NIN 98/55 - International Associates of the Vancouver Stock Exchange [NIN - Rescinded]

The Commission is publishing a blanket order, BOR#98/9, which provides an exemption from the underwriter registration requirement of the Securities Act for International Associates of the Vancouver Stock Exchange (the "VSE").

International Associate Program

VSE-listed companies operate on a worldwide scale and attract significant capital from non-Canadian investors, largely through foreign registered dealers. As part of its international marketing activities, the VSE has initiated a program under which foreign brokerage firms can participate more directly in the capital-raising process for companies listed on the VSE. Under this program, participating firms, known as "International Associates", will be permitted to receive some of the benefits available to registered underwriters on financings of VSE-listed companies. In particular, an International Associate that executes an underwriter’s certificate on a prospectus offering will be able to receive underwriter’s commissions and broker’s warrants. An International Associate will not be a member of the VSE or have VCT trading privileges. However, the VSE expects that the involvement of International Associates in raising capital in their own markets for VSE-listed issuers will lead to wider distribution of shareholdings and increased liquidity for the securities of those issuers.

In order to obtain International Associate status, a foreign brokerage firm must submit to a review by the VSE that is comparable to that conducted for a person applying for membership of the VSE. The VSE must notify the Commission of every firm that has been designated as an International Associate. Each International Associate will, among other things:

(a) be formed or incorporated under the laws of a jurisdiction outside Canada;

(b) not be registered under the Securities Act, not have clients in British Columbia and not maintain a business office or have any representatives in British Columbia or elsewhere in Canada, other than an office or representatives restricted to the activities required for the International Associate to execute an underwriter’s certificate;

(c) be a member in good standing of a foreign exchange or registered with a foreign securities commission or similar regulatory authority acceptable to the VSE; and

(d) attorn to the jurisdiction of the Commission and the VSE in connection with its activities as an International Associate.

The Blanket Order

BOR#98/9 provides that a person that has been designated by the VSE as an International Associate is exempt from the underwriter registration requirement in section 34(1)(b) of the Securities Act provided that, in respect of the distribution of securities under a preliminary or final prospectus, the International Associate does not solicit, accept subscriptions or engage in any other act or activity that would be a trade in British Columbia, except through a dealer registered under the Act or otherwise pursuant to exemptions from the registration requirements of the Act.

The blanket order does not grant any trading exemptions to International Associates. Accordingly, while an International Associate could sell shares on a prospectus financing to clients in its home jurisdiction, it would still be required to execute subsequent trades for its clients through a member of the VSE.

Questions relating to the blanket order may be referred to

Ross McLennan
Director, Registration
British Columbia Securities Commission
(604) 899-6685
Or 1-800-373-6393 (in B.C.)

Questions relating to the International Associate program should be referred to:

Donald A. Gordon
Director, Marketing
Vancouver Stock Exchange
(604) 643-6527

DATED at Vancouver, British Columbia, on September 3, 1998

Douglas M. Hyndman
Chair

Ref: BOR#98/9