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Securities Law

NIN 97/14 - Rescission of National Policy No. 33 Financing of Film Productions [NIN - Rescinded]

Published Date: 1997-04-11
Effective Date: 1997-04-11
Rescission of National Policy No. 33

The Commission, together with the other members of the Canadian Securities Administrators (the "CSA"), has rescinded National Policy Statement No. 33 ("NP 33") entitled "Financing of Film Productions", effective April 11, 1997.

Reasons for Rescission

NP 33 originally came into force on December 6, 1981 in response to perceived shortcomings in the public financing of certified feature film productions and certified short film productions that were intended to flow through to investors a capital cost allowance tax incentive available under the Income Tax Act (Canada). A revised NP 33 became effective January 1, 1991. The revised NP 33 reflected the experience of the CSA with respect to NP 33 and addressed changes in the securities legislation of various jurisdictions. The tax incentive has been eliminated for all film financings completed after December 31, 1995 (subject to limited extensions if principal photography was completed before March 1, 1996).

NP 33 was predicated primarily on the flow-through nature of the previous incentive. In light of the elimination of this aspect of the tax incentive and in light of the uncertainty of what structure film financings relying on the new incentive will take in the future, the CSA has decided that it is not appropriate to retain NP 33.

NP 33 also failed to address the specific characteristics of the film industry in British Columbia and was incompatible with film financing under the Small Business Venture Capital Act, S.B.C. 1985, c. 56. To accommodate the local industry, the Commission routinely waived certain sections of NP 33 where the proposed offering met other Commission requirements.

Given the rescission of NP 33, the Commission will consider future film offerings on a case by case basis and, based on that experience, determine whether any additional guidance is necessary.

DATED at Vancouver, British Columbia, on April 8, 1997.

Douglas M. Hyndman