44-103CP - Post-Receipt Pricing [Proposed CP - Lapsed
| Published Date: | 1998-10-02 |
|---|
Companion Policy To National Instrument 44-103 - Post-Receipt Pricing
PART 1 IMPLEMENTATION OF THE INSTRUMENT
1.1 Implementation of the Instrument - Certain jurisdictions have implemented National Instrument 44-103 Post-Receipt Pricing (the "Instrument") by one or more instruments forming part of Canadian securities legislation or Canadian securities directions in the jurisdiction. As a result, the provisions of the Instrument apply in those jurisdictions to the extent provided by, and except as modified by, the implementing law of the jurisdiction.
1.2 Post-Receipt Pricing in Quebec - The Commission des valeurs mobilières du Québec agrees with the purpose and intent of the Instrument and this Policy, but has not adopted the Instrument or this Policy, as its securities legislation currently provides for accessibility to a post-receipt pricing procedure for certain securities. Issuers are reminded to refer specifically to the Quebec securities legislation when considering a distribution of securities in the Province of Quebec and concurrently in other jurisdictions under the Instrument.
1.3 Relationship of the Instrument to Canadian Securities Legislation
(1) Issuers are reminded that the rules and procedures contained in the Instrument for distributions made using the PREP procedures should be read in conjunction with other provisions of Canadian securities legislation in each jurisdiction in which an distribution is being made.
(2) A distribution under the POP system using the PREP procedures is a POP system distribution, and is subject to all the requirements of National Instrument 44-101 and other provisions of securities legislation, as supplemented or varied by the Instrument and the implementing law of the jurisdiction. Reference is made to Part 1 of the Companion Policy to National Instrument 44-101 for a discussion of the relationship between National Instrument 44-101 and various other pieces of securities legislation.1
1 Subsections (1) and (2) are based on paragraphs 2.3(a) and 2.7(a) of National Policy Statement No. 44 ("NP44").
(3) Similarly, a distribution using the PREP procedures not made under the POP system is subject to securities legislation, as supplemented or varied by the Instrument and the implementing law of the jurisdiction.2
2 This subsection is based on the second sentence of paragraph 2.3(a) of NP44
PART 2 PROSPECTUS AMENDMENTS
2.1 Prospectus Amendments
(1) Section 4.4 of the Instrument provides that the size of an offering may be increased or decreased by up to 20 percent between the filing of the prospectus and the filing of the supplemented PREP prospectus. The section further provides that, in cases where such a change in the size of the offering constitutes a material change, that the requirement in Canadian securities legislation to file an amendment if a material change occurs may be satisfied by filing the supplemented PREP prospectus. The certificates required in the supplemented PREP prospectus are those prescribed by subsection 4.5(2) of the Instrument. For changes in the size of the offering by more than 20 percent that constitute a material change, this flexibility in how the requirement in Canadian securities legislation to file an amendment is not available.3
3 This subsection replaces paragraph 2.5(c) of NP44.
(2) The Canadian securities regulatory authorities are of the view that an issuer's ability to use the PREP procedures does not prevent the filing of a prospectus amendment to make some or all of the changes to the prospectus that are permitted to be made by a supplemented PREP prospectus.4
4 This subsection is based on paragraph 4.3(h) of NP44.
PART 3 PREP PROCEDURES
3.1 Firm Commitment Distributions - Paragraph 10 of section 3.3 of the Instrument provides that a base PREP prospectus for securities to be distributed by one or more underwriters that have agreed to purchase the securities at a specified price is not required to indicate that the securities are to be taken up by the underwriters, if at all, on or before a specified date. This subsection provides an exemption from the requirement of securities legislation that this disclosure must be contained in a prospectus. Issuers are reminded that paragraph 1 of subsection 4.5(2) requires all information omitted from a base PREP prospectus to be included in a supplemented PREP prospectus. Therefore, it is necessary to comply with the relevant requirement of securities legislation in a supplemented PREP prospectus relating to specific distributions that are being effected on a firm commitment basis.5
5 This section is based on paragraph 2.7(b)(2) of NP44.
3.2 Best Efforts Distributions - Similarly, paragraph 11 of section 3.3 of the Instrument provides that a base PREP prospectus for a distribution of securities underwritten on a best efforts basis for which a minimum amount of funds are required by an issuer is not required to include disclosure required by securities legislation concerning the maximum length of time for which the distribution may continue and concerning the disposition of subscription funds. Issuers are reminded, as in the previous subsection, that paragraph 1 of subsection 4.5(2) requires all information omitted from a base PREP prospectus to be included in a supplemented PREP prospectus. Therefore, it is necessary to comply with the relevant requirement of securities legislation in a supplemented PREP prospectus relating to specific distributions that are being effected on a best efforts basis.6
6 This section is based on paragraph 2.7(c)(2) of NP44.
3.3 Rights of Rescission or Withdrawal - The Canadian securities regulatory authorities are of the view that statutory rights of rescission or withdrawal commence from the time of the purchaser's receipt of a supplemented PREP prospectus. It is only at this time that the entire prospectus has been delivered.7
7 This section is based on the second sentence of section 4.5 of NP44.
3.4 Supplements not Amendments - The Canadian securities regulatory authorities do not consider a supplemented PREP prospectus to constitute an amendment to a prospectus within the meaning of Canadian securities legislation.8
8 This section is based on the third sentence of paragraph 4.3(c) of NP44.
3.5 Certificates - With respect to the certificate requirements in the Instrument, reference should be made to the provisions of securities legislation of a jurisdiction that provide for a right of action against every person who signs a prospectus or an amendment to a prospectus. The Canadian securities regulatory authorities recognize that, in certain circumstances, a credit supporter may consider that its knowledge of the affairs of the issuer is not such that it considers it appropriate to sign a certificate in the form specified by the Instrument. In these circumstances, if the credit supporter is not a promoter of the issuer or a selling securityholder, the Canadian securities regulatory authorities may allow the credit supporter to sign a different form of certificate. Credit supporters who wish to make application should do so in accordance with Part 6 of the Instrument.9
9 This section is new.