NEO EXCHANGE INC.
AMENDMENTS RESPECTING FOREIGN-LISTED STRUCUTRED PRODUCT NOTES
NOTICE OF COMMISSION APPROVAL
In accordance with the Process for the Review and Approval of Rules and the Information Contained in Form 21-101F1 and the Exhibits Thereto, Neo Exchange Inc. (“NEO Exchange”) has adopted and the Ontario Securities Commission has approved amendments to NEO Exchange’s Form 21-101F1 (the “Amendments”). The Amendments comprise changes to reflect that NEO Exchange may now trade foreign-listed structured product notes (“Foreign-Listed Structured Product Notes”) on an unlisted basis.
Approval of the Amendments is subject to the following conditions:
1. NEO Exchange will only make notes available for trading consistent with Phase 1, as described in the Notice of the Amendments (described below), with the exception of the alternative of the notes’ availability upon reaching 10% of their life-time, which has been removed. In addition, these notes will not include single stock notes.
2. NEO Exchange will only make Foreign-Listed Structured Product Notes available for trading that would not be considered novel if a Canadian bank offered a similar product, unless such notes are submitted to OSC and AMF staff for their review in advance. Otherwise, the notes must be similar to those currently offered by Canadian banks. If NEO is uncertain whether a particular note would be considered novel in Canada, it will consult with OSC and AMF staff first before making the note available for trading.
3. NEO Exchange will report regularly to OSC and AMF staff regarding trading volumes relative to those of the foreign listing exchange and total notes issued and will include a high level description of the types of notes that appear most popular. NEO will also provide any other information requested by OSC staff to assist in determining to what extent an issuer of Foreign-Listed Structured Product Notes may be active in our jurisdiction beyond its Foreign-Listed Structured Product Notes just being available for secondary market trading.
4. NEO will not trade any Foreign-Listed Structured Product Notes that are in distribution in Canada unless the issuer has filed a prospectus and obtained a receipt from one of the Canadian securities regulatory authorities.
5. NEO Exchange will cease making any new Foreign-Listed Structured Product Notes available for trading upon request by OSC staff.
6. NEO Exchange will cease trading any existing Foreign-Listed Structured Product Notes, due to an investor protection concern, based on a timeline and approach agreed between NEO Exchange and OSC staff.
Notice of the Amendments and a request for comments was published on August 9, 2018. Two comments were received. NEO Exchange’s summary of the comments and its responses can be found at www.osc.gov.on.ca.
The Amendments are expected to be effective in the first quarter of 2020.