Securities Law & Instruments

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CSA Staff Notice 45-320
Exemptions for Certain Foreign Issuers from the Requirement to Identify Purchasers as Registrants or Insiders in
Reports of Exempt Distribution



July 7, 2016

Introduction

On April 7, 2016, the Canadian Securities Administrators (the CSA or we) published amendments to National Instrument 45-106 Prospectus Exemptions (NI 45-106), which came into force in all CSA jurisdictions on June 30, 2016.{1} The amendments to NI 45-106 introduced a new harmonized report of exempt distribution, Form 45-106F1 Report of Exempt Distribution (Form 45-106F1).

This Notice addresses the granting of an exemption for certain foreign issuers from the requirement in Schedule 1 of Form 45-106F1 to identify whether a purchaser is a registrant or an insider of the issuer.

Substance and Purpose

In Schedule 1 of Form 45-106F1, issuers and underwriters are required to identify whether a purchaser is a registrant or an insider of the issuer. This requirement is found in clauses (f)1 and (f)2{2} of Schedule 1, respectively. In general, this information is necessary for securities regulators to identify connections between purchasers and issuers, which facilitates our oversight of the exempt market and supports our compliance programs.

Since publication of Form 45-106F1 on April 7, 2016, the CSA has been advised of concerns expressed by foreign issuers and dealers conducting offerings into Canada about the requirement to determine whether a purchaser is a registrant or an insider of the issuer, as those terms are defined under Canadian securities law.

In light of these concerns, relief is being provided from the requirement to disclose whether a purchaser is a registrant or an insider of the issuer if one or more of the following apply:

(a) the issuer is a foreign public issuer;{3}

(b) the issuer is a wholly owned subsidiary of a foreign public issuer;{4}

(c) the issuer is distributing eligible foreign securities only to permitted clients.{5}

This relief aligns with the exemptions already provided to certain foreign issuers in Item 9 and Schedule 2 of Form 45-106F1.

All CSA members, except Ontario, are issuing blanket orders effective June 30, 2016.{6} The blanket orders are available on the websites of the applicable CSA members and a list of the blanket orders is contained in Annex A of this Notice.

As blanket orders are not authorized under Ontario securities law, the Ontario Securities Commission (the OSC) has approved an amendment instrument (the Ontario Amendment) providing the same relief that will amend NI 45-106 in Ontario only. If the Ontario Minister of Finance approves the Ontario Amendment within 60 days of delivery of the Ontario Amendment, it will come into force 15 days after the Ontario Amendment is approved. More detail of the Ontario Amendment is provided in Chapter 5 of the July 7, 2016 OSC Bulletin, and is also available on the OSC website at http://www.osc.gov.on.ca.

Annex to Notice

Annex A -- List of Blanket Orders

Questions

If you have any questions about this Notice, please contact any of the following:

Jo-Anne Matear
Daphne Wong
Manager, Corporate Finance Branch
Legal Counsel, Corporate Finance Branch
Ontario Securities Commission
Ontario Securities Commission
416-593-2323
416-593-8125
jmatear@osc.gov.on.ca
dwong@osc.gov.on.ca
 
Kevin Yang
Frederick Gerra
Senior Research Analyst, Strategy and Operations
Legal Counsel, Investment Funds and Structured Products
Ontario Securities Commission
Ontario Securities Commission
416-204-8983
416-204-4956
kyang@osc.gov.on.ca
fgerra@osc.gov.on.ca
 
Lina Creta
Senior Accountant, Compliance and Registrant
Regulation Branch
Ontario Securities Commission
416-593-8963
lcreta@osc.gov.on.ca
 
Victoria Steeves
Jody-Ann Edman
Senior Legal Counsel, Corporate Finance
Assistant Manager, Financial Reporting
British Columbia Securities Commission
British Columbia Securities Commission
604-899-6791
604-899-6698
vsteeves@bcsc.bc.ca
jedman@bcsc.bc.ca
 
Christopher Peng
Steven Weimer
Legal Counsel, Corporate Finance
Team Lead, Compliance, Data & Risk
Alberta Securities Commission
Alberta Securities Commission
403-297-4230
403-355-9035
christopher.peng@asc.ca
steven.weimer@asc.ca
 
Tony Herdzik
Wayne Bridgeman
Deputy Director, Corporate Finance
Deputy Director, Corporate Finance
Financial and Consumer Affairs Authority of Saskatchewan
Manitoba Securities Commission
306-787-5849
204-945-4905
tony.herdzik@gov.sk.ca
wayne.bridgeman@gov.mb.ca
 
Georgia Koutrikas
Suzanne Boucher
Analyst, Corporate Finance
Senior Analyst, Investment Funds
Autorité des marchés financiers
Autorité des marchés financiers
514-395-0337 ext: 4393
514-395-0337 ext: 4477
georgia.koutrikas@lautorite.qc.ca
suzanne.boucher@lautorite.qc.ca
 
Ella-Jane Loomis
Kevin G. Redden
Senior Legal Counsel, Securities
Director, Corporate Finance
Financial and Consumer Services Commission (New Brunswick)
Nova Scotia Securities Commission
506-658-2602
902-424-5343
ella-jane.loomis@fcnb.ca
kevin.redden@novascotia.ca
 
Jack Jiang
Steven D. Dowling
Securities Analyst, Corporate Finance
Acting Director
Nova Scotia Securities Commission
Consumer, Labour and Financial Services Division Department of Justice and Public Safety
902-424-7059
Government of Prince Edward Island
jack.jiang@novascotia.ca
902-368-4551
sddowling@gov.pe.ca
 
John O'Brien
Rhonda Horte
Superintendent of Securities
Securities Officer
Office of the Superintendent of Securities
Office of the Yukon Superintendent of Securities
Government of Newfoundland and Labrador
Government of Yukon
709-729-4909
867-667-5466
JohnOBrien@gov.nl.ca
rhonda.horte@gov.yk.ca
 
Thomas W. Hall
Jeff Mason
Superintendent of Securities
Superintendent of Securities
Department of Justice
Department of Justice
Government of the Northwest Territories
Government of Nunavut
867-767-9305
867-975-6591
tom_hall@gov.nt.ca
jmason@gov.nu.ca

{1} It is expected the amendments to NI 45-106 will come into force in Saskatchewan but not on June 30, 2016.

{2} Clause (f)2 is not applicable if the issuer is an investment fund.

{3} "Foreign public issuer" is defined in Part B1 of Form 45-106F1.

{4} Guidance on what is a wholly owned subsidiary of a foreign public issuer is provided in Item 9 of Form 45-106F1.

{5} "Eligible foreign security" and "permitted client" are defined in Part B1 of Form 45-106F1.

{6} As Saskatchewan's amendments to NI 45-106 will come into force after June 30, 2016, Saskatchewan will issue the blanket order when the amendments are effective.

 

ANNEX A

LIST OF BLANKET ORDERS

Alberta Securities Commission
Alberta Securities Commission Blanket Order 45-518 Exemption Regarding Certain Purchaser Information
 
British Columbia Securities Commission
BC Instrument 45-537 Exemptions from certain requirements in Form 45-106F1 Report of Exempt Distribution.
 
The Manitoba Securities Commission
Blanket Order 45-504 Exemptions from Certain Requirements in Form 45-106F1 Report of Exempt Distribution
 
Financial and Consumer Services Commission (New Brunswick)
Blanket Order No. 45-510 In the matter of exemptions from certain requirements in Form 45-106F1 Report of Exempt Distributions
 
Government of Newfoundland and Labrador, Office of the Superintendent of Securities
Blanket Order Number 100
 
Government of the Northwest Territories, Office of the Superintendent of Securities
Blanket Order 45-503 Exemptions from certain requirements in Form 45-106F1 Report of Exempt Distribution
 
Nova Scotia Securities Commission
Blanket Order No. 45-527
 
Government of Nunavut, Department of Justice
Blanket Order 45-503 Exemptions from certain requirements in Form 45-106F1 Report of Exempt Distribution
 
Prince Edward Island Superintendent of Securities
Blanket Order 45-512 Exemptions from certain requirements in Form 45-106F1 Report of Exempt Distribution
 
Autorité des marchés financiers
Décision no 2016-PDG-0099 Décision générale relative à la dispense pour certains émetteurs étrangers de fournir certains renseignements exigés dans la déclaration de placement avec dispense établie en la forme prévue à l'Annexe 45-106A1 du Règlement 45-106 sur les dispenses de prospectus
 
Financial and Consumer Affairs Authority of Saskatchewan
General Order 45-502 Exemptions from certain requirements in Form 45-106F1 Report of Exempt Distribution
 
Office of the Yukon Superintendent of Securities
Superintendent Order 2016/02 Exemptions from certain requirements in Form 45-106F1 Report of Exempt Distribution