Notice

NI 45-106 Prospectus and Registration Exemptions comes into force on September 14, 2005 

The Securities Commission (Adoption of National Instruments) Amendment Regulations, 2005 (No. 7) come into force on September 14, 2005.  The regulations adopt National Instrument 45-106 Prospectus and Registration Exemptions and National Instrument 33-105 Underwriter Conflicts.   

NI 45-106 harmonizes most of the prospectus and registration exemptions currently found in the securities legislation of the provinces and territories.  It replaces most existing local provincial exemptions and consolidates many exemptions to make them more straightforward and user friendly. 

The Commission regulations repeal the following instruments: 

·         National Instrument 32-101 Small Securityholder Selling and Purchase Arrangements;
 

·         Multilateral Instrument 45-103 Capital Raising Exemptions;
 

·         Multilateral Instrument 45-105 Trades to Employees, Senior Officers, Directors and Consultants; and
 

·         National Instrument 62-101 Control Block Distribution Issues.

 The Commission regulations also make consequential amendments to the following instruments: 

·         National Instrument 45-101 Rights Offerings;
 

·         National Instrument 62-103 The Early Warning System and Related Take-over Bid and Insider Reporting Issues; and
 

·         Multilateral Instrument 45-102 Resale of Securities. 
 

Implementation
The Securities Commission (Local Instruments) Amendment Regulations, 2005 will also come into force soon after September 14, 2005.  They are being reviewed by the Minister of Justice.  These regulations: 

• adopt LI 11-502 Removal of Statutory Exemptions.  LI 11-502 removes the exemptions in sections 38, 39, 39.1, 81 and 82 of The Securities Act, 1988 and in section 60(2), 63, 98(2), 99 and 101 of The Securities Regulations from the registration and prospectus requirements of the Act.  These exemptions Are replaced by NI 45-106; and
   
• amend LI 33-502 Requirements for Sale of Certain Securities.  The amendments to NI 33-502 contain a new definition of “exempt security” to replace reference to exemptions in the Act with equivalent exemptions in NI 45-106.  LI 33-502 places restrictions on the use by registrants of certain exemptions contained in The Securities Act, 1988. 

General Rulings Orders

On September 14, 2005 we : 

• Adopt GRO 45-912 Exemption for Co-op and Credit Unions.  GRO 45-912 grants prospectus and registration exemptions to co-operatives and credit unions that issue securities in accordance with The Co-operative Act and The Credit Union Act, 1998.  These acts require co-operatives and credit unions to obtain the approval of the Co-operative Securities Board before they issue securities.  GRO 45-912 grants exemptions that are equivalent to the exemptions in The Securities Act, 1988 before those exemptions were removed by LI 11-502 Removal of Statutory Exemptions.
   
• Amend GRO 11-901 Recognition Order  to replace references to the Act with equivalent provisions in NI 45-102 Resale of Securities and NI 45-106 Prospectus and Registration Exemptions..
   
• Repeal the following General Rulings/Orders because NI 45-106 replaces the exemptions that they contained:
   
• GRO 45-905 In the Matter of Trades by Issuers Upon Exercise of Certain Conversion or Exchange Rights;
   
• GRO 45-908 Offering Memorandum Exemption in Clauses 39(1)(y) and 81(1)(s);
   
• GRO 45-909 Short Term Debt;
   
• GRO 45-910 TSX Venture Exchange Short Form Offering Exemption; and
   
• GRO 47-901 Testing the Waters. 

Local Policies
On September 14, 2005 we repeal the following Local Policies because they are redundant with the adoption of NI 45-106: 

• Local Policy 32-601 Persons Qualified to Give Advice under the Registration Exemptions;
   
• Local Policy 45-602 Qualified Investor Exemption; and
   
• Local Policy 45-603 $150,000 Exemption.

Local Staff Notices
On September 14, 2005 we: 

• Make consequential amendments to the following staff notices:
   
  • 45-703 Monitoring the Use of the Exemption Under NI 45-106 Prospectus and Registration Exemptions;
     
  • 45-704 Review of Offering Memoranda under MI 45-103 Capital Raising Exemptions; and
     
  • 45-705 Preparation and Audit Requirements for FOFI Included in NI 45-106 Offering Memoranda.
     
• Repeal Staff Notice 33-706 Processing of Equity and Fixed Income Trades By Financial Institutions and Mutual Fund Dealers. 

 September 14, 2005

Contact:

Barbara Shourounis
Director, Securities Division
(306) 787-5842

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