National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- relief from short form prospectus qualification criteria in paragraph 2.2(e) of NI 44-101 Short Form Prospectus Distributions and shelf prospectus qualification criteria in subsections 2.2(1) and 2.2(2) and subparagraph 2.2(3)(b)(iii) of NI 44-102 Shelf Distributions, which require that the equity securities of the issuer be listed and posted for trading on a 'short form eligible exchange' -- Issuer's common shares listed and posted for trading on both the TSX and NYSE, but expected to be delisted from the TSX -- NYSE not a 'short form eligible exchange' -- Relief granted provided the issuer complies with all other qualification criteria and its common shares are listed and posted for trading on the NYSE.
Applicable Legislative Provisions
National Instrument 44-101 Short Form Prospectus Distributions, ss. 2.2(e), 8.1.
National Instrument 44-102 Shelf Distributions, ss. 2.2(1), 2.2(2), 2.2(3)(b)(iii), 11.1.
October 4, 2019
IN THE MATTER OF THE SECURITIES LEGISLATION OF BRITISH COLUMBIA AND ONTARIO (the Jurisdictions) AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF ZYMEWORKS INC. (the Filer)
¶ 1 The securities regulatory authority or regulator in each of the Jurisdictions (Decision Maker) has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the Legislation) that the qualification criteria in Section 2.2(e) of National Instrument 44-101 Short Form Prospectus Distributions (NI 44-101) and subsections 2.2(1) and 2.2(2) and subparagraph 2.2(3)(b)(iii) of National Instrument 44-102 Shelf Distributions (NI 44-102) that the equity securities of the Filer be listed and posted for trading on a short form eligible exchange (as defined in NI 44-101), not apply to the Filer (the Exemption Sought).
Under the Process for 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 Subsection 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in Alberta, Saskatchewan, Manitoba, Québec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, Yukon, the Northwest Territories and Nunavut; and
(c) this 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 continued under the Business Corporations Act (British Columbia); the principal office of the Filer is 1385 West 8th Avenue, Suite 540, Vancouver, British Columbia, V6H 3V9 and its registered office is at Suite 2600, Three Bentall Centre 595 Burrard Street, P.O. Box 49314 Vancouver, British Columbia, V7X 1L3;
2. the Filer is a reporting issuer in each province and territory of Canada and is not in default of securities legislation in any jurisdiction of Canada;
3. as at September 26, 2019, the common shares of the Filer are listed and posted for trading on the TSX under the symbol ZYME, but the Filer expects the common shares to be delisted from the TSX on or about October 1, 2019;
4. the common shares of the Filer are listed and posted for trading on the New York Stock Exchange (the NYSE) under the symbol ZYME;
5. the Filer is subject to reporting obligations under the 1934 Act, files its continuous disclosure documents with the SEC, and is not in default of any requirement of applicable securities laws of the United States;
6. the Filer's authorized capital consists of an unlimited number of common shares and an unlimited number of preferred shares; as of September 12, 2019, 39,335,992 common shares and no preferred shares were issued and outstanding;
7. a short form eligible exchange is defined in NI 44-101 as the TSX, Tier 1 and Tier 2 of the TSX Venture Exchange, Aequitas NEO Exchange Inc. or the Canadian Securities Exchange;
8. the Filer filed a final short form base shelf prospectus dated March 6, 2019 providing for the distribution from time to time of common shares, preferred shares, debt securities, warrants, subscription receipts and units of the Filer in each of the provinces and territories of Canada;
9. Other than the requirement that the Filer's equity securities be listed and posted for trading on a short form eligible exchange (as defined in NI 44-101), the Filer meets all of the short form prospectus qualification requirements under NI 44-101, as the Filer:
(a) is an electronic filer under National Instrument 13-101 System for Electronic Document Analysis and Retrieval (SEDAR);
(b) is a reporting issuer in each of the provinces and territories of Canada;
(c) has filed with the securities regulatory authorities in each of such jurisdictions all periodic and timely disclosure documents that it is required to have filed in such jurisdiction: (i) under applicable securities legislation; (ii) pursuant to any order issued by the securities regulatory authorities in such jurisdiction; and (iii) pursuant to any undertaking to the securities regulatory authorities in such jurisdiction;
(d) has, in each such jurisdiction, current annual financial statements (as defined in NI 44-101) and a current AIF (as defined in NI 44-101); and
(e) is not an issuer whose operations have ceased or whose principal asset is cash, cash equivalents or its exchange listing.
¶ 4 Each of the Decision Makers is satisfied that the decision meets the test set out in the Legislation for the Decision Makers to make the decision.
The decision of the Decision Makers under the Legislation is that the Exemption Sought is granted provided that:
(a) the Filer complies with all other applicable requirements, procedures and qualification criteria of NI 44-101, other than the requirement in Section 2.2(e) of NI 44-101 that the Filer's equity securities be listed and posted for trading on a short form eligible exchange (as defined in NI 44-101); and
(b) the common shares of the Filer are listed and posted for trading on the NYSE on the date of filing by the Filer of a preliminary short form prospectus pursuant to NI 44-101 or a preliminary short form base shelf prospectus pursuant to NI 44-102.