Securities Law & Instruments

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions and Multilateral Instrument 11-102 Passport System -- reporting insiders parties to automatic securities disposition plans -- relief granted from section 3.3 of NI 55-104 and subsection 107(2) of the Securities Act (Ontario), provided that reporting insiders file reports with respect to dispositions under the plans during the year by March 31 of the next calendar year.

Applicable Legislative Provisions

Securities Act (Ontario), s. 107(2).

National Instrument 55-104 Insider Reporting Requirements and Exemptions, s. 3.3.

Citation: Solium Capital Inc., Re, 2014 ABASC 19

January 17, 2014

IN THE MATTER OF THE SECURITIES LEGISLATION OF ALBERTA AND ONTARIO (the Jurisdictions)

AND

IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF SOLIUM CAPITAL INC. (Solium), MARCOS A. LOPEZ (Lopez), BRIAN N. CRAIG (Craig) AND JEFFREY F. ENGLISH (English) (collectively, the Filers)

DECISION

Background

The securities regulatory authority or regulator in each of the Jurisdictions (the Decision Maker) has received an application from the Filers for a decision (the Exemption Sought) under the securities legislation (the Legislation) of the Jurisdictions exempting Lopez, Craig and English from the requirement in Section 3.3 of National Instrument 55-104 Insider Reporting Requirements and Exemptions (NI 55-104) and Subsection 107(2) of the Securities Act (Ontario) (the Ontario Act) to file an insider report within five days following the disposition of securities under their respective automatic securities disposition plans.

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a dual application):

(a) the Alberta Securities Commission is the principal regulator for this application;

(b) the Filers have provided notice that Subsection 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in British Columbia, Saskatchewan, Manitoba, New Brunswick, Nova Scotia, Newfoundland and Prince Edward Island; and

(c) this decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.

Interpretation

Terms defined in National Instrument 14-101 Definitions, MI 11-102 or NI 55-104 have the same meaning if used in this decision, unless otherwise defined herein.

Representations

This decision is based on the following facts represented by the Filers:

Solium

1. Solium is a corporation existing under the laws of the Province of Alberta and is a reporting issuer under the securities legislation of Alberta, British Columbia, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Newfoundland and Prince Edward Island. Solium is not in default of securities legislation in any jurisdiction.

2. The head office of Solium is located in Calgary, Alberta.

3. The authorized share capital of Solium consists of an unlimited number of common shares (Common Shares) and an unlimited number of preferred shares, issuable in series. As at December 9, 2013, Solium had 46,892,929 Common Shares and no preferred shares issued and outstanding.

4. The Common Shares are listed and posted for trading on the Toronto Stock Exchange under the symbol "SUM".

Lopez

5. Lopez is a Managing Director of Solium and is a reporting insider. Lopez is not in default of securities legislation in any jurisdiction.

6. As at December 9, 2013, Lopez was the beneficial owner of 1,897,063 Common Shares (representing approximately 4.0% of the then outstanding Common Shares).

7. Lopez wishes to sell 300,000 Common Shares pursuant to the LASDP (as defined below) to further diversify his portfolio.

Lopez's Automatic Securities Disposition Plan

8. FirstEnergy Capital Corp. (the LASDP Administrator), Solium and Lopez entered into an automatic securities disposition plan (the LASDP) dated effective September 3, 2013 to facilitate the automatic sale of up to 300,000 Common Shares beneficially owned by Lopez and which have been deposited into an account managed by the LASDP Administrator, managed in accordance with the trading parameters and other instructions set out in the LASDP.

9. Lopez can only make changes to the trading parameters and other instructions set out in the LASDP if all of the following conditions are met:

(a) Lopez has obtained the prior written consent of the LASDP Administrator and Solium;

(b) Lopez has provided notice to the public of the proposed change by describing it in a filing on the System for Electronic Disclosure by Insiders (SEDI) or in a news release;

(c) Lopez has represented to the LASDP Administrator that a blackout period is not currently in effect and that he is not aware of any material non-public information about Solium or the securities of Solium and has no knowledge of a material fact or material change with respect to Solium or any securities of Solium (including the Common Shares) that has not been generally disclosed; and

(d) such amendment or modification is made in good faith and not as part of a plan or scheme to evade the prohibitions of Section 147 of the Securities Act (Alberta) (the Alberta Act), Section 76 of the Ontario Act or comparable prohibitions in other securities legislation.

10. The LASDP Administrator is a securities broker which is at arm's length to Solium and Lopez.

11. The LASDP Administrator has been appointed as an independent broker to effect the sales of the Common Shares pursuant to the terms and conditions of the LASDP. The dispositions under the LASDP will be effected by the LASDP Administrator in accordance with the pre-determined instructions as to the number and dollar value of the Common Shares to be sold, and other relevant information.

12. Subject to the restrictions set forth in the LASDP, the LASDP Administrator shall execute the trades in such a way as to attempt to minimize the negative price impact on the market and to attempt to maximize the prices obtained for the Common Shares sold.

13. Except to set trading parameters in the manner described in the representations in this decision, Lopez does not have the authority to make investment decisions or influence or control any disposition effected by the LASDP Administrator pursuant to the LASDP and the LASDP Administrator and Lopez will not consult regarding any disposition.

14. Lopez will not disclose to the LASDP Administrator any information concerning Solium that might influence the execution of any disposition under the LASDP.

15. The LASDP included a waiting period of 30 days between the date of adoption of the LASDP and the date that the first disposition could be made under the LASDP.

16. The LASDP has been structured to comply with applicable securities legislation and guidance, including Paragraph 147(5)(c) of the Alberta Act, Paragraph 175(2)(b) of the General Regulation under the Ontario Act and Ontario Securities Commission Staff Notice 55-701 Automatic Securities Disposition Plans and Automatic Securities Purchase Plans (OSC Notice 55-701).

17. At the time of execution of, and entering into the LASDP, Lopez represented that he was not in possession of material undisclosed information about Solium and that he was entering into the LASDP in good faith and not as part of a plan or scheme to evade the prohibitions of Section 147 of the Alberta Act, Section 76 of the Ontario Act or any other applicable securities laws.

18. The Common Shares are not subject to any liens, security interests or other impediments to transfer (except for limitations imposed by any applicable laws).

19. The LASDP will automatically terminate on the earliest to occur of:

(a) September 3, 2015;

(b) the date on which 300,000 Common Shares have been disposed of pursuant to the LASDP;

(c) the date on which more than $1,250,000 in gross proceeds has been realised from the sale of Common Shares pursuant to the LASDP;

(d) the date Solium terminates the LASDP, which shall be the date three business days after Solium has done both of the following:

(i) given written notice to the LASDP Administrator of the termination of the LASDP; and

(ii) publicly disclosed the termination by news release;

(e) the date Lopez terminates the LASDP, which shall be the date three business days after Lopez has done all of the following:

(i) given written notice to the LASDP Administrator of the termination of the LASDP;

(ii) represented in writing to the LASDP Administrator that he is not aware of any material fact or material change with respect to Solium or any securities of Solium that has not been generally disclosed; and

(iii) publicly disclosed the termination by doing either of the following:

A. filing a report on SEDI disclosing the effective date of the termination of the LASDP; or

B. issuing a news release disclosing the termination of the LASDP;

(f) the date on which the LASDP Administrator receives notice of or otherwise becomes aware of any one of the following:

(i) Solium having entered into a definitive agreement pursuant to which either of the following applies:

A. Solium will be subject to a take-over bid, tender or exchange offer with respect to the Common Shares; or

B. Solium will be subject to an arrangement, merger, acquisition, reorganization, recapitalization or comparable transaction affecting the securities of Solium as a result of which the Common Shares are to be exchanged or converted into shares of another company;

(ii) the death or mental incapacity of Lopez; or

(iii) the commencement or impending commencement of any proceedings in respect of or triggered by Lopez's bankruptcy or insolvency; and

(g) the date the LASDP Administrator terminates the LASDP after having received notice (an LASDP Restriction Notice) of any legal, contractual or regulatory restriction applicable to Lopez, including without limitation, any restriction related to a take-over bid, tender or exchange offer, an arrangement, merger or acquisition, reorganization or a stock offering requiring lock-up, that would prohibit dispositions pursuant to the LASDP.

20. Any LASDP Restriction Notice given by Lopez or Solium will be given in good faith and not as part of a plan or scheme to evade the prohibitions of Section 147 of the Alberta Act, Section 76 of the Ontario Act or comparable prohibitions in other securities legislation.

21. Lopez will not terminate the LASDP with knowledge of a material fact or material change that has not been generally disclosed.

Craig

22. Craig is the Executive Chairman and Managing Director of Solium and is a reporting insider. Craig is not in default of securities legislation in any jurisdiction.

23. As at December 9, 2013, Craig was the beneficial owner of 3,602,672 Common Shares (representing approximately 7.7% of the then outstanding Common Shares).

24. Craig wishes to sell 600,000 Common Shares pursuant to the CASDP (as defined below) to further diversify his portfolio.

Craig's Automatic Securities Disposition Plan

25. Scotia Capital Inc. (the CASDP Administrator), Solium and Craig entered into an automatic securities disposition plan (the CASDP) dated effective September 3, 2013 to facilitate the automatic sale of up to 600,000 Common Shares beneficially owned by Craig and which have been deposited into an account managed by the CASDP Administrator, managed in accordance with the trading parameters and other instructions set out in the CASDP.

26. Craig can only make changes to the trading parameters and other instructions set out in the CASDP if all of the following conditions are met:

(a) Craig has obtained the prior written consent of the CASDP Administrator and Solium;

(b) Craig has provided notice to the public of the proposed change by describing it in a filing on SEDI or in a news release;

(c) Craig has represented to the CASDP Administrator that a blackout period is not currently in effect and that he is not aware of any material non-public information about Solium or the securities of Solium and has no knowledge of a material fact or material change with respect to Solium or any securities of Solium (including the Common Shares) that has not been generally disclosed; and

(d) such amendment or modification is made in good faith and not as part of a plan or scheme to evade the prohibitions of Section 147 of the Alberta Act, Section 76 of the Ontario Act or comparable prohibitions in other securities legislation.

27. The CASDP Administrator is a securities broker which is at arm's length to Solium and Craig.

28. The CASDP Administrator has been appointed as an independent broker to effect the sales of the Common Shares pursuant to the terms and conditions of the CASDP. The dispositions under the CASDP will be effected by the CASDP Administrator in accordance with the pre-determined instructions as to the number and dollar value of the Common Shares to be sold, and other relevant information.

29. Subject to the restrictions set forth in the CASDP, the CASDP Administrator shall execute the trades in such a way as to attempt to minimize the negative price impact on the market and to attempt to maximize the prices obtained for the Common Shares sold.

30. Except to set trading parameters in the manner described in the representations in this decision, Craig does not have the authority to make investment decisions or influence or control any disposition effected by the CASDP Administrator pursuant to the CASDP and the CASDP Administrator and Craig will not consult regarding any disposition.

31. Craig will not disclose to the CASDP Administrator any information concerning Solium that might influence the execution of any disposition under the CASDP.

32. The CASDP included a waiting period of 30 days between the date of adoption of the CASDP and the date that the first disposition could be made under the CASDP.

33. The CASDP has been structured to comply with applicable securities legislation and guidance, including Paragraph 147(5)(c) of the Alberta Act, Paragraph 175(2)(b) of the General Regulation under the Ontario Act and OSC Notice 55-701.

34. At the time of execution of, and entering into the CASDP, Craig represented that he was not in possession of material undisclosed information about Solium and that he was entering into the CASDP in good faith and not as part of a plan or scheme to evade the prohibitions of Section 147 of the Alberta Act, Section 76 of the Ontario Act or any other applicable securities laws.

35. The Common Shares are not subject to any liens, security interests or other impediments to transfer (except for limitations imposed by any applicable laws).

36. The CASDP will automatically terminate on the earliest to occur of:

(a) September 3, 2015;

(b) the date on which 600,000 Common Shares have been disposed of pursuant to the CASDP;

(c) the date Solium terminates the CASDP which shall be the date three business days after Solium has done both of the following:

(i) given written notice to the CASDP Administrator of the termination of the LASDP; and

(ii) publicly disclosed the termination by news release;

(d) the date Craig terminates the CASDP, which shall be the date three business days after Craig has done all of the following:

(i) given written notice to the CASDP Administrator of the termination of the CASDP;

(ii) represented in writing to the CASDP Administrator that he is not aware of any material fact or material change with respect to Solium or any securities of Solium that has not been generally disclosed; and

(iii) publicly disclosed the termination by doing either of the following:

A. filing a report on SEDI disclosing the effective date of the termination of the CASDP; or

B. issuing a news release disclosing the termination of the CASDP;

(e) the date on which the CASDP Administrator receives notice of or otherwise becomes aware of any one of the following:

(i) Solium having entered into a definitive agreement pursuant to which either of the following applies:

A. Solium will be subject to a take-over bid, tender or exchange offer with respect to the Common Shares; or

B. Solium will be subject to an arrangement, merger, acquisition, reorganization, recapitalization or comparable transaction affecting the securities of Solium as a result of which the Common Shares are to be exchanged or converted into shares of another company;

(ii) the death or mental incapacity of Craig; and

(iii) the commencement or impending commencement of any proceedings in respect of or triggered by Craig's bankruptcy or insolvency; and

(f) the date the CASDP Administrator terminates the CASDP after having received notice (a CASDP Restriction Notice) of any legal, contractual or regulatory restriction applicable to Craig, including without limitation, any restriction related to a take-over bid, tender or exchange offer, an arrangement, merger or acquisition, reorganization or a stock offering requiring lock-up, that would prohibit dispositions pursuant to the CASDP.

37. Any CASDP Restriction Notice given by Craig or Solium will be given in good faith and not as part of a plan or scheme to evade the prohibitions of Section 147 of the Alberta Act, Section 76 of the Ontario Act or comparable prohibitions in other securities legislation.

38. Craig will not terminate the CASDP with knowledge of a material fact or material change that has not been generally disclosed.

English

39. English is a Director of Solium and is a reporting insider. English is not in default of securities legislation in any jurisdiction.

40. As at December 9, 2013, English was the beneficial owner of 580,317 Common Shares (representing approximately 1.1% of the then outstanding Common Shares).

41. English wishes to sell 200,000 Common Shares pursuant to the EASDP (as defined below) to further diversify his portfolio.

English's Automatic Securities Disposition Plan

42. FirstEnergy Capital Corp. (the EASDP Administrator), Solium and English entered into an automatic securities disposition plan (the EASDP) dated effective September 26, 2013 to facilitate the automatic sale of up to 200,000 Common Shares beneficially owned by English and which have been deposited into an account managed by the EASDP Administrator, managed in accordance with the trading parameters and other instructions set out in the EASDP.

43. English can only make changes to the trading parameters and other instructions set out in the EASDP if all of the following conditions are met:

(a) English has obtained the prior written consent of the EASDP Administrator and Solium;

(b) English has provided notice to the public of the proposed change by describing it in a filing on SEDI or in a news release;

(c) English has represented to the EASDP Administrator that a blackout period is not currently in effect and that he is not aware of any material non-public information about Solium or the securities of Solium and has no knowledge of a material fact or material change with respect to Solium or any securities of Solium (including the Common Shares) that has not been generally disclosed; and

(d) such amendment or modification is made in good faith and not as part of a plan or scheme to evade the prohibitions of Section 147 of the Alberta Act, Section 76 of the Ontario Act or comparable prohibitions in other securities legislation.

44. The EASDP Administrator is a securities broker which is at arm's length to Solium and English.

45. The EASDP Administrator has been appointed as an independent broker to effect the sales of the Common Shares pursuant to the terms and conditions of the EASDP. The dispositions under the EASDP will be effected by the EASDP Administrator in accordance with the pre-determined instructions as to the number and dollar value of the Common Shares to be sold, and other relevant information.

46. Subject to the restrictions set forth in the EASDP, the EASDP Administrator shall execute the trades in such a way as to attempt to minimize the negative price impact on the market and to attempt to maximize the prices obtained for the Common Shares sold.

47. Except to set trading parameters in the manner described in the representations in this decision, English does not have the authority to make investment decisions or influence or control any disposition effected by the EASDP Administrator pursuant to the EASDP and the EASDP Administrator and English will not consult regarding any disposition.

48. English will not disclose to the EASDP Administrator any information concerning Solium that might influence the execution of any disposition under the EASDP.

49. The EASDP included a waiting period of 30 days between the date of adoption of the EASDP and the date that the first disposition could be made under the EASDP.

50. The EASDP has been structured to comply with applicable securities legislation and guidance, including Paragraph 147(5)(c) of the Alberta Act, Paragraph 175(2)(b) of the General Regulation under the Ontario Act and OSC Notice 55-701.

51. At the time of execution of, and entering into the EASDP, English represented that he was not in possession of material undisclosed information about Solium and that he was entering into the EASDP in good faith and not as part of a plan or scheme to evade the prohibitions of Section 147 of the Alberta Act, Section 76 of the Ontario Act or any other applicable securities laws.

52. The Common Shares are not subject to any liens, security interests or other impediments to transfer (except for limitations imposed by any applicable laws).

53. The EASDP will automatically terminate on the earliest to occur of:

(a) September 26, 2015;

(b) the date on which 200,000 Common Shares have been disposed of pursuant to the EASDP;

(c) the date Solium terminates the EASDP, which shall be the date three business days after Solium has done both of the following:

(i) given written notice to the EASDP Administrator of the termination of the EASDP; and

(ii) publicly disclosed the termination by news release;

(d) the date English terminates the EASDP, which shall be the date three business days after English has done all of the following:

(i) given written notice to the EASDP Administrator of the termination of the EASDP;

(ii) represented in writing to the EASDP Administrator that he is not aware of any material fact or material change with respect to Solium or any securities of Solium that has not been generally disclosed; and

(iii) publicly disclosed the termination by doing either of the following:

A. filing a report on SEDI disclosing the effective date of the termination of the EASDP; or

B. issuing a news release disclosing the termination of the EASDP;

(e) the date on which the EASDP Administrator receives notice of or otherwise becomes aware of any one of the following:

(i) Solium having entered into a definitive agreement pursuant to which either of the following applies:

A. Solium will be subject to a take-over bid, tender or exchange offer with respect to the Common Shares; or

B. Solium will be subject to an arrangement, merger, acquisition, reorganization, recapitalization or comparable transaction affecting the securities of Solium as a result of which the Common Shares are to be exchanged or converted into shares of another company;

(ii) the death or mental incapacity of English; and

(iii) the commencement or impending commencement of any proceedings in respect of or triggered by English's bankruptcy or insolvency; and

(f) the date the EASDP Administrator terminates the EASDP after having received notice (an EASDP Restriction Notice) of any legal, contractual or regulatory restriction applicable to English, including without limitation, any restriction related to a take-over bid, tender or exchange offer, an arrangement, merger or acquisition, reorganization or a stock offering requiring lock-up, that would prohibit dispositions pursuant to the EASDP.

54. Any EASDP Restriction Notice given by English or Solium will be given in good faith and not as part of a plan or scheme to evade the prohibitions of Section 147 of the Alberta Act, Section 76 of the Ontario Act or comparable prohibitions in other securities legislation.

55. English will not terminate the EASDP with knowledge of a material fact or material change that has not been generally disclosed.

Decision

Each of the Decision Makers is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.

The decision of the Decision Makers under the Legislation is that:

(a) the decision dated October 25, 2013 cited as Re Solium Capital Inc., 2013 ABASC 482 is hereby revoked;

(b) the Exemption Sought is granted with respect to Lopez, provided that Lopez shall file a report through SEDI, by March 31 of each calendar year, of all dispositions under the LASDP during the prior calendar year not previously disclosed in a SEDI filing, disclosing either:

(i) each disposition on a transaction-by-transaction basis; or

(ii) all dispositions as a single transaction using the average unit price of the securities;

(c) the Exemption Sought is granted with respect to Craig, provided that Craig shall file a report through SEDI, by March 31 of each calendar year, of all dispositions under the CASDP during the prior calendar year not previously disclosed in a SEDI filing, disclosing either:

(i) each disposition on a transaction-by-transaction basis; or

(ii) all dispositions as a single transaction using the average unit price of the securities; and

(d) the Exemption Sought is granted with respect to English, provided that English shall file a report through SEDI, by March 31 of each calendar year, of all dispositions under the EASDP during the prior calendar year not previously disclosed in a SEDI filing, disclosing either:

(i) each disposition on a transaction-by-transaction basis; or

(ii) all dispositions as a single transaction using the average unit price of the securities.

"Tom Graham, CA"
Director, Corporate Finance