Skip Navigation
Securities Law

NIN 99/28 - Republication for Comment of Proposed National Instrument 44-101 and Related Documents Short Form Prospectus Distributions [NIN - Rescinded]

Published Date: 1999-07-23
Effective Date: 1999-07-22

The Commission, together with other members of the Canadian Securities Administrators ("CSA"), is republishing for comment the text of proposed National Instrument 44-101 (the "National Instrument"), proposed related Forms 44-101F1 and 44-101F2 (the "Forms") and proposed Companion Policy 44-101CP (the "Companion Policy") (collectively the "Second Publication Drafts"). While the Commission intends to adopt Implementing Rule 44-801 concurrently with the adoption of the proposed National Instrument, the Commission is not republishing the Implementing Rule for further comment as it has not changed in a material way. The proposed National Instrument, Forms, Companion Policy and Implementing Rule deal with the regulatory regime applicable to short form prospectus distributions, which was formerly called the Prompt Offering Qualification System or the "POP" System).

The proposed National Instrument, Forms and Companion Policy, which are initiatives of the CSA, are intended to replace National Policy Statement No. 47 ("NPS 47"). The proposed Implementing Rule will replace BOR#93/1. The proposed National Instrument is expected to be adopted as a rule in each of British Columbia, Alberta, Manitoba, Ontario and Nova Scotia, as a Commission regulation in Saskatchewan and as a policy in all other CSA jurisdictions, except Québec. The proposed Companion Policy is expected to be implemented as a policy in all CSA jurisdictions, except Québec.

The Commission des Valeurs Mobilières du Québec (the "CVMQ") agrees with the purpose and intent of the proposed National Instrument and will conduct a review to determine whether changes to Québec securities legislation are advisable in connection with implementation of the proposed National Instrument outside Québec.

Terms used in the proposed Companion Policy that are defined or interpreted in the proposed National Instrument or in a definition instrument in force in the jurisdiction and not otherwise defined in the proposed Companion Policy should be read in accordance with the proposed National Instrument, or the definition instrument, unless the context otherwise requires. The proposed National Instrument, Forms and Companion Policy contain footnotes that are not part of the proposed National Instrument, Forms or Companion Policy, which have been included to provide background and explanation.


In February 1998, the Commission published for comment, under NIN#98/11, proposed National Instrument 44-101 entitled "Prompt Offering Qualification System", Forms 44-101F1 and 44-101F2 and Companion Policy 44-101CP (collectively the "First Publication Drafts"). The comment period expired May 22, 1998.

The Second Publication Drafts, which are being republished for comment, incorporate changes from the First Publication Drafts. These changes reflect the CSA’s consideration of various factors, including:

  • public comments on the First Publication Drafts that were received from three commenters;
  • the proposal by the Ontario Securities Commission ("OSC") to reformulate general prospectus requirements under Ontario securities legislation in proposed OSC Rule 41-501, as well as comments that the OSC received on that proposal;
  • the anticipated adoption by CSA members of National Policy 43-201 to implement the mutual reliance review system ("MRRS") for the review of prospectuses and annual information forms (the "MRRS Prospectus Policy"), which the Commission published for comment in June 1998 under NIN#98/30.

Details of all comments received and specific changes to the Second Publication Drafts may be found in the OSC Notice relating to the National Instrument at the Ontario Securities Commission website at Significant changes to the First Publication Drafts include the following:

  • Adoption of a "sliding scale" approach to business acquisition disclosure so that the more significant an acquisition is to the issuer, the more historical information about the acquired business would be required:
Magnitude of AcquisitionPeriod for Which Statements are Required
Below 20%generally none required - not a "significant acquisition"
20% to 40%1 year of audited historical financial statements are required plus most recent interim financial statements
40% to 50%2 years of audited historical financial statements are required plus most recent interim financial statements
50% or more3 years of audited historical financial statements are required plus most recent interim financial statements
  • This approach is similar to the SEC approach to the disclosure of business acquisitions;

  • Revision to the eligibility criteria so that an issuer must not file a prospectus if it is in default in filing or delivering a document required under securities legislation rather than the issuer being ineligible to use the system if it is in default of any requirement in securities legislation;
  • Expansion of eligiblity for an offering of any non-convertible security with an approved rating rather than only non-convertible debt with an approved rating;
  • Revision to the treatment of a renewal AIF, which would become a "current AIF" on filing, and would be subject to regulatory review without a regulator issuing a notice of review within 10 days of filing, as is the current practice;
  • Provisions for the filing of all material contracts with a preliminary short form prospectus in all CSA jurisdictions, other than Ontario and Nova Scotia. Because regulatory discretion to keep filed documents confidential is more limited in Ontario and Nova Scotia than in other CSA jurisdictions, in those two jurisdictions certain supporting documents would be delivered rather than filed.


As a result of the imminent adoption of the MRRS Prospectus Policy, the Second Publication Drafts no long include procedures for filing in multiple jurisdictions. These will be dealt with in the MRRS Prospectus Policy for those filers that choose to use that policy. The proposed National Instrument retains certain procedures to govern situations where an issuer files a short form prospectus in only one jurisdiction.


Interested parties are invited to make written submissions with respect to the proposed National Instrument, Forms and Companion Policy. Submissions received by September 24, 1999 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 indicated below:

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

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

Submissions on the proposed Instrument 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 any submission (in DOS or Windows format, preferably WordPerfect) should also be submitted. As securities legislation in certain jurisdictions 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 any of:

Agnes Lau
Deputy Director, Capital Markets
Alberta Securities Commission
(780) 422-2191

Stephen Murison
Legal Counsel
Alberta Securities Commission
(403) 297-4233

Brenda Benham
Director, Policy and Legislation
British Columbia Securities Commission
(604) 899-6635
or (800) 373-6393 (in B.C.)

Joanne Peters
Senior Legal Counsel
Ontario Securities Commission
(416) 593-8134

Pierre Martin
Senior Legal Counsel
Commission des valeurs mobilières du Québec
(514) 940-2199 ext. 4557

DATED at Vancouver, British Columbia, on July 22, 1999.

Douglas M. Hyndman

Ref: NPS 47
NP 43-201
OSC Rule 44-501