Notice of Proposed Policy (Request for Comments): OSC Policy - 12-602 - Deeming an Issuer from Certain Other Canadian Jurisdictions to be a Reporting Issuer in Ontario

NOTICE OF PROPOSED ONTARIO SECURITIES COMMISSION

POLICY 12-602

DEEMING AN ISSUER FROM CERTAIN OTHER CANADIAN JURISDICTIONS

TO BE A REPORTING ISSUER IN ONTARIO

Purpose of Proposed Policy

The purpose of the proposed Policy is to provide information about the procedure for making an application under section 83.1(1) of the Securities Act (Ontario) (the "Act") and to inform all interested parties of the circumstances in which the Ontario Securities Commission (the "Commission") would generally grant an order under section 83.1(1) of the Act to certain issuers. The proposed Policy is intended to deal primarily with issuers listed on the Canadian Venture Exchange Inc. ("CDNX") and issuers who have been reporting issuers or reporting issuer equivalents in one or more of British Columbia, Alberta, Saskatchewan, Manitoba, Quebec or Nova Scotia for at least 12 months.

The proposed Policy is an initiative of the Commission and will be adopted as a policy in Ontario.

Terms used in the proposed Policy that are defined or interpreted in the definition instruments in force in Ontario should be read in accordance with those definition instruments, unless the context otherwise requires.

Background

In December, 1999, section 83.1 was added to the Act under the More Tax Cuts for Jobs, Growth and Prosperity Act, 1999. Section 83.1 provides that the Commission may make an order deeming an issuer to be a reporting issuer for purposes of Ontario Securities Law if the Commission considers that it would not be prejudicial to the public interest.

Summary of Proposed Policy

The proposed Policy provides that the Commission will generally grant an order under section 83.1(1) to an issuer, in good standing, who has securities listed and posted for trading on CDNX. Absent Ontario's participation in the Capital Pool Company Program administered by CDNX, the proposed Policy would not apply to any singular issuer who obtained a listing on CDNX through the Capital Pool Company Program until at least 12 months after its Qualifying Transaction (as defined in CDNX Policy 2.4).

The proposed Policy also provides that the Commission will generally grant an order under section 83.1(1) to an issuer who has been a reporting issuer or reporting issuer equivalent, in good standing, for at least 12 months in one or more of British Columbia, Alberta, Saskatchewan, Manitoba, Quebec or Nova Scotia.

The proposed Policy provides that, in reviewing an application under section 83.1(1), Commission staff may review the applicant's continuous disclosure record from another jurisdiction and require any deficiencies to be addressed before recommending the application.

In addition, the proposed Policy informs interested parties about the documentation to be provided by an applicant in connection with an application made under section 83.1(1).

Related Instruments

The proposed Policy is related to section 83.1(1) of the Act which provides that the Commission may, upon application, make an order deeming an issuer to be a reporting issuer for purposes of Ontario securities law.

Unpublished Materials

In proposing the Policy, the Commission has not relied on any significant unpublished study, report, decision or other written materials.

Comments

Interested parties are invited to make written submissions with respect to the proposed Policy. Submissions received by May 9, 2001 will be considered.

Submissions should be made in duplicate and delivered to the attention of:

John Stevenson, Secretary
Ontario Securities Commission
20 Queen Street West
Suite 1903, Box 55
Toronto, Ontario, M5H 3S8
Email: [email protected]

A diskette containing an electronic copy of the submission (in DOS or Windows format -preferably WordPerfect) should also be submitted. As the Act requires that a summary of written comments received during the comment period be published, confidentiality of submissions cannot be maintained. Questions may be referred to:

Marsha Gerhart
Senior Legal Counsel, Corporate Finance
Ontario Securities Commission
Email: [email protected]
(416) 595-8918

Proposed Policy

The text of the proposed Policy follows.

March 9, 2001.

 

ONTARIO SECURITIES COMMISSION POLICY 12-602

DEEMING AN ISSUER FROM CERTAIN OTHER CANADIAN JURISDICTIONS
TO BE A REPORTING ISSUER IN ONTARIO

PART 1 - APPLICATION

1.1 The procedures set forth in this Policy Statement apply to applications made to the Ontario Securities Commission (the "Commission") under section 83.1(1) of the Securities Act (Ontario) (the "Act") for an order deeming an issuer to be a reporting issuer for purposes of Ontario securities law (a "Deeming Order") where the applicant issuer is a reporting issuer in certain other Canadian jurisdictions.

1.2 Notwithstanding section 1.1 of this Policy Statement, sections 1.3 and 1.4 of Part 1 and Parts 4 and 5 of this Policy Statement apply to all applications made under section 83.1(1) of the Act.

1.3 The procedures set forth in OSC Policy 2.1 - Applications to the Ontario Securities Commission, or any successor instrument, apply to all applications made under section 83.1(1) of the Act except to the extent modified by this Policy Statement.

1.4 Notwithstanding anything contained in this Policy Statement, the Commission retains its discretion to act in the public interest with respect to its consideration of all applications made under section 83.1(1) of the Act.

PART 2 - CDNX-LISTED ISSUERS

2.1 Unless it is otherwise prejudicial to the public interest to do so, upon application under section 83.1(1) of the Act, a Deeming Order will generally be granted by the Commission to an issuer whose securities are listed and posted for trading on the Canadian Venture Exchange Inc. ("CDNX")⁽¹⁾ if;

(1) the issuer is in good standing in all jurisdictions in which it is a reporting issuer or a reporting issuer equivalent; and

(2) the issuer is in good standing under the rules, regulations and policies of CDNX.

2.2 In order to independently assess the "good standing" referred to in subsection 2.1(2), staff may review the applicant issuer's continuous disclosure record and request that any deficiencies in that record be addressed prior to any recommendation under section 83.1(1) of the Act being made.

PART 3 - NON-CDNX LISTED ISSUERS

3.1 Unless it is otherwise prejudicial to the public interest to do so, upon application under section 83.1(1) of the Act, a Deeming Order will generally be granted by the Commission to an issuer who is a reporting issuer in British Columbia, Alberta, Saskatchewan, Quebec or Nova Scotia or is a reporting issuer equivalent in Manitoba (the "Relevant Jurisdictions") and whose securities are not listed on CDNX if:

(1) the issuer has been a reporting issuer or a reporting issuer equivalent, as applicable, in one or more Relevant Jurisdictions for at least 12 months prior to the date of the application; and

(2) the issuer is in good standing in all jurisdictions in which it is a reporting issuer or a reporting issuer equivalent.

3.2 In order to independently assess the "good standing" referred to in subsection 3.1(2), staff may review the applicant issuer's continuous disclosure record and request that any deficiencies in that record be addressed prior to any recommendation under section 83.1(1) of the Act being made.

PART 4 - APPLICATION PROCEDURE

4.1 An application made under section 83.1(1) of the Act should include:

(1) if applicable, particulars of the jurisdictions in which the issuer is a reporting issuer or a reporting issuer equivalent and the date the issuer became a reporting issuer in each such jurisdiction;

(2) if applicable, particulars of the stock exchanges or trading or quotation systems on which the issuer's securities are traded or quoted;

(3) particulars of any penalties or sanctions imposed against the issuer by a court relating to Canadian securities legislation or by a Canadian securities regulatory authority and the grounds on which they were imposed or the terms of the settlement agreement and the circumstances that gave rise to the settlement agreement;

(4) particulars of any penalties or sanctions imposed and the grounds on which they were imposed or the terms of the settlement agreement and the circumstances that gave rise to the settlement agreement, if a director or officer of the issuer, or a shareholder holding sufficient securities of the issuer to affect materially the control of the issuer has (a) been subject to any penalties or sanctions imposed by a court relating to Canadian securities legislation or by a Canadian securities regulatory authority or has entered into a settlement agreement with a Canadian securities regulatory authority, or (b) been subject to any other penalties or sanctions imposed by a court or regulatory body that would be likely to be considered important to a reasonable investor making an investment decision;

(5) a letter confirming that the issuer is in good standing, dated within 30 days of the date of the application, from each of the stock exchanges on which the issuer's securities are listed and posted for trading;

(6) a certificate of no default, dated within 10 days of the date of the application, from the securities regulatory authority in each jurisdiction in which the issuer is a reporting issuer or a reporting issuer equivalent;

(7) for security check purposes, a completed Authorization of Indirect Collection of Personal Information in the form attached hereto as Appendix A for each director, executive officer and promoter, if any, and each director and executive officer of the promoter, if any, of the issuer; and

(8) the filing fee prescribed under Schedule I to the Regulation made under the Act.

PART 5 - SEDAR

5.1 Immediately upon receipt of a Deeming Order, the issuer will be expected to amend its SEDAR Profile to indicate that it is a reporting issuer in Ontario.

APPENDIX A

AUTHORIZATION OF INDIRECT COLLECTION OF PERSONAL INFORMATION

The attached Schedule 1 contains information concerning the name, position with or relationship to the applicant, name and address of employer, if other than the applicant, residential address, passport number and date of issuance, date and place of birth and citizenship of each director, executive officer, promoter, if any, and each director and executive officer of the promoter, if any, of the applicant named below (the "Issuer"). The Issuer hereby confirms that each person or company listed on Schedule 1

(a) has been notified by the Issuer

(i) of the Issuer's delivery to the Commission of the information pertaining to the person or company as set out in Schedule 1,

(ii) that such information is being collected indirectly by the Commission under the authority granted to it under the Securities Act (Ontario),

(iii) that such information is being collected for the purpose of enabling the Commission to discharge its obligations under the provisions of the Securities Act (Ontario) that permits the Commission to refuse to grant an order deeming an issuer to be a reporting issuer for the purposes of Ontario securities law where it would be prejudicial to the public interest, and

(iv) that the title, business address and business telephone number of the public official who can answer questions about the Commission's indirect collection of the information is:

Administrative Assistant to the Director of Corporate Finance
Ontario Securities Commission
20 Queen Street West
Suite 1903, Box 55
Toronto, Ontario M5H 3S8
(416) 597-0681

(b) has authorized the indirect collection of the information by the Commission.

 

Date: ________________________

_____________________________

Name of Issuer

Per:__________________________

______________________________

Name

______________________________

Official Capacity

(Please print the name of the individual whose signature appears in the official capacity)

Schedule 1 Personal Information to Appendix A

Authorization of Indirect Collection of Personal Information

[Name of Issuer]

Name and Position with or Relationship to Issuer	Name and Address of Employer, if other than issuer	Residential Address [If Residential Address is outside North America provide Passport No. and Date of Issuance]	Date and Place of Birth	Citizenship

 

1. Absent Ontario's participation in the Capital Pool Company Program of CDNX, the Commission will not generally deem a Capital Pool Company Program issuer to be a reporting issuer in Ontario until at least 12 months following such issuer's Qualifying Transaction (as defined in CDNX Policy 2.4).