MYM Nutraceuticals Inc.
Multilateral Instrument 11-102 Passport System and National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions – relief granted from section 3.3 of NI 55-104 and subsection 107(2) of the Securities Act (Ontario) – insider reporting obligations – An issuer wants relief from the requirement to file insider reports for its insiders – The insider does not make a discrete investment decision for the disposition; participating insiders do not control or influence the timing of the dispositions of the underlying shares under the automatic plan; dispositions of the underlying shares occur automatically at pre-determined regular intervals; the disposition is not a specified disposition of securities.
Applicable Legislative Provisions
Securities Act, R.S.O. 1990, c. S.5, as am., s. 107(2).
National Instrument 55-104 Insider Reporting Requirements and Exemptions, s. 3.3.
May 2, 2018
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
BRITISH COLUMBIA AND ONTARIO
IN THE MATTER OF
THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS
IN MULTIPLE JURISDICTIONS
IN THE MATTER OF
MYM NUTRACEUTICALS INC.
1 The securities regulatory authority or regulator in each of the Jurisdictions (the Decision Maker) has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the Legislation) that certain “reporting insiders” (the Insiders), as defined in National Instrument 55-104 Insider Reporting Requirements and Exemptions (NI 55-104), be exempt from the requirements in section 3.3 of NI 55-104 and subsection 107(2) of the Securities Act (Ontario) (Ontario Act) to file an insider report within five days following the disposition of securities of the Filer under an automatic share disposition plan (ASDP), subject to certain conditions (the Exemption Sought).
Under the Process of Exemptive Relief Applications in Multiple Jurisdictions (for a dual application):
(a) the British Columbia Securities Commission is the principal regulator for this application;
(b) the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in Alberta; and,
(c) the decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.
2 Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.
3 This decision is based on the following facts represented by the Filer:
1. the Filer is a corporation incorporated in British Columbia and is a reporting issuer in British Columbia, Alberta and Ontario;
2. the Filer is not in default of the securities legislation in any of the jurisdictions in which it is reporting;
3. the Filer’s head office is located at Suite 1500 – 409 Granville Street, Vancouver, British Columbia, V6C 1T2;
4. the authorized share capital of the Filer consists of an unlimited number of common shares without par value and an unlimited number of preferred shares; as of April 23, 2018, there were 108,886,801 common shares (Common Shares) outstanding and no preferred shares outstanding; the Common Shares are listed for trading on the Canadian Stock Exchange;
5. the Filer has adopted a policy (the Policy) which outlines, among other things, the terms upon which the Insiders may establish an ASDP (through enrollment under the Policy and an automatic securities disposition administration agreement (the Administration Agreement) which the Filer is a party to) for selling Common Shares; the Policy is designed to facilitate sales of Common Shares by the Insiders; without automatic disposition processes, the Insiders have limited opportunities to dispose of Common Shares due to insider trading restrictions under applicable securities laws and the Filer’s insider trading policy restrictions;
6. the parameters of an ASDP are set out in the Policy, which outlines the restrictions on sales of Common Shares; the Policy also outlines the mechanics of transfer and sale of Common Shares by a Filer-selected independent third-party broker administrator (the Administrator) which is arm’s length from the Filer and the Insiders; neither the Filer nor any of its directors, officers or employees may disclose any material undisclosed information to the Administrator; the Administrator does not otherwise act for the Insider and does not communicate with any other broker involved in a disposition of securities of the Filer for the Insider outside of the ASDP; and no Insider participating in an ASDP may disclose to the Administrator any information that is intended to or could influence the timing of the sale of Common Shares;
7. an ASDP is an automatic plan and the Insiders cannot make investment decisions through the ASDP; the ASDP under the Policy has been structured to comply with applicable securities legislation and guidance, including section 57.4(3) of the Securities Act (British Columbia) (BC Act), section 175(2)(b) of Regulation 1015 under the Ontario Act, Ontario Commission Staff Notice 55-701 Automatic Securities Disposition Plans and Automatic Securities Purchase Plans (OSC Notice 55-701) and paragraph 147(7)(c) of the Securities Act (Alberta) (Alberta Act), and accordingly, with the intent that sales under such ASDPs will be exempt from section 76(1) of the Ontario Act and from liability under section 134 of the Ontario Act, from section 57.2 of the BC Act and from liability under section 136 of the BC Act, and from section 147(3) of the Alberta Act and from liability under section 194(4) of the Alberta Act; any material change in the terms of any securities of the Filer deposited into an ASDP under the Policy will be disclosed or reported in accordance with applicable securities laws;
8. Insiders are required to complete an enrollment form (Enrollment Form) to participate in an ASDP, including making representations that they are not in possession of material undisclosed information about the Filer and that they are not entering the ASDP as part of a plan to evade the prohibitions against trading with material undisclosed information contained in applicable Canadian securities law;
9. the Insider must complete an Enrollment Form agreed to and acknowledged by the Filer and the Administrator specifying the number of Common Shares that are subject to the ASDP during the period (the Intention Period); the Insider must set a minimum price below which the Administrator will not sell the Common Shares; the Insider must also specify in the Enrollment Form the period when the Common Shares are to be sold and a maximum monthly limit on the number of Common Shares that may be sold under the ASDP;
10. the Administrator will, during the Intention Period and in accordance with the instructions provided in the Enrollment Form, but without any further input or instructions from the Insider or the Filer, attempt to sell the Insider’s Common Shares;
11. the Filer will issue a news release disclosing certain terms of the Insiders’ enrollment under the ASDP in accordance with the terms and conditions of the Policy; the Intention Period for the disposition of Common Shares will commence on the date which is 30 days after such news release;
12. the ASDP is an automatic plan and once an Enrollment Form has been approved by the Filer, the Administrator has acknowledged the instructions, the Administrator’s Agreement has been completed and the public has been notified by news release, the Insider is prohibited from making another discrete investment decision with respect to the automatic plan during the Intention Period, unless the Insider terminates the Enrollment Form in accordance with the terms of the Policy;
13. if the Filer is not in a blackout period and the Insider is not in possession of any undisclosed material information, the Insider may elect to terminate the ASDP by completing a voluntary termination form, which termination must be approved by the Filer; under such circumstances the termination will become effective and sales by the Administrator under an ADSP will cease on the date that is 30 days after the Administrator receives written notice of the election to terminate; subsequent enrollment in a new ASDP or re-enrollment in the existing ASDP cannot have an Intention Period starting less than sixty calendar days after such original notice to the Administrator of termination; other than terminating the ASDP and enrolling in a new ASDP under these requirements, the Insider has no ability to amend the trading instructions or trading parameters under an ASDP or to vary or suspend the ASDP;
14. the Policy requires that the ASDP contain meaningful restrictions on the ability of the Insider to enroll, terminate or modify participation in the ASDP as recommended by OSC Notice 55-701 and any participant’s ASDP accepted by the Filer and approved under the Policy will contain such meaningful restrictions; and
15. any transactions not completed by the Administrator during the Intention Period cannot be processed after the Intention Period.
4 Each of the Decision Makers is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.
The decision of the Decision Makers under the Legislation is that the Exemption Sought is granted provided that each Insider shall file a report, in the form prescribed for insider reports under the Legislation, disclosing on a transaction-by-transaction basis or “in acceptable summary form” (as such term is defined in NI 55-104) all dispositions of Common Shares under the ASDP that have not been previously disclosed by or on behalf of the Insider during a calendar year, on or before March 31 of the next calendar year.
Director, Corporate Finance
British Columbia Securities Commission