NIN 95/55 - Exchange Offering Prospectuses Amendments to Local Policy Statement 3-02 [NIN - Rescinded]

Published Date:	1995-12-22
Effective Date:	1995-12-21

The Commission is publishing amendments to Local Policy Statement 3-02 - Prospectus Filing Requirements ("LPS 3-02"), together with two blanket orders (BOR#95/10 and BOR#95/11), to:

• set out the filing requirements applicable to exchange offering prospectuses ("EOPs"); and
  
• expand the use of the Summary Prospectus Disclosure System to make it available to issuers permitted to use Form
  12B - Information Required in Exchange Offering Prospectus of an Industrial Issuer, and Form 14B - Information Required in Exchange Offering Prospectus of a Natural Resource Issuer.

The Commission is also rescinding Local Policy Statement 3-26, dated February 1, 1987 ("LPS 3-26"). The amendments, BORs and rescission are effective January 1, 1996. This notice provides background to the amendments, BORs and the rescission.

Exchange Offering Prospectus Filing Requirements

As noted in NIN#95/40, the amendment repealing the statement of material facts ("SMF") exemption contained in section 58(1)(c) of the Securities Act is effective January 1, 1996. The EOP forms, Forms 12B and 14B, were specified under NIN#95/37 by the Superintendent as the form of prospectus for Qualifying Issuers intending to file a prospectus with the Commission and the Vancouver Stock Exchange (the "Exchange"). The EOP will replace the SMF as the disclosure form for Qualifying Issuers intending to file a prospectus with the Commission and the Exchange. The amendments to LPS 3-02 set out the filing requirements applicable to EOP filings.

A request for comment was issued under NIN#95/36 regarding the proposed amendments to LPS 3-02 to set out the filing requirements applicable to EOPs. A number of drafting changes were made to the amendments published for comments. In particular, the definition of "Qualifying Issuer" has been revised in response to comments received.

The reference to "Ineligible Inactive Issuer" in the definition has been deleted. Instead, the definition of "Qualifying Issuer" requires that, in addition to being a reporting issuer whose securities are listed on the Exchange, the issuer must satisfy one of the following requirements:

(a) the issuer's securities are listed on the senior board of the Exchange;

(b) the issuer allocates a significant portion of the proceeds raised under the EOP to fund a specific project, property or business undertaking; (c) the issuer has not raised, by way of prospectus, statement of material facts or rights offering during the previous 12 months, together with the proceeds to be raised under the EOP, more than $250,000; or (d) the issuer has received the Executive Director's approval to file an EOP.

Summary Prospectus Disclosure System

Part 11 of LPS 3-02 sets out the rules for the use of the Form 12A and Form 14A Summary Prospectus Disclosure System by issuers that are permitted to use Form 12A - Information Required in Prospectus of a Junior Industrial Issuer, and Form 14A - Information Required in Prospectus of a Natural Resource Issuer (see NIN#95/31). BOR#95/3 permits these issuers to use a Form 12A or Form 14A summary prospectus and base disclosure document prepared in accordance with Part 11 of LPS 3-02. In November of 1995, the Commission indicated that the Summary Prospectus Disclosure System would be made available to issuers permitted to use the EOP forms (Forms 12B and 14B) (see NIN#95/36). Accordingly, the amendments to Part 11 of LPS 3-02 expand the system to issuers that are permitted to use the EOP forms.

BOR#95/10 replaces BOR#95/3 (which is revoked by BOR#95/11). Under BOR#95/10, issuers permitted to file a prospectus on Form 12A, 12B, 14A or 14B are permitted to use a summary prospectus and base disclosure document, in accordance with the requirements set out in Part 11 (as amended) of LPS 3-02.

The Summary Prospectus Disclosure System consists of a summary prospectus and base disclosure document. The base disclosure document is incorporated by reference into and deemed to form part of the summary prospectus.

Rescission of Local Policy Statement 3-26

In conjunction with the amendment repealing the exemption contained in section 58(1)(c) of the Securities Act, the Commission is rescinding LPS 3-26. In addition, Form 24 lapses effective January 1, 1996. Notwithstanding the foregoing, both LPS 3-26 and Form 24 continue to apply to issuers relying on the transitional relief set out in BOR#95/8.

DATED at Vancouver, British Columbia, on December 21, 1995.

Douglas M. Hyndman
Chair

References: LPS 3-02
LPS 3-26
BOR#95/3
BOR#95/8
BOR#95/10
BOR#95/11
NIN#95/31
NIN#95/36
NIN#95/37
NIN#95/40
Form 12A
Form 12B
Form 14A
Form 14B
Form 24