Skip Navigation
Securities Law

NIN 98/45 - Proposed Rescission of Certain Uniform Act Policies [NIN - Rescinded]

Published Date: 1998-07-24
Effective Date: 1998-07-22
Proposed Rescissions

The Canadian securities regulatory authorities of the provinces of Alberta, British Columbia, Manitoba, Ontario, and Saskatchewan propose to rescind the following Uniform Act Policies:
  • Uniform Act Policy No. 2-01 - "Undertakings" -- Extra-Provincial Companies ("UAP 2-01")
  • Uniform Act Policy No. 2-02 - Prospectuses -- Annual Re-Filings ("UAP 2-02")
  • Uniform Act Policy 2-03 - Prospectuses and Amendments -- Certification Supporting Documentation ("UAP 2-03")
  • Uniform Act Policy 2-04 - Consent of Solicitors -- Disclosure of Interest ("UAP 2-04")
  • Uniform Act Policy No. 2-06 - Use of Shareholders' Lists by Registrants ("UAP 2-06")
  • Uniform Act Policy No. 2-08 - Declaration as to Short Position -- Listed and Unlisted Securities ("UAP 2-08")
  • Uniform Act Policy No. 2-09 - Insider Trading Reports -- Loan and Trust Companies ("UAP 2-09")

The Ontario Securities Commission previously (on May 2, 1997) published a notice with respect to the rescission of UAP 2-03 and UAP 2-04.

Reasons for Proposed Rescissions

1. UAP 2-01

UAP 2-01 was adopted in April, 1971 and amended in November, 1979. It states that the Director will refuse to issue a receipt for a prospectus until the issuer proposing to distribute the securities being qualified by the prospectus has delivered certain undertakings. The undertakings relate to specific sections of securities legislation regarding proxies and proxy solicitation, insider trading reports and financial disclosure.

The Canadian securities regulatory authorities in the provinces referred to above are proposing to rescind UAP 2-01 as, in their view, the subject matter of UAP 2-01 is obsolete. The provisions relating to undertakings have not been carried forward into the current versions of the securities legislation of the provinces referred to above. As well, the definition of "reporting issuer" (in those provinces that make use of that concept) includes many of the extra-jurisdictional corporations that had formerly filed undertakings.

2. UAP 2-02

UAP 2-02 was adopted in April, 1971. It was amended in June, 1971, effective September, 1971, and then amended again in November, 1979. UAP 2-02 deals with the lapse date of prospectuses, as well as steps that can be followed to minimize the possibility of a break in primary distribution.

The Canadian securities regulatory authorities in the provinces referred to above are proposing to rescind UAP 2-02 as, in their view, the subject matter of UAP 2-02 is generally covered in the following provisions of securities legislation of those provinces:

- section 97 of the Securities Act (Alberta)
- sections 70 and 71 of the Securities Act (British Columbia) (the "Act") and sections 121-124 of the Securities Rules (British Columbia)
- section 56 of The Securities Act (Manitoba)
- section 62 of the Securities Act (Ontario)
- section 71 of The Securities Act, 1988 (Saskatchewan)

3. UAP 2-03

UAP 2-03 was adopted in April, 1971 and amended in November, 1979. It states that the required supporting documents that accompany a prospectus must include a certified copy of the resolution authorizing the two signing Directors to sign a final prospectus on behalf of the Board of Directors.

To the extent that jurisdictions require the filing of this material, the requirements are contained in their legislation or policies (in British Columbia, in Local Policy Statement 3-02), therefore this policy is not required.

4. UAP 2-04

UAP 2-04 was adopted in April, 1971 and amended in November, 1979. It concerns the disclosure of interest by the lawyers acting on an underwriting. UAP 2-04 states that where the disclosure is the name of the lawyer upon whose advice the underwriter and/or company are relying, the written consent of the solicitor and the disclosure of interest required by securities legislation is not required. It also states that where the prospectus refers to a lawyer's "legal for life" opinion, the opinion is clearly prepared for the purpose of inclusion in the prospectus, so that securities legislation would require consent and disclosure of interest.

It is proposed that UAP 2-04 be rescinded since the consent and disclosure of interest provisions of securities legislation are already clear and existing practice is established enough that additional guidance in the form of a policy is not required.

5. UAP 2-06

UAP 2-06 was adopted in April, 1971. It states that certain corporate legislation restricts the use of a list of all or any shareholders of a corporation to purposes connected with that corporation. UAP 2-06 also states that the buying, selling, or otherwise trafficking in such a list is an offence punishable on summary conviction.

At the time UAP 2-06 was adopted, federal corporations legislation did not contain similar provisions. Accordingly, the purpose of UAP 2-06 is to give notice to all registrants that the Commissions consider use by a registrant of all or part of a list of shareholders of any corporation in the manner outlined above to be conduct contrary to the public interest, affecting fitness for continued registration.

The Canadian securities regulatory authorities in the provinces referred to above are proposing to rescind UAP 2-06 as, in their view, the conduct described in the Policy is now generally an offence under most Canadian corporate legislation (in British Columbia, under section 168 of the Company Act (British Columbia)), and is also prohibited by proposed National Instrument 54-101 with relation to non-registered holders of securities.

6. UAP 2-08

UAP 2-08 was adopted in April, 1971 and amended in November, 1979. It reminds registrants and the public of the securities legislation provisions that require a declaration from a person that places an order for the sale of a security through an agent that is a registrant, if at the time of placing the order the person does not own the security, or if acting as agent the person knows that his, her, or its principal does not own the security. The required declaration must state that the person or principal does not own the security. UAP 2-08 states that the declaration must be made at the time the order to sell is given, regardless of whether the securities are listed or unlisted. It also states that if a client does not declare a "short sale", failure by the client to deliver the securities within the normal time for delivery, without reasonable explanation, is prima facie an indication of a violation of securities legislation, punishable on summary conviction, and should be reported by the registrant forthwith to the appropriate Canadian securities regulatory authority. Finally, UAP 2-08 states that registrants are requested to record and maintain for inspection a list of declared short sales of securities, both listed and unlisted.

The Canadian securities regulatory authorities in the provinces referred to above are proposing to rescind UAP 2-08 as, in their view, the majority of the provisions in UAP 2-08 are now set out in the securities legislation of those provinces (in British Columbia, in section 56 of the Act).

7. UAP 2-09

UAP 2-09 was adopted in April, 1971 and amended in November, 1979. It provides notice to insiders of loan and trust companies that guaranteed deposit receipts or certificates of trust companies and deposit or savings accounts that are evidenced by a pass book are not considered by the Canadian securities regulatory authorities of those provinces referred to above to be capital securities for the purposes of insider trading reports.

The Canadian securities regulatory authorities in the provinces referred to above are proposing to rescind UAP 2-09 as, in their view, it is obsolete. In almost all cases, the definition of "security" currently contained in securities legislation excludes evidence of deposits issued by a registered loan corporation or trust corporation.


Interested parties are invited to make written submissions with respect to the proposed rescissions. Submissions received by September 22, 1998 will be considered.

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

British Columbia Securities Commission
Alberta Securities Commission
Saskatchewan Securities Commission
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 cannot be maintained.

DATED at Vancouver, British Columbia, on July 22, 1998

Douglas M. Hyndman

REF: UAP 2-01
UAP 2-02
UAP 2-03
UAP 2-04
UAP 2-06
UAP 2-08
UAP 2-09