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Securities Law

NIN 97/37 - Advance Notice - National Instrument 32-101 Small Securityholder Selling and Purchase Arrangements [NIN - Rescinded]

Published Date: 1997-08-29
Effective Date: 1997-08-27
Implementation of National Instrument

National Instrument 32-101 - Small Securityholder Selling and Purchase Arrangements is an initiative of the Canadian Securities Administrators ("CSA"). The Ontario Securities Commission has adopted the National Instrument as a rule and published it in the August 22, 1997 issue of the OSC Bulletin.

The Commission has not yet made National Instrument 32-101 as a rule. This Advance Notice is being published to provide notice that the Commission expects to make the rule before December 1, 1997, when the National Instrument will come into effect in British Columbia and Alberta. A similar notice is being published in the August 29, 1997 issue of the Alberta Securities Commission Summary. The National Instrument is expected to come into force at different times in other jurisdictions, as a rule in Ontario and Nova Scotia, as a Commission regulation in Saskatchewan and as a policy in each of the other jurisdictions represented by the CSA.

When made, the rule will be published in the Weekly Summary. The Commission anticipates publishing the rule in mid-November 1997, once it has received all necessary approvals.

On January 17, 1997, the Commission released for public comment an earlier draft of the National Instrument. No written comments were received during the comment period that expired on April 18, 1997.

Substance and Purpose of the National Instrument

The National Instrument will exempt an issuer and its agents from adviser and dealer registration requirements in Canadian securities legislation for certain activities relating to that permit holders of small amounts of securities of the issuer to sell those securities or to acquire additional securities in accordance with the policies of certain stock exchanges.

The exemption will be subject to the condition that neither the issuer nor its agent provide advice on participation by a securityholder in an arrangement, other than a description of the operation of the arrangement, procedures for participation in the arrangement, or both. This condition is consistent with the manner in which small securityholder selling and purchase arrangements are currently conducted.

In the National Instrument, the Canadian securities regulatory authorities recognize the policies of The Toronto Stock Exchange, The Montreal Exchange and The Alberta Stock Exchange, and provision is made for the Canadian securities regulatory authorities to designate other stock exchanges that have policies substantially similar to the policy of The Toronto Stock Exchange.

The National Instrument also expands current exemptions available in several jurisdictions by allowing any agent of the company, not only a transfer agent, to use the exemptions.

The National Instrument is derived from blanket orders and rulings issued by the Canadian securities regulatory authorities, including, in British Columbia, BOR#87/29 and BOR#87/30, both dated June 11, 1987. These blanket orders and rulings will be revoked effective the date the National Instrument comes into force.

The National Instrument will implement, in part, the recommendation of the CSA Task Force on Operational Efficiencies that Canadian securities regulatory authorities increase the co-ordination of regulation, including standardization of requirements.

DATED at Vancouver, British Columbia, on August 27, 1997.

Douglas M. Hyndman