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Securities Law

NIN 99/52 - National Policy 47-201 Trading Securities Using the Internet and Other Electronic Means [NIN - Rescinded]

Published Date: 1999-12-17
Effective Date: 1999-12-15

The Commission has adopted and, together with the other members of the Canadian Securities Administrators (the "CSA"), is publishing National Policy 47-201 Trading Securities Using the Internet and Other Electronic Means ("NP 47-201").

NP 47-201 is an initiative of the CSA, and is being published concurrently with National Policy 11-201 Delivery of Documents by Electronic Means. Both policies come into effect on January 1, 2000.

NP 47-201 replaces the Commission Notice dated March 3, 1997 entitled "Trading Securities and Providing Advice Respecting Securities on the Internet"1.

1 NIN#97/9


On December 31, 1998, the CSA published for comment proposed NP 47-2012

2 NIN#98/72

and National Policy 11-2013.

3 NIN#98/71

During the comment period, which expired on February 17, 1999, the CSA received a number of submissions. After reviewing the comment letters received in connection with the request for comments, the CSA made a number of minor changes to NP 47-201. These changes were not material and, as a result, the CSA are not republishing NP 47-201 for comment.

A summary of the comments received, and the response of the CSA to those comments, may be found as an Appendix to the Ontario Securities Commission Notice relating to NP 47-201 on their website at

Purpose of NP 47-201

The CSA recognize that technology is an important tool for market participants, and that the regulatory structure should facilitate developments that encourage innovation. At the same time, however, innovation should not be supported by compromising investor protection or investor confidence in the integrity of the markets.

The purpose of NP 47-201 is to set out the views of the CSA on a number of issues relating to the use of the Internet and other electronic means of communication in connection with trades and distributions of securities.

Summary of NP 47-201

NP 47-201 reminds market participants that, given the inter-jurisdictional nature of the Internet, they must be mindful of the securities laws of all Canadian and foreign jurisdictions when posting material on the Internet.

NP 47-201 sets out the CSA’s view that an offering document posted on the Internet that offers or solicits trades of securities and is accessible by residents of a jurisdiction will generally constitute a trade or offering of securities in that jurisdiction.

However, the CSA will not consider the posting of an offering document on the Internet to be a trade or, if applicable, a distribution in a local jurisdiction if

  • the offering document clearly identifies the jurisdictions in which the offering or solicitation is qualified to be made
  • the offering or solicitation is not directed at residents of the local jurisdiction
  • reasonable precautions are taken not to trade or distribute securities to residents of the local jurisdiction.

NP 47-201 reminds market participants of the registration requirements of Canadian securities legislation (i.e., even if the prospectus requirements are met, securities must be sold through a person registered to trade) and of the views of certain CSA members, including the Commission, concerning distributions made from their jurisdictions.

NP 47-201 also sets out the CSA’s views on compliance with other requirements under securities legislation, such as the requirement to maintain distribution lists and the rules regarding the electronic distribution of information during the "waiting period". Guidelines concerning Internet roadshows are also included.

Further Information

Inquiries concerning specific registration or prospectus requirements in British Columbia, or applicable exemptions from such requirements, should be directed to the Registration Division, Corporate Finance Division or Exemptions and Orders Division respectively (phone no. (604) 899-6500 or (800) 373-6393 (in B.C.)).

DATED at Vancouver, British Columbia, on December 15, 1999.

Douglas M. Hyndman

Ref: NP 11-201

This NIN refers to other documents. These documents can be found at the B.C. Securities Commission public website atwww.bcsc.bc.cain the Policy Documents Database.