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Securities Law

NIN 97/34 - Proposed Rescission of Uniform Act Policy No. 2-11: Applications to Omit Certain Financial Information [NIN - Rescinded]

Published Date: 1997-07-28
Effective Date: 1997-08-01

Proposed Rescission of Policy

The Canadian securities regulatory authorities in the provinces of British Columbia, Alberta, Saskatchewan, Manitoba and Ontario propose to rescind Uniform Act Policy No. 2-11: Policy Statement in Connection with Applications to the Commission for an Order Under Section 121(3) of the Securities Act, 1966 (Ontario) (now Section 79(a) [80(a)] of the new Act or Section 173(3) of the Business Corporations Act, 1970 (Ontario)) (the "Policy").

Reasons for the Proposed Rescission

The Policy was adopted in April 1971 and amended in November 1979. It states that an applicant that applies for an order permitting sales or gross operating revenue results to be omitted from the statement of profit and loss or the interim financial statement should make the application before the end of the fiscal period for which the statement is to be prepared, unless the applicant can show substantial reasons why the application was not made in that time period. The purpose of the Policy was to ensure the disposition of the application before the date that the issuer was required by the applicable legislation to file financial statements with the appropriate securities regulatory authority.

The Policy was originally designed to address a section of the Securities Act (Ontario) (now section 80(a) of that Act) that specifically allows applicants to apply for discretionary relief from including sales or gross operating revenue in financial statements, where such information would be unduly detrimental to the interests of a reporting issuer. There is no comparable provision under the Securities Act (British Columbia) (the "Act"), although issuers are entitled to apply for exemptive relief under section 91 of the Act from any continuous disclosure requirements of the Act or the Securities Rules. As well, sections 3(7) and (8) of the Securities Rules permit issuers to apply for relief from the requirement to prepare financial statements in accordance with generally accepted accounting principles.

There is no longer any reason to have the Policy. An application for an order that would allow a deviation from generally accepted accounting principles, like any other application for discretionary relief, would have to be filed in a timely fashion and provide sufficient grounds for relief for the Commission or the Executive Director to consider that granting the relief would not be prejudicial to the public interest. In British Columbia, Local Policy Statement 3-24: Statutory and Discretionary Exemptions should be consulted in connection with applications to be made to the Commission or Executive Director.


Interested parties are invited to make written submissions with respect to the proposed rescission. Submissions received by October 3, 1997 will be considered.

Submissions, in duplicate, should be addressed to all of the Canadian securities regulatory authorities listed below in care of the Ontario Securities Commission

British Columbia Securities Commission
Alberta Securities Commission
Saskatchewan Securities Commission
The Manitoba Securities Commission
Ontario Securities Commission

c/o Daniel P. Iggers, Secretary
Ontario Securities Commission
20 Queen Street West
Suite 800, Box 55
Toronto, Ontario M5H 3S8

A diskette containing the submissions (in DOS or Windows format, preferably WordPerfect) should also be submitted. As securities legislation in certain provinces requires that a summary of written comments received during the comment period be published, confidentiality of submissions received cannot be maintained.

Questions may be referred to any of the following:

Derek E. Patterson
British Columbia Securities Commission
(604) 775-0457

Chris Courtland
Alberta Securities Commission
(403) 297-4223

Daniel P. Iggers
Ontario Securities Commission
(416) 593-8212

DATED at Vancouver, British Columbia, on July 28, 1997

Douglas M. Hyndman