Final Amendment to Rule (effective February 13, 1999): OSC Rule - 14-501 - Local Definitions

 

AMENDMENT TO
ONTARIO SECURITIES COMMISSION RULE
RULE 14-501

DEFINITIONS

PART 1 AMENDMENTS

1.1 Amendments

(1) Rule 14-501 Definitions is amended by

(a) deleting the definition of "contractual right of action" insubsection 1.1(2) and replacing it with the following:

"contractual right of action" means a right of action forrescission or damages, that

(a) is against an issuer if it is selling securities,

(b) is against a selling securityholder,

(c) is against an issuer and selling securityholder if theyare both selling securities,

(d) is available to an investor to whom an offeringmemorandum containing a misrepresentation isdelivered by or on behalf of the seller of securities,

(e) is exercisable on notice against the person or companythat granted the right of action not later than 180 daysafter payment is made for the securities or after theinitial payment, if a payment subsequent to the initialpayment is made under a contractual commitmentassumed before, or at the same time as, the initialpayment,

(f) reasonably corresponds to the rights provided insection 130 of the Act applicable to a prospectus andmay be subject to any applicable defences or limitationsavailable under that section, and

(g) includes a provision stating that the right is in additionto any other right or remedy available at law to theinvestor;

(b) deleting the definition of "equity security" in subsection 1.1(2);

(c) adding the following definition to subsection 1.1(2) after thedefinition of "custodian":

"executive officer" means an individual who is or at anytime during the most recently completed financial yearwas (a) a chair of the issuer, if that individual performedthe functions of the office on a full time basis, (b) a vice-chair of the issuer, if that individual performed thefunctions of the office on a full time basis, (c) thepresident of the issuer, (d) a vice-president of theissuer in charge of a principal business unit, division, orfunction such as sales, finance, or production, (e) anofficer of the issuer or any of its subsidiaries whoperformed a policy-making function in respect of theissuer, or (f) any other person who performed a policy-making function in respect of the issuer;

(d) deleting the definition of "issuer bid" in subsection 1.1(2);

(e) deleting the definition of "offering memorandum" in subsection1.1(2) and replacing it with the following:

"offering memorandum" means a document purportingto describe the business and affairs of an issuer thathas been prepared primarily for delivery to and reviewby a prospective purchaser so as to assist theprospective purchaser to make an investment decisionfor a security being sold in a distribution to whichsection 53 of the Act would apply but for the availabilityof one or more of the exemptions contained in Ontariosecurities law but does not include a document settingout current information about an issuer for the benefit ofa prospective purchaser familiar with the issuer throughprior investment or business contacts;

(f) deleting the definition of "portfolio manager" in subsection1.1(2);

(g) deleting the definition of "principal shareholder" in subsection1.1(2) and replacing it with the following:

"principal shareholder", if used to indicate a relationshipwith a person or company, means a person or companythat is the direct or indirect beneficial owner of orexercises control or direction over more than 10 percentof any class or series of voting securities of the personor company;

(h) adding the following definition to subsection 1.1(2) after thedefinition of "selling group member":

"special relationship", when used in reference to aperson or company in a special relationship with areporting issuer, shall be interpreted in accordance withsubsection 76(5) of the Act;

(i) deleting the definition of "take-over bid" in subsection 1.1(2);

(j) adding the following definitions to subsection 1.1(3) after thedefinition of "derivative":

"future-oriented financial information" has the meaningascribed to the term "FOFI" in National Instrument 52-101 Future-Oriented Financial Information; and

"non-redeemable investment fund means an issuer

(a) whose primary purpose is to invest moneyprovided by its securityholders;

(b) that does not invest for the purpose of exercisingeffective control, seeking to exercise effectivecontrol, or being actively involved in themanagement of the issuers in which it invests,other than other mutual funds or non-redeemable investment funds; and

(c) that is not a mutual fund.

PART 2 EFFECTIVE DATE

2.1 Effective Date

(1) This Rule, other than paragraphs 1.1(1)(b), (d) and (i), comes intoforce on the date specified by the Act.

(2) Paragraphs 1.1(1)(b), (d) and (i) come into force on the date thatamendments to National Instrument 14-101 Definitions adding theterms contained in those paragraphs to the National Instrument comeinto force.