72-503 - Distribution of Securities outside British Columbia [BCI - Rescinded]
The British Columbia Securities Commission, having considered that to do so would not be prejudicial to the public interest, orders, effective June 29, 2001, that:
1. the attached BC Instrument 72-503 entitled “Distribution of Securities Outside British Columbia” is made; and
2. BOR#98/11 is revoked.
June 27, 2001
Brent W. Aitken
(This part for administrative purposes only and is not part of the Order)
Authority under which Order is made:
Act and sections:- Securities Act, sections 48 and 76
BC INSTRUMENT 72-503 (Previously BOR#98/11)
Distribution of Securities outside British Columbia
Order under Sections 48 and 76 of theSecurities Act
1. This BC Instrument provides relief for an issuer that has equity securities listed on a recognized market and that sells securities to purchasers outside British Columbia, subject to certain conditions.
2. In this Instrument, "recognized market" means a recognized market as defined in Local Policy Statement 3-27 or any successor instrument.
3. Sections 34 and 61 of the Securities Act do not apply to a distribution of securities by an issuer provided that:
(a) the distribution is not made to a purchaser resident in British Columbia,
(b) the purchaser certifies in the subscription agreement that the purchaser is not resident in British Columbia and the issuer does not believe, and has no reasonable grounds to believe, that the certification is false,
(c) the purchaser acknowledges in the subscription agreement that,
(i) no securities commission or similar regulatory authority has reviewed or passed on the merits of the securities,
(ii) there is no government or other insurance covering the securities,
(iii) there are risks associated with the purchase of the securities,
(iv) there are restrictions on the purchaser's ability to resell the securities and it is the responsibility of the purchaser to find out what those restrictions are and to comply with them before selling the securities, and
(v) the issuer has advised the purchaser that the issuer is relying on an exemption from the requirements to provide the purchaser with a prospectus and to sell securities through a person registered to sell securities under the Securities Act and, as a consequence of acquiring securities pursuant to this exemption, certain protections, rights and remedies provided by the Securities Act, including statutory rights of rescission or damages, will not be available to the purchaser,
(d) the issuer has equity securities listed or quoted on a recognized market,
(e) the issuer files a report of the trade in the form required under section 139 of the Securities Rules on or before the 10th day after the distribution, and
(f) the issuer endorses the certificate representing the security with a legend stating that the security is subject to a hold period and may not be traded in British Columbia until the expiry of the hold period except as permitted by the Securities Act and Securities Rules and, if the issuer is a reporting issuer at the date of issue, with a statement that specifies the date the hold period expires.
4. A trade in a security acquired by the seller under paragraph 3 above is deemed to be a distribution unless the holder complies with the resale requirements that would have applied if the security were acquired under section 74(2)(4) of the Securities Act.
5. If a security acquired under a prospectus exemption is converted or exchanged into another security, the converted or exchanged security is considered the same security under this Instrument.