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Securities Law

NIN 99/19 - Rescission of Local Policy Statements 3-01, 3-03, 3-21, 3-25, 3-31 and 3-41 [NIN - Rescinded]

Published Date: 1999-06-25
Effective Date: 1999-06-24
Effective immediately, the Commission is rescinding Local Policy Statements 3-01, 3-03, 3-21, 3-25, 3-31 and 3-41. The matters addressed by these Local Policy Statements are either outdated or better addressed in other, more modern, regulatory instruments, whether those of the Commission, the Vancouver Stock Exchange (the "VSE") or the Law Society of British Columbia (the "Law Society").

In the interest of updating and simplifying regulatory standards, the Commission is rescinding the following Local Policy Statements:
  • Local Policy Statement 3-01 - "Factors to be Considered in Arriving at a Decision that a Natural Resource Property Has Sufficient Merit to Justify an Expenditure Thereon of Risk Capital Derived From Public Subscription" ("LPS 3-01")
  • Local Policy Statement 3-03 - "Requirements re Filing of Preliminary Prospectuses and Prospectuses (National Issues)" ("LPS 3-03")
  • Local Policy Statement 3-21 - "Share and Unit Offering of Unlisted Issuers and Options and Warrants Available to Registrants Participating in Such Offerings" ("LPS 3-21")
  • Local Policy Statement 3-25 - "Natural Resource Issuer - ‘Best Efforts’ Prospectus and Amendments to Prospectus Arising from Market Conditions" ("LPS 3-25")
  • Local Policy Statement 3-31 - "Incentive Options to Directors and Employees - Unlisted Issuers" ("LPS 3-31")
  • Local Policy Statement 3-41 - "Lawyer’s Conflicts of Interest" ("LPS 3-41").
LPS 3-01 sets out a test to determine if natural resource properties have sufficient "merit", before an issuer "goes public" to finance those properties. The Commission feels that a determination of the merit of a natural resource property before going public is more appropriately dealt with by the minimum listing requirements of the VSE and other exchanges.

LPS 3-03 describes those documents that a national issuer files with a preliminary prospectus and prospectus. The list of required documents in LPS 3-03 is no longer appropriate. The current list of documents required to be filed for a national issuer is attached as Appendix A to proposed National Policy 43-201 ("NP 43-201"). Although the Commission has not yet adopted NP 43-201, a national issuer should use the list of documents in Appendix A of NP 43-201. Once NP 43-201 is adopted, national filers should use the list of documents attached to the finalized version of NP 43-201, whether or not they are filing under the mutual reliance review system discussed in NP 43-201.

LPS 3-21 deals with minimum price and other terms of share and unit offerings of unlisted issuers. It was primarily intended to deal with "pre-public" offerings or initial public offerings by issuers that were ultimately expected to list on the VSE. The Commission feels that the subject matter of LPS 3-21 is more appropriately dealt with through the listings policies of the exchanges.

LPS 3-25 deals with amendments to a "best efforts" prospectus. Issuers should refer to LPS 3-02 for guidance with respect to amendments to a preliminary or final prospectus.

LPS 3-31 deals with incentive options to directors and employees of unlisted issuers. LPS 3-31 was introduced prior to the VSE’s rules and policies dealing with conditional listings. It was primarily intended to deal with "pre-public" offerings or initial public offerings by issuers that were ultimately expected to list on the VSE. Current VSE policies and the policies of other exchanges provide a more modern regime for dealing with incentive stock options. LPS 3-31 also sets out percentage limitations that are no longer appropriate.

LPS 3-41 imposes requirements relating to disclosure of conflicts of interest involving lawyers acting for issuers in dealing with the Commission. Since LPS 3-41 was adopted, the Law Society of British Columbia has developed newer and more up-to-date rules dealing with conflicts of interest. In addition, section 107 of the Securities Rules already deals with disclosure of a lawyer’s interest where the lawyer is named in a prospectus as having prepared or certified any part of it.

DATED at Vancouver, British Columbia, on June 24, 1999. \

Douglas M. Hyndman

Ref: LPS 3-01
LPS 3-02
LPS 3-03
LPS 3-21
LPS 3-25
LPS 3-31
LPS 3-41
Proposed NP 43-201
Section 107, Securities Rules