51-504CP - Transitional Exemptions Relating to WSE Issuers [CP - Rescinded]

BC COMPANION POLICY 51-504CP

TRANSITIONAL EXEMPTIONS RELATING TO WSE ISSUERS

PART 1 BACKGROUND AND PURPOSE

1.1 Background - As part of the restructuring of the Canadian stock exchanges, the Winnipeg Stock Exchange will cease operations and CDNX will commence operations as a stock exchange in Manitoba.  CDNX has invited to list certain issuers that were listed on the WSE and in good standing, as determined by the WSE, as at November 3, 2000 and issuers that had submitted by November 24, 2000 an application to list on the WSE.  CDNX has not invited to list any issuers that were interlisted on the WSE and any other exchange in Canada.  Once listed and posted for trading on CDNX, these invited issuers will automatically become exchange issuers and, if not so already, reporting issuers in British Columbia. 

1.2 Purpose - The purposes of BCI#51-504 are to:

(a) grant WSE issuers (including certain applicants for listing) that fall within the definition of “New Reporting Issuer” transitional relief from certain filing obligations imposed on reporting issuers under the Act; and

(b) grant these issuers and certain other issuers previously interlisted on the WSE and CDNX that fall within the definition of “New Exchange Issuer” transitional relief from the filing obligations imposed on exchange issuers under the Act. 

A New Reporting Issuer that, subsequent to listing on CDNX, takes any other action (e.g. files a prospectus) that would otherwise make it a reporting issuer in British Columbia (if it were not already reporting in British Columbia) will no longer be entitled to rely on BCI#51-504 and will be subject to all the requirements associated with reporting issuer status under British Columbia law.

1.3 New Reporting Issuers - Under BCI#51-504, New Reporting Issuers are divided into two further categories of issuers:  (1) issuers that have reporting obligations in either or both of Ontario and Alberta (other than as a result of listing on CDNX) (“Extraprovincial Reporting Issuers”) and (2) issuers that do not have reporting obligations in Ontario or in Alberta (other than as a result of listing on CDNX) (“Manitoba Issuers”).  The documents to be filed with the Commission during the Transition Period differ depending on whether an issuer is an Extraprovincial Reporting Issuer or a Manitoba Issuer. 

Provided they comply with BCI#51-504, New Reporting Issuers receive all the benefits of being a reporting issuer and they and certain other persons (e.g. insiders) are exempt from certain filing requirements and the requirement to pay related filing fees until June 30, 2001. 

1.4 Extraprovincial Reporting Issuers - For an Extraprovincial Reporting Issuer to obtain relief under BCI#51-504, it must file with the Commission the document it is required to file with the ASC (where the issuer was previously reporting in Alberta or takes any action after listing on CDNX that would otherwise make it a reporting issuer in Alberta) or the OSC (where the issuer is reporting in Ontario and not in Alberta). 

Insiders and offerors of these issuers must file insider reports and early warning acquisition reports with the applicable Extraprovincial Commission to get relief under BCI#51-504.

Where an Extraprovincial Reporting Issuer is a reporting issuer in both Ontario and Alberta (other than as a result of listing on CDNX), that issuer need only file with the Commission the document required to be filed with the ASC.

1.5 Manitoba Issuers - For a Manitoba Issuer to obtain relief under BCI#51-504, it must, in most cases, file with the Commission the document required under Manitoba Securities Laws and, in some cases, the document required by the WSE as of November 24, 2000.  In the case of interim financial statements in particular, BCI#51-504 requires that Manitoba Issuers file with the Commission the second quarter statements required under both the Securities Act (Manitoba) and by the WSE to get relief from the corresponding British Columbia filing requirements.

Manitoba Issuers that do not have reporting obligations under Manitoba Securities Laws or were not subject to the WSE Requirements will be able to get relief under BCI#51-504 only if they comply with both the MSA Requirements and the WSE Requirements as if they were bound by them.

Persons involved with these issuers must file insider reports and early warning acquisition reports with the Commission, rather than with the MSC as is required for insiders and offerors of Manitoba Issuers that have reporting obligations under Manitoba Securities Laws. 

An issuer should look to the WSE’s Operating Policies and form of Listing Agreement, in addition to any other relevant sources, for information regarding the WSE’s filing requirements.  Manitoba Issuers and persons involved with them should note that while the MSC may permit paper filings, the documents they must file with the Commission under BCI#51-504 (other than insider reports) must be filed via SEDAR.

A Manitoba Issuer that becomes a reporting issuer in Ontario after listing on CDNX will become an Extraprovincial Reporting Issuer and will be required to comply with the requirements for Extraprovincial Reporting Issuers if it wishes to take advantage of the relief provided by
BCI#51-504. 

Similarly, a Manitoba Issuer that, subsequent to listing on CDNX, takes any other action (e.g. files a prospectus) that would make it a reporting issuer in Alberta (if it were not already reporting in Alberta) must comply with the filing requirements for Extraprovincial Reporting Issuers to rely on BCI#51-504.

1.6 New Exchange Issuers - Also, under BCI#51-504, New Exchange Issuers are entitled to the benefits available to exchange issuers (e.g. additional registration and prospectus exemptions) and are exempt from the filing requirements that would otherwise apply to an exchange issuer.  Under paragraph (a)(ii) of the definition of New Exchange Issuer, New Exchange Issuers include any WSE issuer that also had (and currently has) securities listed on CDNX and that ceased to be listed on the WSE at any time between October 12, 2000 and November 24, 2000.

1.7 Availability of Relief - The relief provided under BCI#51-504 will be available until June 30, 2001.  After that time, New Reporting Issuers and New Exchange Issuers will be subject to all requirements associated with reporting issuer status and exchange issuer status, as applicable, under British Columbia law, and will be expected to comply with all applicable provisions of British Columbia securities law.

PART 2 DEFINITIONS AND INTERPRETATION

2.1 Interpretation of defined terms - Terms used in this Companion Policy that are defined or used in BCI#51-504 should be read in accordance with BCI#51-504.

2.2 Interpretation of “in the same manner” - Where they relate specifically to the filing obligations of an Extraprovincial Reporting Issuer (or a person involved with an Extraprovincial Reporting Issuer) under BCI#51-504, the words “in the same manner” have been used to clarify that Extraprovincial Documents that are filed with the applicable Extraprovincial Commission via SEDAR must also be filed with the Commission via SEDAR.

2.3 Interpretation of “listed” - BCI#51-504 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”, BCI#51-504 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).

2.5 Definition of Alberta Securities Laws - Under the Securities Act (Alberta), “Alberta Securities Laws” means:

(a) the Securities Act (Alberta);

(b) the regulations made under the Securities Act (Alberta) and, unless the context otherwise indicates, includes the rules made by the ASC under section 196.1 of the Securities Act (Alberta); and

(c) any decisions made by the ASC or the Executive Director of the ASC.