectuses filed in accordance with NP 44. The CSA intend to amend NP 44 to require disclosure of ratings received from an approved rating organization on the securities being distributed pursuant to NP 44 and to clarify that disclosure of such ratings may be made in the prospectus supplement or the pricing supplement as appropriate. Pending this proposed amendment to NP 44, the required disclosure of ratings in prospectuses filed under NP 44 may be given in this way since the prospectus supplement, including the pricing supplement which is a special form of prospectus supplement by definition, is deemed to be incorporated by reference into the prospectus under NP 44.

2. Documents Incorporated by Reference in Short Form Prospectus

One of the fundamental premises underlying the POP System is that a short form prospectus can be used to distribute securities instead of a long form prospectus because the liability provisions of securities legislation apply to the same information that would be provided in a long form prospectus through inclusion or incorporation by reference of all information that would be in a long form prospectus into the short form prospectus. In order to use the POP System, a short form prospectus must incorporate by reference the issuer's AIF, material change reports, financial statements and information circular. Omitted from this list is the annual filing made instead of an information circular. NP 47, therefore, is being amended to require the incorporation by reference of an annual filing made instead of an information circular. The effect of this change is to ensure that liability attaches to the same information whether or not the issuer using the POP System has outstanding voting securities.

3. Executive Compensation

In the fall of 1993, certain jurisdictions adopted new executive compensation disclosure rules ("the new rules"). The new rules require, among other things, disclosure in information circulars or annual filings made in lieu thereof, of option and SAR repricings, the composition of the compensation committee, the report of the compensation committee and a performance graph as part of executive compensation disclosure. They provide, however, that this disclosure may be omitted from a prospectus prepared in accordance with the relevant forms.

Conforming changes are being made to NP 47 so that disclosure of option and SAR repricings, the composition of the compensation committee, the report of the compensation committee and the performance graph that must be included in an information circular or annual filing in lieu thereof prepared in accordance with the new rules need not be incorporated by reference into a short form prospectus even though Item 16 of NP 47 specifically requires that the information circular be incorporated by reference into a short form prospectus.

4. Public Float Calculation

The Notice which accompanied the publication of NP 47 in final form stated that "the Policy clarifies that the equity securities held by a pension fund, a mutual fund or a non-redeemable investment fund need not be excluded from the calculation of the market value of an issuer unless the portfolio manager is an affiliate of the issuer." This statement has been misinterpreted to mean that it is unnecessary to exclude equity securities held by a pension fund, a mutual fund or a non-redeemable investment fund from the calculation of the market value of an issuer if such a fund holds more than 10% of the equity securities of an issuer. Examples have been added to NP 47 in footnote (8a) to subsection 4.1(2)(a) in order to assist issuers and their advisers in the proper calculation of the market value of the issuer for purposes of NP 47. These examples make it clear that it is unnecessary to exclude equity securities of an issuer held by more than one pension fund, mutual fund or non-redeemable investment fund under common management of a single portfolio manager, or that are managed by a portfolio manager and an affiliate or associate of that portfolio manager, where the 10% threshold would not be exceeded but for the aggregation of the equity securities of the issuer held by such funds, provided that the portfolio managers are not affiliates of the issuer.

5. Waivers of the Eligibility Requirements to Access the POP System

The waiver procedure described in section 4.5 has proven to be somewhat cumbersome. In order to streamline the procedure, NP 47 is being amended so that each jurisdiction no longer has to provide its comments, by facsimile, directly to the applicant with a copy to all other jurisdictions.

6. Accelerated Review Procedure for Renewal AIFs being Reviewed

NP 47 provides an accelerated review procedure for renewal AIFs selected for review if an issuer files a preliminary short form prospectus after its AIF is selected for review or an issuer intends to file a preliminary short form prospectus during the time period within which it may be notified that its AIF has been selected for review. This accelerated review procedure is being extended to a Renewal AIF subject to review because a material take-over bid occurred during the issuer's last year.

The phrase "expedited review procedure" is being deleted and replaced with "accelerated review procedure".

7. General

The definition of "Applicable Regulator" for purposes of granting waivers from the requirements of NP 47 is being amended to reflect the current practice in British Columbia and Saskatchewan.

III. AMENDMENTS TO NP 45

A. Eligibility

In light of the proposed reduction to the reporting history eligibility requirement for the POP System, recent amendments to the U.S. short-form system, and the recent amendments to the U.S. MJDS, NP 45 is being amended to enlarge the group of issuers eligible to use the MJDS under NP 45.

The reporting history requirement will be reduced from 36 months to 12 months for debt and equity offerings. No change to the reporting history requirement for rights offerings or business combinations is being made.

The market capitalization requirements are also being removed. These requirements are applicable to debt or preferred shares convertible after one year with approved ratings, debt or preferred shares without approved ratings, and equity securities.

B. Ratings of offerings of debt and preferred shares

The SEC has adopted changes providing that, in determining eligibility of debt and preferred securities for its Form F-9 and 40-F, ratings by rating organizations recognized by the CSA as specified in NP 45 will be accepted. As a result, Section 8 of NP 45 which requires debt and preferred securities offered by a Canadian issuer using U.S. MJDS Form F-9 to receive a rating by CBRS and DBRS will not be renewed and is, therefore, being deleted, and the definition of "Approved Rating Organization" and "Approved Rating" in section 2(5) will include any rating organization recognized by the SEC as a nationally recognized statistical rating organization and their investment grade ratings.

C. Housekeeping Amendments

Subsection 3.8(4) of NP 45 will be changed to reflect more clearly the procedures set forth in National Policy Statement No. 1.

The SEC has adopted amendments to various rules to allow trust indentures of B.C. obligers an exemption from the U.S. Trust Indenture Act. As a result, Section 3.13 of NP 45 will be amended to include B.C. in the exemption from provincial requirements applicable to trust indentures.

DATED at Vancouver, British Columbia, on December 16, 1993.

Douglas M. Hyndman
Chair

Ref: NIN#93/4
NIN#93/13
NIN#93/14

AMENDMENTS TO NATIONAL POLICY STATEMENT NO. 47 ON THE PROMPT OFFERING QUALIFICATION SYSTEM AND AMENDMENTS TO NATIONAL POLICY STATEMENT NO. 45 ON THE MULTIJURISDICTIONAL DISCLOSURE SYSTEM

I. The following amendments are made to National Policy Statement No. 47, Prompt Offering Qualification System, ("NP 47") effective December 31, 1993:

1. Part 3 of NP 47 is amended by deleting the definition of "Associate" and replacing it with the following definition:

" "Associate" means, for the purposes of section 4.1(2)(a), where used to indicate a relationship with any Person,

(a) a partner, other than a limited partner, of that Person,

(b) a trust or estate in which that Person has a substantial beneficial interest or for which that Person serves as trustee or in a similar capacity,

(c) an issuer in respect of which that Person beneficially owns or controls, directly or indirectly, voting securities carrying more than 10% of the voting rights attached to all outstanding voting securities of the issuer,

(d) a relative of that Person who has the same home as that Person,

(e) any individual who has the same home as that Person and who is either married to that Person or is living with that Person as husband or wife, or

(f) any relative of the individual mentioned in paragraph (e) who has the same home as that Person, and

for all other purposes, "associate" as defined in the Securities Legislation of a Jurisdiction;"

2. Part 3 of NP 47 is amended by adding the definition of "Investee" as follows:

"Investee" means a company, partnership, joint venture or other arrangement in which the issuer holds an equity interest and that is not a subsidiary of, controlled by, or a temporary investment of, the issuer;"

3. Each reference in Subsection 4.1 of NP 47 to "36 calendar months" is deleted and replaced with a reference to "12 calendar months".

4. Clause 4.1(2)(a) of NP 47 is amended by adding a reference to footnote "(8a)" at the end of the said subclause before the semicolon and by adding the following footnote:

"(8a) The following examples are provided to assist issuers and their advisers in the calculation of the market value of the issuer.

Example (1): A portfolio manager manages a pension fund. The pension fund holds 11% of the Equity Securities of the issuer.

Result: These Equity Securities must be excluded in calculating the market value of the issuer's Equity Securities.

Example (2): A portfolio manager (not an affiliate of the issuer) manages three mutual funds each of which holds 3% of the Equity Securities of the issuer. An affiliate of the portfolio manager (not an affiliate of the issuer) manages two mutual funds each of which holds 3% of the Equity Securities of the issuer (15% in the aggregate).

Result: The aggregated Equity Securities do not have to be excluded in calculating the market value of the issuer's Equity Securities.

Example (3): Facts are the same as in Example (2) above except that, in this example, assume that the portfolio manager and the affiliate of the portfolio manager are affiliates of the issuer.

Result: The aggregated Equity Securities must be excluded in calculating the market value of the issuer's Equity Securities.

Example (4): A portfolio manager (not an affiliate of the issuer) manages three non-redeemable funds ("A, B and C"). A holds 12% of the Equity Securities of the issuer. B and C each hold 6% of the Equity Securities of the issuer.

Result: The Equity Securities of the issuer held by A must be excluded in calculating the market value of the issuer's Equity Securities but the Equity Securities held by B and C (12% in the aggregate) need not be excluded in calculating the market value of the issuer's Equity Securities."

5. Subsection 4.5(3) of NP 47 is deleted.

6. Subsections 4.5(4) and (5) of NP 47 are deleted and replaced with the following:

"(3) the Applicable Regulator of the Principal Jurisdiction may grant a waiver upon the terms and conditions that are deemed appropriate in the circumstances having regard for any comments raised by the other Jurisdictions; a document to that effect shall be issued by the Principal Jurisdiction and sent to the applicant with a copy to the Applicable Regulator in each of the other Jurisdictions where the application was filed; and

(4) each of the other Jurisdictions may grant a waiver upon the terms and conditions that it deems appropriate in the circumstances having the benefit of the decision of the Principal Jurisdiction."

7. Subsection 5.2(1) of NP 47 is amended by adding the following as the last sentence in that subsection:

"The Applicable Regulator of any Jurisdiction may delegate the authority to accept a Renewal AIF to a member of the staff of that Applicable Regulator."

8. Subsections 5.2(7) and (8) of NP 47 are amended by adding the following as the last sentence in each subsection:

"This procedure is also available for a renewal AIF filed under section 5.2(3)(b).

9. The reference in footnote 22 to subsection 5.2(8) of NP 47 to "expedited review procedure" is deleted and replaced with "accelerated review procedure".

10. Instruction 2 of Appendix A to NP 47 is deleted and replaced with the following:

"(2) The AIF shall be dated no earlier than the date of the auditor's report on the annual financial year covered by the AIF and all disclosures in, or incorporated by reference in, the AIF shall be no later than that date. The date of the AIF shall appear on the cover page of the document."

11. Instruction (5) of Appendix A to NP 47 is deleted and replaced with the following:

"(5) All references to the issuer in items 2 to 5 of this Appendix shall be to the issuer, its subsidiaries and Investees.

12. Subparagraphs (1)(a), (f), (m)(i), and (n) of Item 3 of Appendix A to NP 47 are deleted and replaced with the following:

"(a) with respect to principal products or services:

(i) a description of the principal products or services, the methods of distribution of these products or services, and their principal markets; and

(ii) for each of the last two completed financial years, the revenues for each category of principal products or services which accounts for 15% or more of total consolidated revenues for all segments for the applicable financial year, as dollar amounts or as percentages, derived from:

(A) sales to customers outside the consolidated entity, and

(B) sales or transfers to Investees

(see Schedule 1 to this Appendix for suggested format for presenting this segmented information);"

"(f) a description, including the importance, duration and effect on the segment, of identifiable intangible properties such as brand names, circulation, copyrights, franchises, licences, patents, software, subscription lists, and trademarks;"

"(m) for trust, mortgage loan and credit union (caisse d'épargne et de crédit) operations of the issuer's business:

(i) interest income separately, interest income for consumer, commercial, and residential mortgage loans as reported for the most recently completed financial year,"

"(n) with respect to the principal properties of the issuer including, but not limited to, manufacturing plants, warehouses, service and retail outlets, offices and investment properties:

(i) the location for each principal property except that where issuers have numerous locations, such as retailers, the information may be presented on a regional basis by reporting the total number and capacity of properties for each region,

(ii) the capacity in terms of floor space, output or other measures suitable for the respective
industry,

(iii) the general character including the purpose or principal use of properties and the state of the properties,

(iv) the segment using the property and

(v) how the property is held (e.g., owned freehold or otherwise, leased, or held subject to
any major encumbrances) including a brief description of any major encumbrances
against the property."

13. Subparagraph (1)(c) of Item 4 of Appendix A to NP 47 is deleted and replaced with the following:

"(c) net income or loss, in total and on a per share and fully diluted per share basis calculated in accordance with the CICA Handbook;"

14. The introduction to subparagraph (1) of Item 8 of Appendix A to NP 47 is deleted and replaced with the following:

"(1) Include a statement, or if the issuer is filing an annual report on Form 10-K or 20-F pursuant to section 5.4 of this Policy Statement then file an undertaking with the Applicable Regulator of the relevant Jurisdiction, to the effect that the issuer shall provide to any Person, upon request to the secretary of the issuer: "

15. Schedule 1 of Appendix A to NP 47 is deleted and replaced with the following:

"NATIONAL POLICY STATEMENT NO. 47 SCHEDULE 1 TO APPENDIX A INDUSTRY SEGMENTS

The table set forth below is illustrative of the format that might be used for presenting the segment information required by Item 3(1)(a) regarding industry segments and classes of similar products or services.

Revenue by Industry Segments and Classes of Products or Services

Year XXX2 XXX1
Third party Third part
customers Investees customers Investees

Industry segment A:

Class of product 1
Class of product 2
Segment subtotal

Industry segment B:

Class of product 1
Class of product 2
Segment subtotal
Other revenues

Totals by customer type

Sales from third party customers as above

Total consolidated revenues "

II. Paragraph (5) of Item 10 of Appendix B to NP 47 is amended by deleting the first paragraph and replacing it with:

"Where one or more ratings, including provisional ratings, have been received from one or more Approved Rating Organizations in respect of the securities to be distributed, whether as a result of a requirement of this Policy Statement or not, disclose the following information in each preliminary short form prospectus and short form prospectus, other than a preliminary short form prospectus filed in accordance with NPS 44:"

1. Subparagraph (1)(b) of Item 16 of Appendix B to NP 47 is deleted and replaced with the following:

"(b) material change reports (except confidential material change reports), comparative interim financial statements, comparative financial statements for the issuer's most recently completed financial year, together with the accompanying report of the auditor, and information circulars or annual filings where information circulars are not required (42a), filed by the Issuer pursuant to the requirements of the Securities Legislation of any Jurisdiction in which a distribution of securities is made pursuant to the short form prospectus, since the commencement of the issuer's financial year in which the issuer's Current AIF was filed."

2. Subparagraph (1)(b) of Item 16 of Appendix B to NP 47 is amended by adding the following footnote:

"(42a) In Ontario and British Columbia, an information circular or an annual filing where an information circular is not required must include a Statement of Executive Compensation in accordance with Form 40 under the regulations to the Securities Act (Ontario) or Form 41 specified by the Superintendent of Brokers in British Columbia. The items of disclosure in these forms which are required to be included in an information circular or an annual filing include, without limitation, Item V - Option and SAR Repricings, Item VIII - Compensation Committee, Item IX -Report on Executive Compensation and Item X -Performance Graph. The disclosure required by Items V, VIII, IX and X of these forms need not be incorporated by reference into the short form prospectus. Where similar changes are made to the executive compensation disclosure rules in other Jurisdictions, the disclosure required by the equivalent of Items V, VIII, IX and X of these forms need not be incorporated by reference into the short form prospectus."

3. Appendix C to NP 47 is amended by adding footnote "(46)" after "British Columbia", which appears in the column under the heading "Jurisdiction", and by adding the following footnote:

"(46) For purposes of applications pursuant to section 4.5 of this Policy Statement, the Applicable Regulator is the Deputy Superintendent, Exemptions and Orders."

4. Appendix C to NP 47 is amended by adding footnote "(47)" after "Saskatchewan", which appears in the column under the heading "Jurisdiction", and by adding the following footnote:

"(47) For purposes of applications pursuant to section 4.5 of this Policy Statement, the Applicable Regulator is the Saskatchewan Securities Commission."

III. The following amendments are made to National Policy Statement No. 45, Multijurisdictional Disclosure System, ("NP 45") effective December 31, 1993:

1. Subsection 2(4) of NP 45 is amended by adding the following as the last paragraph in that subsection:

"An Approved Rating for an Approved Rating Organization that is not listed above shall be a rating by such organization in one of its generic rating categories that signifies investment grade. Typically, the four highest rating categories (within which there may be subcategories or gradations indicating relative standing) signify investment grade by an Approved Rating Organization;"

2. Subsection 2(5) of NP 45 is deleted and replaced with the following:

"(5) "Approved Rating Organization" means each of C.B.R.S. Inc., Dominion Bond Rating Service Limited, Moody's Investors Service, Inc., Standard & Poor's Corporation and any entity recognized by the SEC as a nationally recognized statistical rating organization as that term is used in relation to Rule 15c3-1(c)(2)(vi)(F) under the 1934 Act;"

3. Subsection 2(24) of NP 45 is deleted and subsections 2(25) to 2(51) are renumbered as subsections 2(24) to 2(50).

4. Each reference to "NASDAQ" is deleted and replaced with "Nasdaq" and Subsection 2(29) of NP 45 is deleted and replaced with the following:

"(29) "Nasdaq" means The Nasdaq Stock Market."

5. Each reference to "NASDAQ NMS" is deleted and replaced with "NNM" and Subsection 2(30) of NP 45 is deleted and replaced with the following:

"(30) "NNM" means the Nasdaq National Market."

6. The fourth and fifth paragraphs of subsection 3.1 of NP 45 are deleted and replaced with the following:

"Non-convertible debt and preferred shares that have an Approved Rating are particularly appropriate for the MJDS because these securities trade primarily on the basis of their yield and an assessment of creditworthiness by an independent rating organization. The lack of a "substantiality" requirement for offerings of these securities reflects this and allows the MJDS to be used by issuers of securities having an Approved Rating, such as finance subsidiaries, that access that market frequently, but do not meet the public float requirements. Debt and preferred shares that have an Approved Rating and are not convertible into other securities for at least one year after issuance can be expected to trade primarily on the basis of their yield and independent rating, but are also priced to some extent on the basis of the anticipated value of the security into which they are convertible. Thus, the MJDS is available for these securities on the basis of their Approved Rating, coupled with a "substantiality" requirement.

In the case of offerings of common shares or other securities other than non-convertible debt and preferred shares that have an Approved Rating, the MJDS is available upon satisfaction of a "substantiality" requirement."

7. Subsection 3.2(3) of NP 45 is deleted and replaced with the following:

"(3) the issuer has filed with the SEC all the material required to be filed pursuant to sections 13, 14 and 15(d) of the 1934 Act for a period of 12 calendar months immediately preceding the filing of the preliminary prospectus with the principal jurisdiction;"

8. Paragraph 3.2(6)(b) of NP 45 is deleted and replaced with the following:

"(b) if convertible, may not be converted for at least one year after issuance, and the equity shares of the issuer of the securities into which the offered securities are convertible have a public float of not less than U.S. $75,000,000, determined as of a date that is within 60 days prior to the filing of the preliminary prospectus with the principal jurisdiction."

9. Subsection 3.3(2) of NP 45 is deleted and replaced with the following:

"(2) the equity shares of the issuer have a public float of not less than U.S.$75,000,00, determined as of a date that is within 60 days prior to the filing of the preliminary prospectus with the principal jurisdiction."

10. Subsection 3.4(2) of NP 45 is deleted and replaced with the following:

"(2) Issuer Eligibility Requirements

The MJDS may be used for the distribution by an issuer of rights to purchase additional securities of its own issue to its existing security holders in Canada, provided that the issuer:

(a) meets the eligibility requirements specified in Sections 3.2(1), (2), (4) and (5);

(b) the issuer has filed with the SEC all the material required to be filed pursuant to sections 13, 14 and 15(d) of the 1934 Act for a period of 36 calendar months immediately preceding the filing of the preliminary prospectus with the principal jurisdiction; and

(c) has had a class of its securities listed on the New York Stock Exchange or the American Stock Exchange or quoted on the NNM for a period of at least 12 calendar months immediately preceding the filing of the preliminary prospectus with the principal jurisdiction and is in compliance with the obligations arising from such listing or quotation."

11. The introductory sentence in Subsection 3.5 of NP 45 is deleted and replaced with the following:

"A successor issuer subsisting after a business combination shall be deemed to meet the respective eligibility requirements set forth in Sections 3.2(3), 3.4(2)(c), 4.4.(3) and 5.2(3) if:"

12. The last paragraph of subsection 3.8(4) of NP 45 is deleted and replaced with the following:

"Issuers filing a prospectus under the MJDS may elect to use the National Policy No. 1 Receipt System. Reference should be made to National Policy Statement No. 1 for the procedures, requirements and benefits of that system."

13. Section 3.13 of NP 45 is deleted and replaced with the following:

"3.13 Trust Indenture Requirements

Any requirement of a Canadian province or territory, applicable to trust indentures, in respect of any debt outstanding or guaranteed thereunder (including without limitation, any requirement that a person or company appointed as a trustee under a trust indenture be resident or authorized to do business in the province or territory) shall not apply to offerings made under the MJDS, provided that:

(1) the trust indenture under which the obligations are issued or guaranteed is subject to and complies with the Trust Indenture Act of 1939 of the United States; and

(2) at least one person or company appointed as trustee under a trust indenture

(i) is resident in such province or territory,

(ii) is authorized to do business in such province or territory, or

(iii) has filed with the applicable securities regulatory authority in such province or territory duly executed Submission to Jurisdiction and Appointment of Agent for Service of Process in the form set forth in Part C of Appendix "B"."

14. Subsection 4.4(2) of NP 45 is deleted and replaced with the following:

"(2) the offeror or, if the securities are of another issuer, such other issuer, meets the eligibility requirements set forth in Sections 3.2(1), 3.2(2), 3.2(4), 3.2(5) and 3.4(2)(b), except that the reference in Section 3.4(2)(b) to the filing of a preliminary prospectus with the principal jurisdiction shall be replaced by the filing of the registration statement with the SEC;"

15. Subsection 5.2(1) of NP 45 is deleted and replaced with the following:

"(1) each person or company participating in the business combination meets the eligibility requirements specified in Sections 3.2(1), 3.2(2), 3.2(4), 3.2(5), and 3.4(2)(b), provided that the eligibility requirements specified in Sections 3.2(2) and 3.4(2)(b) shall not be required to be met in respect of participating persons or companies whose assets and gross revenues in aggregate would contribute less than 20% of the total assets and gross revenues from continuing operations of the successor issuer, based on a pro forma combination of each participating person's and company's financial position and results of operations for its most recently completed fiscal year ended prior to the business combination for which financial statements have been filed;"

16. Section 8 of NP 45 is deleted.