Skip Navigation
Securities Law

NIN 98/57 - Proposed Rescission of Certain National Policy Statements [NIN - Rescinded]

Published Date: 1998-09-11
Effective Date: 1998-09-10
Proposed Rescissions

The Canadian securities regulatory authorities propose to rescind the following National Policy Statements:
  • National Policy Statement No. 4 - Conditions for Dealer Sub-Underwritings ("NP 4")
  • National Policy No. 16 - Maintenance of Provincial Trading Records ("NP 16")
  • National Policy Statement No. 20 - Trading in Unqualified Securities - Securities in Primary Distribution in Other Jurisdictions ("NP 20")

Reasons for Proposed Rescissions

1. NP 4

NP 4 came into force in April, 1971. It concerns situations where the plan of distribution contained in a prospectus discloses that an underwriter may sell securities to a dealer as principal. NP 4 provides that the dealer, in turn, may distribute the securities, if: (i) the dealer acquires the securities for its own account as principal and distributes the securities to the public as principal in accordance with the "plan of distribution", (ii) the offering price to the public does not exceed the price contained in the prospectus, and (iii) the dealer files notice with the relevant securities regulatory authorities of its intention to engage in primary distribution to the public as principal. The purpose of NP 4 is to ensure investor protection for dealer sub-underwritings.

The Canadian securities regulatory authorities consider that NP 4 is no longer necessary, given the manner in which distributions take place and given securities legislation and the rules of the stock exchanges and the Investment Dealers Association of Canada.

2. NP 16

NP 16 came into force in April, 1971. The purpose of NP 16 is to ensure that complete details concerning trades in a specific province are readily available to the Canadian securities regulatory authority in that province and its staff. NP 16 provides that it is a condition attaching to all registrations that there be maintained in that province, and available for examination by the relevant Canadian securities regulatory authority, the ledgers, books of account, correspondence and other documents and records that are necessary to provide complete details of each transaction from or within that province. This requirement does not apply to salespeople and underwriters whose head office records are maintained in another province.

The securities legislation in each province now contains the same books and records requirements as are contained in NP 16. In British Columbia, this requirement is set out in section 27 of the Securities Rules. In light of this duplication of provisions, the Canadian securities regulatory authorities have decided that it is not necessary to retain NP 16.

3. NP 20

NP 20 also came into force in April, 1971. The purpose of NP 20 is to provide a warning to registrants of their obligation to ensure that when executing orders on behalf of residents of the jurisdiction in which they are registered, the securities being purchased are qualified for sale in that jurisdiction.

The Canadian securities regulatory authorities believe that market participants are aware of the obligation not to trade in securities that are the subject of a distribution if those securities have not been qualified in the jurisdiction. In addition, some of the statements in NP 20 are either out of date or incorrect. The Canadian securities regulatory authorities are, therefore, proposing to rescind NP 20.


Interested parties are invited to make written submissions with respect to the proposed rescissions. Submissions received by December 11, 1998 will be considered.

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

British Columbia Securities Commission
Alberta Securities Commission
Saskatchewan Securities Commission
The Manitoba Securities Commission
Ontario Securities Commission
Office of the Administrator, Government of New Brunswick
Prince Edward Island Securities Commission
Nova Scotia Securities Commission
Department of Government Services and Lands, Newfoundland and Labrador
Registrar of Securities, Northwest Territories
Registrar of Securities, Government of the Yukon Territory

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

Submissions should also be addressed to the Commission des valeurs mobilières du Québec as follows:

Claude St Pierre, Secretary
Commission des valeurs mobilières du Québec
800 Victoria Square
Stock Exchange Tower
P.O. Box 246, 17th Floor
Montréal, Québec H4Z 1G3

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.

Questions may be referred to:

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

DATED at Vancouver, British Columbia, on September 10, 1998

Douglas M. Hyndman