51-503CP - Transitional Orders Relating To Former CDN Quoted Issuers And Former TSE Issuers [CP - Rescinded]

PART 1 BACKGROUND AND PURPOSE

1.1 Background - As part of the restructuring of the Canadian stock exchanges, CDN will cease operating a quotation and trade reporting system in Ontario and CDNX will establish a new Tier 3 and will invite to list on Tier 3 issuers that, as at September 1, 2000, were either CDN quoted issuers or issuers that had submitted a completed application to be quoted on CDN and are subsequently approved for quotation.  Once they are listed and posted for trading on CDNX, CDNX-CDN Issuers, if not already reporting issuers in British Columbia, will automatically become reporting issuers in British Columbia. 

As a result of the stock exchange restructuring, a number of former TSE issuers that are reporting issuers in Ontario and have been suspended from trading on the TSE for failing to meet revised continued listing requirements will also become reporting issuers in British Columbia when they are first listed and posted for trading on CDNX.

1.2 Purpose - The purpose of BOR#51-503 (BC) is to grant CDNX-CDN Issuers and CDNX-TSE Issuers that satisfy the definition of "New Reporting Issuer" transitional relief from certain filing obligations imposed on reporting issuers under the Act.  The relief provided under BOR#51-503 (BC) will be available until June 30, 2001.  After that time, New Reporting Issuers will be subject to all requirements associated with reporting issuer status and, if applicable, exchange issuer status under British Columbia law, and will be expected to comply with all applicable provisions of British Columbia securities law.

Under BOR#51-503 (BC), a New Reporting Issuer receives all the benefits of being a reporting issuer.  Provided they comply with the equivalent requirements under Ontario Securities Law and modified filing requirements specified in BOR#51-503 (BC), New Reporting Issuers and certain other persons (e.g. insiders) are exempt from certain filing requirements and the requirement to pay related filing fees.  In addition, persons that acquired securities of New Reporting Issuers in exempt

transactions may take advantage of the resale rules in sections 140, 141, 142 and 143 of the Rules if the conditions set out in the resale rules are met.

Also, under BOR#51-503 (BC), New Reporting Issuers that are exchange issuers under section 1(1) of the Act are entitled to the benefits available to exchange issuers (e.g. additional registration and prospectus exemptions) and are exempt from certain filing requirements (e.g. filing Form 61 Quarterly Reports and paying the associated filing fees) that would otherwise apply to an exchange issuer.

PART 2 DEFINITIONS AND INTERPRETATION

2.1 Interpretation of defined terms - Terms used in this Companion Policy that are defined or used in BOR#51-503 (BC) should be read in accordance with BOR#51-503 (BC).

2.2 Interpretation of “in the same manner” - Where they relate specifically to the filing obligations of an issuer or other person under BOR#51-503 (BC), the words “in the same manner” have been used to clarify that Equivalent Ontario Documents that are filed with the Ontario Securities Commission via SEDAR must also be filed with the Commission via SEDAR.

2.3 Interpretation of “listed” - BOR#51-503 (BC) applies to New Reporting Issuers that have issued securities that are “listed” on CDNX.  By not requiring that the New Reporting Issuer’s securities also be “posted for trading”, BOR#51-503 (BC) will apply to a New Reporting Issuer that has its securities suspended from trading on CDNX.

2.4 Definition of Ontario Securities Law - Under Section 1(1) of the Securities Act (Ontario), “Ontario Securities Law” means:

(a) the Securities Act (Ontario);

(b) the regulations made under the Securities Act (Ontario) and, unless the context otherwise indicates, includes the rules made under section 143 of the Securities Act (Ontario) and orders, rulings and policies listed in the Schedule; and

(c) in respect of a person or company, a decision of the OSC or the Executive Director of the OSC, a Director or Deputy Director of the OSC, or a person employed by the OSC in a position designated by the Executive Director of the OSC for the purpose of the definition of “Director” under the Securities Act (Ontario).