National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Application by U.S. issuer for a decision that it is not a reporting issuer -- The issuer has de minimis market presence in Canada -- the issuer satisfies the criteria set out in CSA Staff Notice 12-307 Applications for a Decision that an Issuer is not a Reporting Issue -- 2% de minimis threshold for securities met -- Requested relief granted.
Applicable Legislative Provisions
Securities Act, R.S.O. 1990, c. S.5, as am., s. 1(10)(a)(ii).
Citation: Re Triangle Petroleum Corporation, 2014 ABASC 87
March 7, 2014
IN THE MATTER OF THE SECURITIES LEGISLATION OF BRITISH COLUMBIA, ALBERTA AND ONTARIO (the Jurisdictions) AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF TRIANGLE PETROLEUM CORPORATION (the Filer)
The securities regulatory authority or regulator in each of the Jurisdictions (Decision Maker) has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the Legislation) that the Filer be deemed to have ceased to be a reporting issuer under the Legislation (the Exemptive Relief Sought).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a coordinated review application):
(a) the Alberta Securities Commission is the principal regulator for this application; and
(b) this decision is the decision of the principal regulator and evidences the decision of each other Decision Maker.
Terms defined in National Instrument 14-101 Definitions have the same meaning if used in this decision, unless otherwise defined herein.
This decision is based on the following facts represented by the Filer:
1. The Filer is a corporation incorporated under the laws of Delaware. The Filer's head office is located at 1200 17th Street, Suite 2600 Denver, Colorado 80202.
2. The Filer is a reporting issuer in each of the Jurisdictions and is not in default of the securities legislation in any jurisdiction in Canada.
3. The only securities of the Filer held by the public are its shares of common stock. In order to determine the number of shares of common stock of the Filer beneficially owned directly by persons with addresses in Canada, the Filer obtained and reviewed:
(a) a registered shareholders list from Continental Stock Transfer & Trust Company, the registrar and transfer agent of the Filer;
(b) a Canadian geographical survey conducted by Broadridge Financial Solutions Inc. (Broadridge), which included a detailed breakdown of brokers and banks that responded to the survey;
(c) a Security Position Report from The Depository Trust Company (DTC) against which the Broadridge Canadian geographical survey was compared; and
(d) reports from INVeSHARE Inc., ProxyTrust, Mediant Communications LLC and Foliofn Inc. confirming that no shares of common stock were beneficially held by Canadians.
Following such review, where the Filer noted discrepancies between the Broadridge Canadian geographical survey and the DTC Security Position Report, it followed up with all DTC listed brokers/banks with Canadian addresses and other brokers/banks with significant discrepancies in order to determine whether the unreported shares in the Broadridge Canadian geographical survey were beneficially held by Canadians. All shares held by CDS Inc. in the DTC report were assumed to be beneficially held by Canadians, as a result no reports were requested from CDS Inc. as the results of any such reports would not change the conclusions noted below. All other brokers/banks with Canadian addresses provided the Filer with Canadian beneficial holding information for their unreported shares. While most non-Canadian brokers/banks contacted by the Filer confirmed that no shares were beneficially held by Canadians, certain brokers/banks with US addresses were unwilling or unable to respond to the Filer's inquiries due to their internal policies respecting the disclosure of such information. Consequently, as no contrary information is available, the Filer has assumed that those US brokers/banks that were unwilling or unable to respond hold shares of common stock only on behalf of US beneficial holders.
Based on the information and diligent inquiries set out above:
(i) as at October 3, 2013, the total amount of common stock held by a total of 472 residents of Canada was 1,523,399 shares (representing 1.78% of the total number of outstanding shares worldwide), and such 472 Canadian resident stockholders represents approximately 1.32% of the total number of 35,759 stockholders of the Filer;
(ii) on a fully diluted basis to account for an in-the-money convertible note held by a US investor (convertible into 16,094,243 shares), only 1.50% of outstanding shares are held by residents of Canada; and
(iii) residents of Canada do not, directly or indirectly: (a) beneficially own more than 2% of any class or series of outstanding securities of the Filer worldwide; or (b) comprise more than 2% of the total number of securityholders of the Filer worldwide.
4. The Filer files continuous disclosure reports under U.S. securities law and is listed on the NYSE MKT.
5. None of the Filer's securities are listed, traded or quoted on a marketplace in Canada as defined in National Instrument 21-101 Marketplace Operation, and the Filer does not intend to have its securities listed, traded or quoted on such a marketplace in Canada.
6. In the last 12 months the Filer has not taken any steps that indicate there is a market for its securities in Canada and the Filer has no intention to seek financing by way of a prospectus offering or private placement of its securities in Canada.
7. The Filer has issued a news release stating that it has made application for a decision that it is not a reporting issuer in Canada and that, if that decision is made, the Filer will no longer be a reporting issuer in any jurisdiction in Canada.
8. The Filer undertakes to concurrently deliver to its Canadian securityholders, all disclosure the Filer would be required under U.S. securities law or exchange requirements to deliver to U.S. resident securityholders.
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 the Exemptive Relief Sought is granted.