NIN 96/31 - Proposed Amendments to Expedited Review of Short Form Prospectuses and Renewal AIFs [NIN - Rescinded]

Published Date:	1996-09-27
Effective Date:	1996-09-26

To expedite the review and receipt of short form prospectuses and the review and acceptance of renewal annual information forms ("Renewal AIFs") filed under the prompt offering qualification system (the "POP System") in more than one province or territory and to provide for continuing harmonizing of administration of securities legislation, the following securities regulatory authorities (the "Participating Jurisdictions") entered into a Memorandum of Understanding (the "Memorandum of Understanding") on November 15, 1994 setting out the procedures to be followed by an eligible issuer or selling security holder (the "Issuer") to obtain a preliminary and final receipt for a short form prospectus or acceptance of a Renewal AIF on an expedited basis ("Expedited Review"):

Alberta Securities Commission
British Columbia Securities Commission
Manitoba Securities Commission
Nova Scotia Securities Commission
Office of the Administrator of Securities, New Brunswick
Ontario Securities Commission
Registrar under the Prince Edward Island Securities Act
Registrar of Securities under the Securities Act, Northwest Territories
Registrar of Securities under the Yukon Territory Securities Act
Saskatchewan Securities Commission
Securities Division, Newfoundland

Expedited Review was designed to improve the efficiency of the Canadian capital markets by harmonizing the review process and by reducing regulatory costs for senior issuers. It represents a step towards increased harmonization and the elimination of duplication in the current securities regulatory system.

The Commission des valeurs mobilières du Québec ("the CVMQ") participated in the discussions relating to the Memorandum of Understanding and agreed with its basic purpose and intent. However, the CVMQ was not at the time of implementation in a position to become a Participating Jurisdiction under the Memorandum of Understanding. As a consequence of the CVMQ's non participation in the Expedited Review system, issuers distributing securities in each Canadian jurisdiction who elected Expedited Review had to also file the short form prospectus under National Policy Statement No. 1 ("NPS 1"). The CVMQ announced at the time that it would issue its second comment letter within the three day review period of the Expedited Review system so that issuers would benefit from the expedited time frames of the Expedited Review system.

However, even though issuers have been able to take advantage of the expedited time frames, the Canadian Securities Administrators ("CSA") believe that there may be greater efficiency gains for national issuers if the Expedited Review system includes all jurisdictions as participants. For example, with the CVMQ as a participant, preliminary materials and final materials will only be filed with the Designated Jurisdiction. Furthermore, the CVMQ will not issue a second comment letter as issuers will no longer be filing under NPS 1.

The CVMQ and Participating Jurisdictions have been examining over the past few months alternative procedures that would enable the CVMQ to become a Participating Jurisdiction. Certain changes are proposed to be made to the MOU which would result in the CVMQ becoming a signatory. Issuers would then deal with only one jurisdiction when filing a short form prospectus.

The major change to the MOU is the extension of the opting-out period until 12:00 p.m. (noon) (eastern time) on the day following the date of the comment letter. This is to respond to the CVMQ's need to see the comments of the Designated Jurisdiction. In arriving at this proposal the CSA considered certain statistics as well as the effect of the proposal on the present system.

The CSA have reviewed statistics compiled to determine the time frame between the filing of the preliminary short form prospectus and that of the final short form prospectus under the Expedited Review system. The CSA found that 2.5 % of the issuers filed on Day 4 (Day 1 being the date of filing of the preliminary short form prospectus), 15 % filed on Day 5, 38 % on Day 6 and 18 % on Day 7. Under the Expedited Review system, Day 5 is the earliest day that final material can be filed. Filings on Day 4 occur when a Designated Jurisdiction conducts its review in two days instead of the three days permitted under the system. Few issuers file on Day 5, probably because many issuers are not ready to file final materials within 4 days. Most file on Day 6.

As demonstrated in the table below, an issuer should continue to be able to file final materials on the same day as under the present system. The CSA wishes to emphasize that the opting-out provisions would be used only under limited circumstances. In fact, since the implementation of the MOU, no Participating Jurisdiction has opted out of Expedited Review for a particular short form prospectus.

	MOU	PROPOSAL
Day 1	issuer files preliminary prospectus	issuer files preliminary prospectus
Day 2	D.J. reviews; P.J. may opt out	D.J. reviews; P.J. may opt out
Day 3	D.J. reviews; P.J. may opt out	DJ. reviews; P.J. may opt out
Day 4	D.J. issues comment letter	D.J. issues comment letter; P.J. may opt out
Day 5	issuer may file final prospectus	P.J. may opt out until 12:00 p.m. (noon); issuer may file final prospectus
D.J. =	Designated Jurisdiction
P.J. =	Participating Jurisdiction

The MOU would also be amended to require the issuer to file the French version short form prospectus with the Designated Jurisdiction if the securities are to be distributed in Quebec. As a result, actual delivery of documents would be limited to one jurisdiction and the CVMQ will accept for filing a Facsimile of the French version short form prospectus at the time of filing of the preliminary and final prospectus. The CSA wishes to remind issuers that once SEDAR is implemented, filing procedures by Facsimile will be eliminated.

Upon analysis of the review procedures that are described in the MOU and in National Policy Statement No. 47 ("NPS 47") for Renewal AIFs, the CSA have concluded that it was not necessary to have two procedures for the review of Renewal AIFs. The procedure in the MOU is only a slight variation of the procedure in NPS 47, and in the context of the reformulation process, consideration is being given to include changes to NPS 47 to reflect an appropriate single expedited procedure for the review of Renewal AIFs. Accordingly, the CSA have decided to amend the MOU to stipulate that the procedure for the Renewal AIF will be described in NPS 47. In the meantime, the procedure for the review of Renewal AIFs is as provided in NPS 47 except that the Renewal AIF would only be subject to selective review by the Designated Jurisdiction.

The list of POP issuers set out in Schedule A has been updated to June 1, 1996. The Designated Jurisdiction of some issuers has been changed in anticipation of the CVMQ becoming a signatory to the MOU or as a result of a general review of Designated Jurisdictions by the CSA Corporate Finance Committee. If an issuer's Designated Jurisdiction has changed to Québec, the change will become effective when Québec becomes a signatory to the MOU. In the meantime, that issuer should regard its existing Designated Jurisdiction (generally Ontario) as its Designated Jurisdiction. If an issuer's Designated Jurisdiction has been changed to a jurisdiction other than Québec, the change is effective immediately.

Written comment on the amendments to Expedited Review are invited. In particular, comment is requested on the amendments to the opting-out period. The proposed amendments to the MOU are specifically indicated in the proposal accompanying this Request for Comment. Comments may be forwarded to the attention of:

CSA Corporate Finance Committee
c/o Jacques Labelle
Secrétaire général
Commission des valeurs mobilières du Québec
800 Square Victoria
C.P. 246, Tour de la Bourse
Montréal, Québec
H4Z 1G3
Tel.: (514) 873-5326

Comment letters should be submitted prior to November 8, 1996.

Comment letters submitted in response to this request will be placed in the public file in certain jurisdictions and form part of the public record unless confidentiality is requested. Comment letters will be circulated among the securities regulatory authorities for purposes of finalizing the amendments to Expedited Review whether or not confidentiality is requested. Accordingly, although comment letters for which confidentiality is requested will not be placed on the public file, freedom of information legislation may require the securities regulatory authorities in certain jurisdictions to make the comment letters available. Persons submitting comment letters should be aware that the press and members of the public may be able to obtain access to any comment letter.

For further information please contact any of the following:

Robert Garneau / Rosetta Gagliardi
Commission des valeurs mobilières du Québec
Tel.: (514) 873-5326

Susan Wolburgh Jenah
Ontario Securities Commission
Tel.: (416) 593-8245

Robert B. Bouchard
Manitoba Securities Commission
Tel.: (204) 945-2555

Ian MacIntosh
Saskatchewan Securities Commission
Tel.: (306) 787-5645

Kenneth Parker
Alberta Securities Commission
Tel.: (403) 427-2659

Louyse Gauvin
British Columbia Securities Commission
Tel.: (604) 660-4800

DATED at Vancouver, British Columbia, on September 26, 1996.

Douglas M. Hyndman
Chair


MEMORANDUM OF UNDERSTANDING FOR EXPEDITED REVIEW OF SHORT FORM PROSPECTUSES AND RENEWAL AIFS

1. PURPOSE

The Participating Jurisdictions recognize the ongoing need to improve the efficiency of the Canadian capital markets by speeding upharmonizing the prospectus review process and by reducing costs for senior issuers. The Participating Jurisdictions are especially cognizant of the timing difficulties encountered by issuers accessing public capital markets when required to deal with the various jurisdictions involved in securities regulation across Canada. In response, the Participating Jurisdictions have agreed to expedite the review and receipt of short form prospectuses and review and acceptance of Renewal AIFs filed under the prompt offering qualification system in more than one Canadian jurisdiction and have reached the following understanding with respect to the procedure to be followed by the Participating Jurisdictions. The Participating Jurisdictions believe that Expedited Review represents a step towards increased harmonization and the elimination of duplication in the current securities regulatory system.

2. INTERPRETATION

Terms with initial capitalscapitalized terms have the meaning assigned to them in NPS 47 unless defined below:

"Expedited Review CommitteeCSA Corporate Finance Committee" means the working committee established by the Participating JurisdictionsCanadian Securities Administrators to deal with corporate finance matters;

"Designated Jurisdiction" means the Securities Regulatory Authority or Applicable Regulator, as the context requires, of the province or territory assigned to each Issuer eligible to use the POP System as at October 1, 1994June 1, 1996 as set out in Schedule "A", as amended from time to time, or as communicated to the Issuer at the time of acceptance of its Initial AIF;

"Expedited Review" means the expedited review system and procedures provided for under this Memorandum of Understanding;

"Facsimile" means a facsimile or other form of electronic communication;

"Final Filing Materials" means:

"Issuer" means issuer or selling security holder, as the context requires;

"NPS 1" means National Policy Statement No. 1, as amended from time to timeor any successor instrument;

"NPS 47" means National Policy Statement No. 47, as amended from time to timeor any successor instrument;

"Non-Participating Jurisdiction"means a Securities Regulatory Authority or Applicable Regulator, as the context requires, of a province or territory that is not a Participating Jurisdiction;

"Participating Jurisdiction" means a Securities Regulatory Authority or Applicable Regulator, as the context requires, of a province or territory that has agreed to participate in Expedited Review;

"POP System" means the prompt offering qualification system for the distribution by an Issuer of securities of an Issuer by means of a short form prospectus as contemplated in NPS 47 or the Quebec Securities Act and Securities Regulation;

"Preliminary Materials" means the documents and fees that are required to be filed with the various provinces and territories with a preliminary short form prospectus as specified in the "Table of Documents to be filed in respect of the Clearance of National Issues" forming part of NPS 1;

"Undertaking" means the undertaking addressed to each of the Participating Jurisdictions other than the Designated Jurisdiction to file the Final Filing Materials within three working days following the date of the final expedited review receipt document.

3. RETENTION OF DISCRETION

Expedited Review involves no surrender of jurisdiction by any Participating Jurisdiction. Each of the Participating Jurisdictions retains the statutory discretion to review and receipt or refuse to issue a receipt for a particular short form prospectus.

4. SCOPE

This Memorandum of Understanding sets out the procedures agreed to by each of the Participating Jurisdictions governing the implementation and operation of Expedited Review.

At any time after the effective date of the Memorandum of Understanding, any Non-Participating Jurisdiction may become a Participating Jurisdiction by giving notice of its desire to participate in Expedited Review and executing a counterpart of the Memorandum of Understanding.

5. ELIGIBILITY

An Issuer will be eligible to elect Expedited Review for distributions of its securities (unless those securities are derivative securities2) in more than one Participating Jurisdiction under the POP System.

(b) Renewal AIFs filed in more than one Participating Jurisdiction under NPS 47.

6. CONSULTATION

Each of the Participating Jurisdictions may appoint one representative to the Expedited Review Committee. The Expedited Review CommitteeCSA Corporate Finance Committee will be responsible for ensuring consistency of review of filings and coordinating any changes or amendments to and otherwise monitoring Expedited Review.

7. DESIGNATED JURISDICTION

The Expedited Review CommitteeCSA Corporate Finance Committee will assign a Designated Jurisdiction to each Issuer eligible to participate in the POP System. All decisions of the Expedited Review CommitteeCSA Corporate Finance Committee will be based on its view of what is most administratively efficient and will be finaland, in particular, on factors such as jurisdiction of incorporation of the Issuer, location of its head office and the jurisdiction in which it carries its principal business. Each of the Securities Regulatory Authorities of Alberta, British Columbia, Manitoba, Nova Scotia, Ontario, Québec and Saskatchewan have agreed to act as Designated Jurisdictions. Designated Jurisdictions of Issuers eligible to participate in the POP System as at October 1, 1994June 1, 1996 are set out in Schedule "A".

Any Issuer becoming eligible to use the POP System after October 1, 1994June 1, 1996 will be assigned a Designated Jurisdiction by theExpedited Review Committee prior to acceptance of the Issuer's Initial AIF. The Designated Jurisdiction will notify the Issuer that it is the Issuer's Designated Jurisdiction at the time of acceptance of the Issuer's Initial AIF.

Schedule "A" will be amended and republished from time to time.

An Issuer electing Expedited Review is required to use the Designated Jurisdiction assigned to that Issuer. An Issuer filing a preliminary short form prospectus or short form prospectus with a Non-Participating Jurisdiction may, nonetheless, elect Expedited Review and file under NPS 1, provided it selects the Issuer's Designated Jurisdiction as its Principal Jurisdiction for the purposes of NPS 1.

8. EXPEDITED REVIEW PROCESS FOR SHORT FORM PROSPECTUSES

8.1 Applications for Relief

The Issuer is responsible for making applications for any exemptive relief which may be needed from any Participating Jurisdiction. In order to avoid delays, applications should be made prior to filing Preliminary Materials in the Designated Jurisdiction under Expedited Review. Where an application cannot be made prior to the filing of the Preliminary Materials, it must be made contemporaneously with the filing.

If relief has not been obtained within the time for opting out of Expedited Review, the issuance of a final expedited review receipt document may be delayed or the Participating Jurisdiction (in which the relief is required) may opt out for the particular filing.

8.2 Filing Procedures for Preliminary Materials

The Issuer must indicate in the covering letter filed with the preliminary short form prospectus that it is electing Expedited Review and identify the provinces and territories in which the preliminary short form prospectus is being filed.

The Issuer shall file the Preliminary Materials including, if the distribution is to be made in Quebec, the French version of the preliminary short form prospectus with the Designated Jurisdiction only. The Issuer shall also send as nearly as practicablecontemporaneously but in no event later than on the same day3 as with the Designated Jurisdiction, a Facsimile of the covering letter, preliminary short form prospectus including the French version to Quebec, and Undertaking to each of the other Participating Jurisdictions in which the Issuer proposes to distribute securities.

8.3 Preliminary Expedited Review Receipt Document

If the Preliminary Materials are acceptable, the Designated Jurisdiction will issue the preliminary expedited review receipt document. Immediately after its issuance, the Designated Jurisdiction will send, by Facsimile, the preliminary expedited review receipt document to each Participating Jurisdiction where the preliminary short form prospectus was filed.

The preliminary expedited review receipt document evidences that a preliminary receipt has been issued by each Participating Jurisdiction in which the preliminary short form prospectus was filed, including those that have opted out.

The preliminary expedited review receipt document will bear on its face the following legend:

Certain jurisdictions will support the statements in the preliminary expedited review receipt document by in fact issuing a local preliminary receipt. In those jurisdictions a filing under Expedited Review will be treated as a request to hold the local preliminary receipt on behalf of the Issuer unless the Issuer requests physical possession of the preliminary receipts from those jurisdictions.

8.4 Review

The Designated Jurisdiction is responsible for issuing comments to the Issuer arising out of its review. The comment letter will identify any Participating Jurisdictions that have opted out of Expedited Review. Comments will be issued within three working days following the date of filing of the preliminary short form prospectus unless, in the opinion of the Designated Jurisdiction, the proposed offering is too complex to be reviewed adequately within the three working days.4 In these circumstances, the Designated Jurisdiction will, by the end of the first working day following the date of the preliminary expedited review receipt document, notify the Issuer and the other Participating Jurisdictions by Facsimile that the time period will be extended to that applicable to prospectuses (other than short form prospectuses) and AIFs under NPS 1.

The Participating Jurisdictions acknowledge that a Participating Jurisdiction may adopt and implement a system of selective review of filings that would apply to preliminary short form prospectuses under Expedited Review. Any Participating Jurisdiction adopting a system of selective review will agree to notify the other Participating Jurisdictions if and when it adopts a system of selective review and will provide sufficient information to those Participating Jurisdictions for them to assess the scope of review under the system of selective review.

The Designated Jurisdiction will notify the Participating Jurisdictions at the time of filing of the preliminary short form prospectus if under its system of selective review the preliminary short form prospectus is not selected for review.

A Participating Jurisdiction will have two working daysuntil 12:00 p.m. (eastern time) on the day following the date ofday on which the preliminary expedited review receipt documentcomment letter is issued by Designated Jurisdiction to conduct such review as it considers appropriate to determine whether it wishes to opt out of Expedited Review for that particular filing (see section 8.6 - Opting Out Procedures). In most cases, this review of the preliminary short form prospectus will be restricted to identifying any specific concerns with the transaction, the related disclosure or any other special circumstances. Immediately after its issuance, the Designated Jurisdiction will send by Facsimile the comment letter to all Participating Jurisdictions for the purpose of determining the end of the opting-out period. Responses to comments should be in writing addressed to and will be resolved by the Designated Jurisdiction.

Unless a Participating Jurisdiction notifies, by Facsimile, the Designated Jurisdiction otherwise by 12:00 p.m. (eastern time) on the day following the day on which the Designated Jurisdiction issues its comment letter,withinthe two working days, it will, by its silence, have confirmed its participation in Expedited Review.

If the Designated Jurisdiction determines that it is not prepared to recommend that a final expedited review receipt document be issued for a particular short form prospectus, it will notify the Issuer and each of the Participating Jurisdictions that has not opted out of Expedited Review of its decision. At that point, the Issuer is obliged to co-ordinate the review process with each Participating Jurisdiction and Expedited Review is no longer applicable to this filing. Each of the Participating Jurisdictions will determine in accordance with its normal procedure whether or not to issue a final receipt for the short form prospectus.

8.5 Final Expedited Review Receipt Document

Designated Jurisdiction

The Designated Jurisdiction will issue the final expedited review receipt document if:
The issuance of the final expedited review receipt document by the Designated Jurisdiction will evidence that a final receipt has been issued by each Participating Jurisdiction in which the preliminary short form prospectus was filed other than those that have opted out of Expedited Review.

The final expedited review receipt document will bear on its face the following legend:

The Designated Jurisdiction will send, by Facsimile, the final expedited review receipt document immediately after its issuance to each Participating Jurisdiction in which the preliminary short form prospectus was filed other than those that have opted out of Expedited Review.

Certain jurisdictions will support the statements in the final expedited review receipt document by in fact issuing a local final receipt. In those jurisdictions a filing under Expedited Review will be treated as a request to hold the local final receipt on behalf of the Issuer unless the Issuer requests physical possession of the final receipts from those jurisdictions.

Participating Jurisdictions Other Than the Designated Jurisdiction

The Issuer, in accordance with its Undertaking, will file with the Participating Jurisdictions, other than the Designated Jurisdiction and those Participating Jurisdictions that have opted out of Expedited Review, the Final Filing Materials before the end of the third working day following the date of the final expedited review receipt document.

If the final expedited review receipt document is not issued in respect of a Participating Jurisdiction, the Undertaking is of no effect for that Participating Jurisdiction, except for fees. For greater certainty, Issuers will always be required to pay the relevant filing fees incurred in the Participating Jurisdictions in which the preliminary short form prospectus or short form prospectus was filed.

8.6 Opting Out Procedures

Each Participating Jurisdiction is entitled to opt out of Expedited Review for any particular preliminary short form prospectus. Any Participating Jurisdiction choosing to opt out of Expedited Review for a particular preliminary short form prospectus will notify the Issuer, the Designated Jurisdiction and all other Participating Jurisdictions, by Facsimile, before 12:00 p.m. (eastern time) on the daythe end ofthe second working day following the date ofday on which the preliminary expedited review receipt document.comment letter is issued by the Designated Jurisdiction.

If a Participating Jurisdiction opts out of Expedited Review for a particular preliminary short form prospectus, the procedures set out in NPS 1 apply regarding that particular preliminary short form prospectus in that jurisdiction.

Immediately upon receipt of notification from a Participating Jurisdiction that it has opted out of Expedited Review with respect to a particular preliminary short form prospectus filing, the Issuer shall file Preliminary Materials with that Participating Jurisdiction. Notwithstanding the time periods provided for short form prospectuses in NPS 1, if the Preliminary Materials are not filed expeditiously with the Participating Jurisdiction opting out, the time periods provided for under NPS 1 may not be met by the Participating Jurisdiction opting out of Expedited Review.

A Participating Jurisdiction that has opted out of Expedited Review for a particular filing may opt back in at any time prior to the issuance of the final expedited review receipt document by notifying the Designated Jurisdiction, the other Participating Jurisdictions and the Issuer, by Facsimile. It is the responsibility of that Participating Jurisdiction to ensure that the final expedited review receipt document has not been issued prior to its opting back into Expedited Review.

9. EXPEDITED REVIEW PROCESS FOR RENEWAL AIFS

Issuers filing a Renewal AIF in one or more Participating Jurisdictions shall be subject to expedited review procedures to be set out in the reformulated NPS 47. In the meantime, issuers shall be subject to the selective review procedures set out in NPS 47 except that a review may only be conducted by the Designated Jurisdiction.

The Designated Jurisdiction shall immediately accept for filing a Renewal AIF filed in accordance with NPS 47 and shall forward to the Issuer an expedited notice of acceptance document of its Renewal AIF. Immediately after issuance to the Issuer of the expedited notice of acceptance, the Designated Jurisdiction will send, by Facsimile, the expedited notice of acceptance document to each Participating Jurisdiction where the Renewal AIF has been filed.

The expedited notice of acceptance document will evidence that the Renewal AIF has been accepted for filing by each Participating Jurisdiction in which the Renewal AIF was filed.

The expedited notice of acceptance document will state the following:

10. IMPACT OF MEMORANDUM OF UNDERSTANDING

Where an Issuer has elected Expedited Review and follows the procedures set out herein for filing a preliminary short form prospectus and short form prospectus, the filing procedures for a preliminary short form prospectus and short form prospectus provided in section 6.3 of NPS 47 shall be subject to the filing procedures provided for under this Memorandum of Understanding.

The procedures for clearing short form prospectuses or Renewal AIFs under NPS 1 and NPS 47 used by any Non-Participating Jurisdiction will not be affected by Expedited Review.

Where a Non-Participating Jurisdiction is selected as Principal Jurisdiction by an Issuer, Expedited Review is not available and the procedures provided under NPS 47 will be followed.

11. CHRONOLOGY

Attached as Schedule "B" is a chronology which illustrates Expedited Review.

12. COUNTERPARTS

This Memorandum of Understanding may be executed in several counterparts, each of which so executed shall be deemed to be an original, and such counterparts together shall constitute one and the same instrument.

This Memorandum of Understanding supersedes a Memorandum of Understanding as at November 15, 1994 (signed by certain of the parties hereto) with regard to substantially the same matters and is effective as of this 15th day of November, 1994.

"William L. Hess"
William L. Hess, Q.C.
Chairman of the Board, Alberta Securities Commission

"Douglas M. Hyndman"
Douglas M. Hyndman, Chair
British Columbia Securities Commission

"Jocelyn Samson"
Jocelyn Samson, Chairman of the Commission
Manitoba Securities Commission

"George F. Kennedy"
George F. Kennedy,
Director of Securities, Department of Justice
Government of Newfoundland and Labrador

"Gary I. MacDougall"
Gary I. MacDougall, Registrar of Securities
Government of Northwest Territories

"Donne W. Smith Jr."
Donne W. Smith Jr., Administrator
Office of the Administrator of Securities, New Brunswick

"Robert B. MacLellan"
Robert B. MacLellan, Chairman
Nova Scotia Securities Commission

"Edward J. Waitzer"
Edward J. Waitzer, Chair
Ontario Securities Commission

"Edison Shea"
Edison Shea, Registrar of Securities, Department of Provincial Affairs, and Attorney General Prince Edward Island

Jean Martel
Jean Martel, Chairman
Commission des valeurs mobilières du Québec

"Marcel de la Gorgendiere"
Marcel de la Gorgendiere, Chairman
Saskatchewan Securities Commission

"M. Richard Roberts"
M. Richard Roberts, Government of Yukon

Notes:

1 Issuers are advised that they are required to file with Participating Jurisdictions only one copy of the documents filed in connection with a preliminary short form prospectus under NPS 1.

2 Derivative securities generally include securities the value of which, or the return from which, is based upon the market price, value or return of one or more underlying securities or commodities or upon the level of one or more financial benchmarks such as interest rates, foreign exchange rates or stock market indices. For the purposes of this Memorandum of Understanding, derivative securities do not include warrants or other securities exchangeable for, or convertible into, securities issued by the issuer or an affiliate of the issuer.

2 For example, if a POP issuer wishes to offer securities throughout Canada, it should file a preliminary short form prospectus under NPS 1, and may, provided it selects its Designated Jurisdiction as its Principal Jurisdiction for the purposes of NPS 1, elect Expedited Review. In this case, the Designated Jurisdiction will act as the Principal Jurisdiction under NPS 1 and the Designated Jurisdiction under Expedited Review.

On receipt of acceptable materials, the Designated Jurisdiction will issue a preliminary expedited review receipt document that will evidence the issuance of a preliminary receipt by each of the Participating Jurisdictions. Any Non-Participating Jurisdiction will issue a separate preliminary receipt document.

The Designated Jurisdiction will review the preliminary short form prospectus and issue comments to the issuer and any Non-Participating Jurisdiction within three working days following the receipt of the preliminary short form prospectus. Any Non-Participating Jurisdiction will send its comments, if any, to the issuer and the Designated Jurisdiction, as Principal Jurisdiction, on or before the end of the second working day following the date of receipt of the Designated Jurisdiction's comments. Prior to the issuance of comments from the Designated Jurisdiction, a Non-Participating Jurisdiction may, if it wishes, send its comments or notify the issuer and the Designated Jurisdiction that it has no comments on the preliminary short form prospectus. This practice would ensure that the Non-Participating Jurisdiction's comments, if any, are incorporated in the comment letter to be issued by the Designated Jurisdiction before the conclusion of the third working day following the filing of the preliminary short form prospectus.

Provided acceptable final materials have been received and comments from all Non-Participating Jurisdictions have been resolved, the Designated Jurisdiction will issue a final expedited review receipt document that will evidence the issuance of a final receipt by each Participating Jurisdiction that had not opted out of Expedited Review and, in its capacity as Principal Jurisdiction under NPS 1, will notify any Non-Participating Jurisdiction that it has done so. The Non-Participating Jurisdiction will then, if it considers it appropriate, issue a local final receipt.

Alternatively, an issuer wishing to offer securities throughout Canada can file its preliminary short form prospectus and supporting materials under NPS 1 and the review process will be conducted in the same manner as prior to the implementation of Expedited Review. If it does so, it may select any province that is prepared to act in such capacity as its Principal Jurisdiction for the purposes of NPS 1. The issuer may elect to receive a National Policy No. 1 Receipt that will have the same effect as prior to the implementation of Expedited Review.

3Certain Participating jurisdictions issue a local preliminary receipt. In order for those jurisdictions to issue their local preliminary receipt as of the same date as the preliminary Expedited Review receipt document, it is critical that the preliminary short form prospectus be filed as nearly as practicable contemporaneously with the filing in the Designated Jurisdiction but in no event later than on the same day in each Participating Jurisdiction.

4 Issuers are reminded that if they are concerned that a proposed offering may be too complex to be reviewed within three working days they should discuss the proposed offering with the Designated Jurisdiction on a pre-filing basis.

5The statement required to be in bold faced type on the outside front cover of an issuer's Renewal AIF during a review period may be added by way of stamp, sticker or other method that will ensure that the statement may not be deleted or removed from the issuer's Renewal AIF.

SCHEDULE "A"

NAME OF POP ISSUER	DESIGNATED JURISDICTION
AGF Management Limited	Ontario
AGRA Industries Limited	Ontario
AGT Limited	Alberta
AT Plastics Inc.	Ontario
AUR Resources Inc.	Ontario
Abacan Resource Corporation	Alberta
Abitibi-Price Inc.	Ontario
Acetex Corporation	Alberta
Acklands Limited	Ontario
Agnico-Eagle Mines Limited	Ontario
Agrium Inc. (formerly Cominco Fertilizers Ltd.)	Alberta
Air Canada	Quebec
Alberta Energy Company Ltd. (formerly Chieftain Development Co. Ltd.)	Alberta
Alcan Aluminum Limited	Quebec
Algoma Steel Inc.	Ontario
Alliance Communications Corporation	Ontario
Alliance Forest Products Inc.	Quebec
Anchor Lamina Inc.	Ontario
Anderson Exploration Ltd.	Alberta
Archer Resources Ltd.	Alberta
Astral Communications Inc.	Quebec
Atco Ltd.	Alberta
Athabasca Oil Sands Trust	Alberta
Ault Foods Limited	Ontario
Avco Financial Services Canada Limited	Ontario
Avenor Inc. (formerly Canadian Pacific Forest Products Limited)	Quebec
BC Gas Inc.	British Columbia
BC Gas Utility Ltd. (formerly BC Gas Inc.)	British Columbia
BC Sugar Refinery, Limited	British Columbia
BC Tel (formerly British Columbia Telephone Company)	British Columbia
BC Telecom Inc.	British Columbia
BCE Inc.	Quebec

BCE Mobile Communications Inc.	Quebec
BGR Precious Metals Inc.	Ontario
Ballard Power Systems Inc.	British Columbia
Ballistic Energy Corporation	Alberta
Banister Foundation Inc. (formerly Banister Inc.)	Ontario
Bank of Montreal	Quebec
Bank of Nova Scotia, The	Ontario
Barrick Gold Corporation (formerly American Barrick Resources Corporation)	Ontario
Barrington Petroleum Ltd.	Alberta
Beau Canada Exploration Ltd.	Alberta
Bell Canada	Quebec
Bema Gold Corporation	British Columbia
Beneficial Canada Inc.	Ontario
BloChem Pharma Inc.	Quebec
Biomira Inc.	Alberta
Blue Range Resource Corporation	Alberta
Bombardier Inc.	Quebec
Brascan Limited	Ontario
Brookfield Properties Corporation (formerly Carena Developments Limited)	Ontario
Bruncor Inc.	Ontario
C.I. Fund Management Inc.	Ontario
CAE Inc.	Ontario
CCL Industries Inc.	Ontario
CFCF Inc.	Quebec
CS Resources Limited	Alberta
CT Financial Services Inc.	Ontario
Cabre Exploration Ltd.	Alberta
Cause Central Desjardins	Quebec
Call-Net Enterprises Inc.	Ontario
Cambior Inc.	Quebec
Cambridge Shopping Centres Limited	Ontario
Cameco Corporation	Saskatchewan
Campbell Resources Inc.	Quebec
Canada Trustco Mortgage Company	Ontario
Canadian 88 Energy Corp.	Alberta
Canadian Airlines Corporation (formerly PWA Corporation)	Alberta
Canadian Fracmaster Ltd.	Alberta

Canadian Imperial Bank of Commerce	Ontario
Canadian National Railway Company	Quebec
Canadian Natural Resources Limited	Alberta
Canadian Occidental Petroleum Ltd.	Alberta
Canadian Pacific Enterprises Limited	Quebec
Canadian Pacific Limited	Quebec
Canadian Pacific Securities Limited	Ontario
Canadian Tire Corporation, Limited	Ontario
Canadian Utilities Limited	Alberta
Canadian Western Bank	Alberta
Canam Manac Group Inc., The	Quebec
Canfor Corporation	British Columbia
CanWest Global Communications Corp.	Manitoba
Cascades Inc.	Quebec
Cascades Paperboard International Inc.	Quebec
Centra Gas Ontario Inc.	Ontario
Central Fund of Canada Limited	Alberta
Champion Road Machinery Limited	Ontario
Chauvco Resources Ltd.	Alberta
Chieftain International Inc.	Alberta
Chrysler Credit Canada Ltd.	Ontario
Cimarron Petroleum Ltd.	Alberta
Cineplex Odeon Corporation	Quebec
Circo Craft Co. Inc.	Quebec
Co-Steel Inc.	Ontario
Cogeco Inc.	Quebec
Cominco Ltd.	British Columbia
Consumers Gas Company Ltd., The	Ontario
Cott Corporation	Quebec
Counsel Corporation	Ontario
Crestar Energy Inc.	Alberta
Dayton Mining Corporation	Ontario
Delrina Corporation	Ontario
Diamond Fields Resources Inc.	British Columbia
Discovery West Corp.	Ontario
Dofasco Inc.	Quebec
Doman Industries Limited	British Columbia
Dominion Textile Inc.	Quebec
Domtar Inc.	Quebec
Donohue Inc.	Quebec
Donohue Quno Inc. (formerly Quno Corporation)	Quebec

Dorset Exploration Ltd.	Alberta
Dreco Energy Services Ltd.	Alberta
Dundee Bancorp Inc.	Ontario
Eaton Credit Card Trust	Ontario
Echo Bay Mines Ltd.	Alberta
Edper Group Limited, The (formerly Pagurian Corporation, The)	Ontario
Eicon Technology Corporation	Quebec
Elan Energy Inc. (formerly Lasmo Canada Inc.)	Alberta
Empire Company Limited	Nova Scotia
Encal Energy Ltd.	Alberta
Enerplus Resources Fund	Ontario
Enserv Corporation	Alberta
Euro-Nevada Mining Corporation Limited	Ontario
Extendicare Inc. (formerly Crownx Inc.)	Ontario
Fairfax Financial Holdings Limited	Ontario
Falconbridge Limited	Ontario
Finning Ltd.	British Columbia
First Marathon Inc.	Ontario
Fletcher Challenge Canada Limited	British Columbia
(formerly British Columbia Forest Products Limited)
Ford Credit Canada Limited	Ontario
Fortis Inc.	Ontario
Four Seasons Hotels Inc.	Ontario
Franco-Nevada Mining Corporation Limited	Ontario
G.T.C. Transcontinental Group Ltd.	Quebec
Gaz Metropolitain Company, Limited Partnership	Quebec
Gaz Metropolitain Inc.	Quebec
General Motors Acceptance Company of Canada, Limited	Ontario
George Weston Limited	Ontario
Gibraltar Mines Limited	British Columbia
Glamis Gold Ltd.	British Columbia
Global Stone Corporation	Ontario
Goldcorp Inc.	Ontario
Golden Star Resources Ltd.	Ontario
Grad & Walker Energy Corporation	Alberta
Granges Inc.	British Columbia
Great Lakes Power Inc.	Ontario
Great-West Life Assurance Company, The	Manitoba
Great-West Lifeco Inc.	Manitoba
Groupe Videotron Ltée	Quebec

Gulf Canada Resources Limited (formerly Gulf Canada Limited & Gulf Canada Corporation)	Alberta
HCO Energy Ltd.	Alberta
Hammerson plc	Ontario
(formerly Hammerson Property Investment and
Development Corporation plc, The)
Harmac Pacific Inc.	British Columbia
Hees International Bancorp Inc. (formerly Hees International Corporation)	Ontario
Hemlo Gold Mines Inc.	Ontario
Hollinger Inc.	British Columbia
Horsham Corporation, The	Ontario
Household Financial Corporation Limited	Ontario
Hudsons Bay Company	Ontario
Hummingbird Communications Ltd.	Quebec
ID Biomedical Corporation	British Columbia
IPL Energy Inc. (formerly Interprovincial Pipe Line System Inc.)	Alberta
IPSCO Inc.	Saskatchewan
Imasco Limited	Quebec
Imperial Life Assurance Company of Canada, The	Ontario
Imperial Oil Limited	Ontario
Inco Limited	Ontario
Inmet Mining Corporation (formerly Metall Mining Corporation)	Ontario
Intensity Resources Ltd.	Alberta
International Colin Energy Corporation	Alberta
International Forest Products Limited	British Columbia
Interprovincial Pipe Line Inc.	Alberta
Intertape Polymer Group Inc.	Quebec
Intrawest Corporation	British Columbia
Investors Group Inc	Manitoba
Ivaco Inc.	Quebec
Jannock Limited	Ontario
Jordan Petroleum Ltd.	Alberta
Kinross Gold Corporation	Ontario
Laidlaw Inc. (formerly Laidlaw Transportation Limited)	Ontario
Laurentian Bank of Canada	Quebec
Linamar Corporation	Ontario
Loblaw Companies Limited	Ontario
Loewen Group Inc., The	British Columbia
London Insurance Group Inc., The	Ontario
MDC Corporation	Ontario
MDS Health Group Limited	Ontario
Mackenzie Financial Corporation	Ontario
MacMillan Bloedel Limited	British Columbia
Magna International Inc.	Ontario
Manufacturers Life Insurance Company, The	Ontario
Maple Leaf Foods Inc. (formerly Canada Packers Inc.)	Ontario
Maritime Tel & Tel Limited	Nova Scotia
Maritime Telegraph and Telephone Company, Limited	Nova Scotia
Mark Resources Inc.	Alberta
Markborough Properties Inc.	Ontario
Memotec Communications Inc.	Quebec
Merfin Hygienic Products Ltd.	British Columbia
Meridian Technologies Inc.	Ontario
Methanex Corporation	British Columbia
Metro-Richelieu Inc.	Quebec
Midland Walwyn Inc.	Ontario
Minera Rayrock Inc.	Ontario
Miramar Mining Corporation	British Columbia
Mitel Corporation	Ontario
Molson Companies Limited, The	Quebec
Montreal Trustco Inc.	Quebec
Moore Corporation Limited	Ontario
Morgan Hydrocarbons Inc.	Alberta
Morrison Petroleums Ltd.	Alberta
Mutual Life Assurance Company of Canada, The	Ontario

NOVA Corporation	Alberta
NOVA Gas Transmission Ltd.	Alberta
(formerly NOVA Corporation of Alberta)
National Bank of Canada	Quebec
National Trustco Inc.	Ontario
New Brunswick Telephone Company, Limited, The	Ontario
Newbridge Networks Corporation	Ontario
Newcourt Credit Group Inc.	Ontario
Newfoundland Light & Power Co. Limited	Quebec
Newfoundland Telephone Company Limited	Quebec
Newport Petroleum Corporation	Alberta
Newtel Enterprises Limited	Quebec
Noma Industries Limited	Ontario
Noranda Forest Inc.	Ontario
Noranda Inc. (formerly Noranda Mines Limited)	Ontario
Norcen Energy Resources Limited Alberta	Alberta
Northern Telecom Limited	Ontario
Northrock Resources Ltd.	Alberta
Northstar Energy Corporation	Alberta
Nova Scotia Power Inc.	Nova Scotia
Nowsco Well Services Ltd.	Alberta
Numac Energy Inc.	Alberta
Ocelot Energy Inc.	Alberta
Ondaatje Corporation, The	Ontario
Onex Corporation	Ontario
Oshawa Group Limited, The	Ontario
PC Docs Group International Inc.	Ontario
POCO Petroleums Ltd.	Alberta
Pacific Forest Products Limited	British Columbia
Pan American Silver Corp.	British Columbia
PanCanadian Petroleum Limited	Alberta
Pan East Petroleum Corp.	Alberta
Pegasus Gold Inc.	British Columbia
Pengrowth Energy Trust (formerly Pengrowth Gas Income Fund)	Alberta
Penn West Petroleum Ltd.	Alberta
Petro-Canada	Alberta
Petromet Resources Limited	Ontario
Philip Environmental Inc.	Ontario
Phoenix International Life Sciences Inc.	Quebec
Pinnacle Resources Ltd.	Alberta
Placer Dome Inc.	British Columbia
Plaintree Systems Inc.	Ontario
Potash Corporation of Saskatchewan Inc.	Saskatchewan
Power Corporation of Canada	Quebec
Power Financial Corporation	Quebec
Precision Drilling Corporation	Alberta
Premdor Inc.	Ontario
Prime Resources Group Inc.	British Columbia
Provigo Inc. (formerly Univa Inc.)	Quebec
Prudential Steel Ltd.	Alberta
QLT PhotoTherapeutics Inc. (formerly Quadra Logic Technologies Inc.)	British Columbia
Quebec Telephone	Quebec
Quebecor Inc.	Quebec
Quebecor Printing Inc.	Quebec
Ranchmens Resources Ltd.	Alberta
Ranger Oil Limited	Alberta
Rayrock Yellowknife Resources Inc.	Ontario
Real Fund	Ontario
Renaissance Energy Ltd.	Alberta
Repap Enterprises Inc.	Quebec
Revenue Properties Company Limited	Ontario
Rigel Energy Corporation (formerly Total Canada Oil & Gas Ltd.	Alberta
Rio Algom Limited	Ontario
Rio Alto Exploration Ltd.	Alberta
RioCan Real Estate Investment Trust	Ontario
Riverside Forest Products Limited	British Columbia
Rogers Cantel Mobile Communications Inc.	Quebec
Rogers Communications Inc.	Ontario
Rolland Inc.	Quebec
Royal Bank of Canada	Quebec
Royal Oak Mines Inc.	British Columbia
Royal Plastics Group Limited	Ontario

SNC-Lavalin Group Inc. (formerly SNC Group Inc., The)	Quebec
SR Telecom Inc.	Quebec
Sceptre Resources Limited	Alberta
Scotts Hospitality Inc.	Ontario
Seagram Company Ltd., The	Ontario
Sears Acceptance Company Inc.	Ontario
Sears Canada Inc.	Ontario
Semi-Tech Microelectronics Inc. (formerly International Semi-Tech Microelectronics Inc.)	Ontario
Shaw Communications Inc. (formerly Shaw Cablesystems Ltd.)	Alberta
Shell Canada Limited	Alberta
Slater Steel Inc. (formerly Slater Industries Inc.)	Ontario
Slocan Forest Products Ltd.	British Columbia
Southam Inc.	Ontario
Spar Aerospace Limited	Ontario
St. Laurent Paperboard Inc.	Quebec
St. Lawrence Cement Inc.	Quebec
Stampeder Exploration Ltd.	Alberta
Stelco Inc.	Ontario
Stone-Consolidated Corporation	Quebec
Summit Resources Limited	Alberta
Suncor Inc.	Alberta
TELUS Corporation	Alberta
TVX Gold Inc.	Ontario
Talisman Energy Inc. (formerly BP Canada Inc.)	Alberta
Tarragon Oil and Gas Limited	Alberta
Teck Corporation	British Columbia
Tee-Comm Electronics Inc.	Ontario
Telebec Ltée	Quebec
Teleglobe Inc. (formerly Memotec Data Inc.)	Quebec
Tembec Inc.	Quebec
Thomson Corporation, The	Ontario
Timberwest Forest Limited	British Columbia
Toronto-Dominion Bank, The	Ontario
Torstar Corporation	Ontario
Total Petroleum (North America) Ltd.	Ontario
Trans Quebec & Maritimes Pipelines Inc.	Quebec
TransAlta Corporation	Alberta
TransAlta Utilities Corporation	Alberta
TransCanada Pipelines Limited	Alberta
Tri Link Resources ltd.	Alberta
Trilon Financial Corporation	Ontario
Trimac Limited	Alberta
Trimark Financial Corporation	Ontario
Triton Mining Corporation	Ontario
Trizec Corporation Ltd.	Ontario
UAP Inc.	Quebec
Ulster Petroleums Ltd.	Alberta
Unican Security Systems Ltd.	Quebec
Union Gas Limited	Ontario
United Dominion Industries Limited (formerly AMCA International Limited)	Ontario
United Grain Growers Limited	Manitoba
Vengold Inc. (formerly Venzuelan Goldfields Ltd.)	Ontario
Viceroy Resource Corporation	British Columbia
Viridian Inc. (formerly Sherritt Inc.)	Alberta
WIC Western International Communications Ltd.	British Columbia
Wajax Limited	Ontario
Wascana Energy Inc. (formerly Saskatchewan Oil and Gas Corporation)	Saskatchewan
West Fraser Timber Co. Ltd.	British Columbia
Westburne Inc. (formerly United Westburne Inc.)	Quebec
Westcoast Energy Inc. (formerly Westcoast Transmission Company Limited)	British Columbia
Western Star Trucks Holdings Ltd.	British Columbia
Westmin Resources Limited	British Columbia
Wharf Resources Ltd.	Ontario
Xerox Canada Finance Inc.	Ontario
Xerox Canada Inc.	Ontario

SCHEDULE "B"

CHRONOLOGY

The following chronology illustrates the procedures for clearing a short form prospectus under Expedited Review:

Time Zone of Designated Jurisdiction:

Day 1

Preliminary Materials are filed in the Designated Jurisdiction and a Facsimile of the covering letter, preliminary short form prospectus and Undertaking (as defined below) is filed in each of the other Participating Jurisdictions in which the issuer proposes to distribute securities. Covering letter indicates election of Expedited Review and those provinces and territories in which the issuer proposes to distribute securities.

Issuer provides an undertaking to each Participating Jurisdiction other than the Designated Jurisdiction to file the Final Filing Materials before the end of the 3rdthird working day¹

1. For purposes of establishing that a working day has concluded, the time zone of the relevant jurisdiction will apply.

following the date of issuance of the final expedited review receipt document by the Designated Jurisdiction ("Undertaking"). If no final expedited review receipt document is issued in respect of a Participating Jurisdiction, the Undertaking is of no effect for that Participating Jurisdiction except with respect to fees.

The preliminary expedited review receipt document is issued by the Designated Jurisdiction.

The Designated Jurisdiction sends a Facsimile of the preliminary expedited review receipt document to each Participating Jurisdiction where the preliminary short form prospectus was filed.

Time Zone of most westerly Participating Jurisdiction in which the issuer has filed.

Day 2 and 3

Review. A Designated Jurisdiction that has adopted a selective review system will notify the other Participating Jurisdictions if the preliminary short form prospectus is not selected for review.

Day 4

The Designated Jurisdiction sends its comment letter sent by Facsimile to the issuer and all Participating Jurisdictionsby the Participating Jursidictions, including notation "Expedited Review filling" or equivalent.

Day 5

"Opting Out" Facsimile, if any, sent to Designated Jurisdiction, all other Participating Jurisdictions and the issuer before the end of the working day.12:00 p.m. (noon) (eastern time).

As part of its participation in Expedited Review, each Participating Jurisdiction has agreed that, unless the Designated Jurisdiction is advised otherwise within two working daysbefore 12:00 p.m. (eastern time) on the day following the date ofday on which the comment letter is issued,preliminary expedited review receipt document, silence will confirm to the Designated Jurisdiction the participation in Expedited Review by the Participating Jurisdiction.

Day X

Issuer files in the Designated Jurisdiction the documents and fees that are required to be filed in that province in connection with a short form prospectus as specified in the "Table of Documents to be filed in respect of the Clearance of National Issues" forming part of NPS 1. Issuer sends by Facsimile the short form prospectus to each of the Participating Jurisdictions.

The Designated Jurisdiction issues the final expedited review receipt document that evidences a final receipt has been issued by each Participating Jurisdiction in which the preliminary short form prospectus was filed other than those that have opted out of Expedited Review.

The Designated Jurisdiction notifies each Participating Jurisdiction other than those that have opted out, by Facsimile, that the final expedited review receipt document has been issued.

Distribution begins in the Designated Jurisdiction and each of the other Participating Jurisdictions.

Day X+3

Issuer files the Final Filing Materials (which include appropriate fees where required), in compliance with its Undertaking, in each Participating Jurisdiction other than the Designated Jurisdiction and those that have opted out of Expedited Review.

Day X+Y

Issuer completes distribution and pays the additional fee where required to do so.