Securities Law & Instruments



COMPANION POLICY 71-101CP TO NATIONAL INSTRUMENT 71-101
THE MULTIJURISDICTIONAL DISCLOSURE SYSTEM

TABLE OF CONTENTS

PART 1
INTRODUCTION AND PURPOSE

PART 2 OVERVIEW OF THE MJDS
2.1 Purpose
2.2 Application
(1) Offerings
(2) Rights Offerings, Bids and Business Combinations
2.3 Regulatory Review
2.4 Liability Unaffected2.5 Compliance with U.S. Law
2.6 The U.S. Multijurisdictional Disclosure System

PART 3 NI 71-101

3.1 Application of NI 71-101 in each Jurisdiction

3.2 MJDS Prospectus Distributions of Securities of U.S. Issuers
(1) Election to Use the MJDS
(2) General
(3) Public Interest Jurisdiction
(4) Form and Content of MJDS Prospectus
(5) Format of MJDS Prospectus
(6) Reconciliation of Financial Statements
(7) Underwriters' Certificate in Rights Offerings
(8) Distributions made in Quebec
(9) Modification or Amendment
(10) Advertising
(11) Review Procedures
(12) Receipt Procedures
(13) Rule 415 Offerings and Rule 430A Offerings
(14) Certification for Rule 415 Offerings
(15) Disclosure of Interest of Underwriter
(16) Conflicts of Interest
(17) Trust Indenture Requirements
(18) Fees

3.3 Registration Requirements for Rights Offerings

3.4 Bids for Securities of U.S. Issuers
(1) General
(2) Alternative Exemptions
(3) Certain Continuing Requirements
(a) Early Warning
(b) Going Private Transactions
(c) Pre-bid Integration
(d) Valuation Requirements in Issuer and Insider Bids
(e) Public Interest Jurisdiction
(4) Directors' and Individual Director's and Officer's Circulars
(5) Bids Made in Quebec
(6) Notices of Variation and Notices of Change
(7) Fees

3.5 Business Combination

3.6 Continuous Disclosure, Proxies and Proxy Solicitation,Insider Reporting and Shareholder Communication
(1) General
(2) Shareholder Communication

PART 4 CERTAIN OFFERINGS BY CANADIAN ISSUERSUNDER THE U.S. MULTIJURISDICTIONAL DISCLOSURE SYSTEM
4.1 U.S. Trust Indenture Exemption

4.2 Prospectus Filing in Canada

4.3 Filings in Saskatchewan, Manitoba, Ontario and Nova Scotia For U.S. Only Distributions
(1) Filing Procedures
(2) Confirmation of Review Jurisdiction
(3) Review Procedures
(4) Notification of Clearance Procedures
(5) Filing of Amendments to Registration Statement

 

PART 1 INTRODUCTION AND PURPOSE

The multijurisdictional disclosure system is a joint initiative by the CSA and the SEC to reduce duplicative regulation in cross-border offerings, issuer bids,take-over bids, business combinations and continuous disclosure and other filings.

The multijurisdictional disclosure system (the "MJDS") was originally implemented in Canada in 1991 by the CSA through National Policy Statement No. 45("NP 45"). NP 45 was replaced by National Instrument 71-101 ("NI 71-101") which implements in each Canadian jurisdiction those portions of NP 45 whichare of a legislative nature. Companion Policy 71-101CP to NI 71-101 ("this Policy") provides other information including statements relating to the exercise ofdiscretion by the Canadian securities regulatory authorities under NI 71-101 and the manner in which its provisions are intended to be interpreted or applied bythem.

NI 71-101 sets out the substantive requirements of the MJDS which apply in all jurisdictions. Each jurisdiction has implemented NI 71-101 by one or moreinstruments forming part of the law of that jurisdiction ("the implementing law of a jurisdiction"). The implementing law of a jurisdiction can take the form of aregulation, rule, ruling or order. Form 71-101F1 sets out the forms of submission to jurisdiction and appointment of agent for service of process.

Ontario, Alberta, British Columbia and Nova Scotia have adopted NI 71-101 by rule. Saskatchewan has adopted it by regulation. All other jurisdictions haveadopted NI 71-101 by Policy Statement. To the extent that any provision of this Policy is inconsistent or conflicts with the applicable provisions of NI 71-101 inthose jurisdictions that have adopted NI 71-101 by Policy Statement, the provisions of NI 71-101 prevail over the provisions of this Policy.

Source: New, except for paragraph 1 which is derived from paragraph 1 of Part 1 of NP 45.

The multijurisdictional disclosure system is a joint initiative by the Canadian Securities Administrators and the Securities and Exchange Commission of theUnited States (the "SEC") to reduce duplicative regulation in cross-border offerings, issuer bids, take-over bids, business combinations and continuous disclosureand other filings.

Methodology: This introductory section provides background information regarding the origin of the MJDS and explains the manner in which NI 71-101 and thePolicy interrelate.

The reference to the multijurisdictional disclosure system in the first paragraph is to the Canadian and U.S. systems collectively. The defined term "MJDS" refersto the Canadian system.

PART 2 OVERVIEW OF THE MJDS

2.1 Purpose

The MJDS is intended to remove unnecessary obstacles to certain offerings of securities of U.S. issuers in Canada, to facilitate take-over and issuer bids andbusiness combinations involving securities of certain U.S. issuers and to facilitate compliance by U.S. issuers with proxy and continuous disclosure requirements,while ensuring that Canadian investors remain adequately protected.

2.2 Application

(1) Offerings

The MJDS permits public offerings of securities of U.S. issuers that meet the eligibility criteria specified in NI 71-101 to be made in Canada on the basis ofdisclosure documents prepared in accordance with U.S. federal securities law, with certain additional Canadian disclosure. A public offering of securities of aU.S. issuer may be made under the MJDS either in Canada and the United States or in Canada only.

(2) Rights Offerings, Bids and Business Combinations

The MJDS also reduces disincentives to the extension to Canadian securityholders of rights offerings by U.S. issuers by permitting such rights offerings to bemade in Canada on the basis of U.S. disclosure documents. Similarly, it facilitates the extension to Canadian securityholders of U.S. issuers of take-over bids,issuer bids and business combinations in the circumstances contemplated by Parts 12 and 13 of NI 71-101. The MJDS permits such transactions to be made inCanada generally in the same manner as in the United States and on the basis of U.S. disclosure documents.

2.3 Regulatory Review

Regulatory review of disclosure documents used under the MJDS for offerings made by a U.S. issuer both in Canada and the United States will be thatcustomary in the United States, with the SEC being responsible for carrying out the review. Whether the offering is made both in Canada and the United Statesor solely in Canada, Canadian securities regulatory authorities will monitor materials filed under the MJDS to check compliance with the specific disclosure andfiling requirements of NI 71-101. In addition, the substance of the disclosure documents will be reviewed in the unusual case if, through monitoring of thematerials or otherwise, the Canadian securities regulatory authorities have reason to believe that there may be a problem with a transaction or the relateddisclosure or other special circumstances exist.

2.4 Liability Unaffected

The MJDS does not change the liability provisions of Canadian securities legislation or the discretionary authority of Canadian securities regulatory authorities tohalt a distribution, remove an exemption, cease trade the related securities, or refuse to issue a receipt for a preliminary MJDS Prospectus or a MJDSProspectus. The securities regulatory authority or, in the case of Ontario, the regulator, may also grant exemptions from the requirements of NI 71-101 inspecific cases and also exercise its public interest jurisdiction if it determines that it is necessary to do so in order to preserve the integrity of the Canadian capitalmarkets.

2.5 Compliance with U.S. Law

Use of the MJDS is based on compliance with U.S. federal securities law. Thus, any person or company carrying out a transaction or filing a document in Canadaunder the MJDS must comply in full with all applicable U.S. requirements. However, a violation of a U.S. requirement will not automatically disqualify a personor company from using the MJDS with respect to a transaction or document. A person or company that violates a U.S. requirement, depending upon thecircumstances, may be considered to have violated an equivalent requirement of a jurisdiction in Canada with respect to a transaction or document.

2.6 The U.S. Multijurisdictional Disclosure System

(1) Concurrently with the adoption of NP 45, the SEC adopted rules, forms and schedules for the implementation of a similar multijurisdictional disclosuresystem in the United States. The U.S. system removes unnecessary impediments to certain offerings of securities of Canadian issuers in the United States andfacilitates the extension to U.S. securityholders of Canadian issuers of take-over bids, issuer bids and business combinations in the circumstances contemplatedby the U.S. system.

(2) The procedures to be followed in Canada when the U.S. system is used for certain offerings of securities of a Canadian issuer in the U.S. are set out in Part 4of this Policy.

Source: NP 45, Part 1

INTRODUCTION

The multijurisdictional disclosure system implemented in Canada pursuant to this Policy Statement (the "MJDS") is intended to remove unnecessary obstacles tocertain offerings of securities of U.S. issuers in Canada and to facilitate take-over and issuer bids and business combinations involving securities of U.S. issuershaving less than a specified percentage of Canadian securityholders, while ensuring that Canadian investors remain adequately protected.

The MJDS permits public offerings of securities of U.S. issuers that meet specified eligibility requirements to be made in Canada on the basis of disclosuredocuments prepared in accordance with the laws of the United States (with certain additional Canadian disclosure). A public offering of securities of a U.S.issuer may be made under the MJDS both in Canada and the United States or in Canada only.

The MJDS also reduces disincentives to the extension to Canadian securityholders of rights offerings by U.S. issuers by permitting such rights offerings to bemade in Canada on the basis of U.S. disclosure documents. Similarly, it facilitates the extension to Canadian securityholders of U.S. issuers of take-over bids,issuer bids and business combinations in the circumstances contemplated by this Policy Statement. The MJDS permits such transactions to be made in Canadagenerally in the same manner as in the United States and on the basis of U.S. disclosure documents.

Regulatory review of disclosure documents used under the MJDS for offerings made by a U.S. issuer both in Canada and the United States will be thatcustomary in the United States, with the SEC being responsible for carrying out the review. Canadian securities regulatory authorities will monitor materials filedunder the MJDS in order to check compliance with the specific disclosure and filing requirements of this Policy Statement. In addition, the substance of thedisclosure documents will be reviewed in the unusual case where, through monitoring of the materials or otherwise, the Canadian securities regulatory authoritieshave reason to believe that there may be a problem with a transaction or the related disclosure or other special circumstances exist.

The MJDS does not change the liability provisions of the securities laws of any province or territory or the discretionary authority of a Canadian securitiesregulatory authority to halt a distribution, remove an exemption, cease trade the related securities, or refuse to issue a receipt for a preliminary prospectus orprospectus. The Canadian securities regulatory authorities also will continue to exercise their public interest jurisdiction in specific cases where they determinethat it is necessary to do so in order to preserve the integrity of the Canadian capital markets.

Use of the MJDS is based on compliance with U.S. law. Thus, any person or company doing a transaction or filing a document in Canada under the MJDS mustcomply in full with all applicable U.S. requirements. However, violation of a U.S. requirement will not automatically disqualify a person or company from usingthe MJDS with respect to a transaction or document. Instead, a person or company that violates a U.S. requirement may, depending upon the circumstances, beconsidered to have violated an equivalent requirement of a Canadian jurisdiction with respect to the transaction or document.

Concurrently with the adoption of this Policy Statement, the SEC is adopting rules, forms and schedules for the implementation of a similar multijurisdictionaldisclosure system in the United States. The U.S. system removes unnecessary impediments to certain offerings of securities of Canadian issuers in the UnitedStates and facilitates the extension to U.S. securityholders of Canadian issuers of take-over bids, issuer bids and business combinations in the circumstancescontemplated by the U.S. system.

The procedures to be followed in Canada when the U.S. system is used for a U.S.-only offering of securities of a Canadian issuer are set out in Section 7.

Methodology: Part 2 incorporates the substance of Part 1 of NP 45, except for the first paragraph of Part 1 of NP 45 which has been adapted for use in Part 1 ofthis Policy. The first sentence has been amended to complete the introductory outline of the MJDS. There are only minor conforming changes to the text.

PART 3 NI 71-101

3.1 Application of NI 71-101 in each Jurisdiction

The MJDS provided for in NI 71-101 has been implemented in each jurisdiction. Except to the extent specifically provided in NI 71-101 or the implementinglaw of a jurisdiction, the securities legislation continues to apply. The securities legislation may prescribe additional requirements or procedures in relation to thetransactions and filings contemplated in NI 71-101.

3.2 MJDS Prospectus Distributions of Securities of U.S. Issuers

Source: NP 45, s.3.1, first 5 paragraphs

Methodology: This paragraph is new and emphasizes the availability of alternative procedures, including in particular exemptive relief pursuant to CSA #95-4which was developed after the introduction of NP 45.

(1) Election to Use the MJDS

The use of the MJDS to distribute securities of a U.S. issuer is elective. Persons or companies permitted to distribute securities of a U.S. issuer under NI 71-101may alternatively make those distributions in accordance with other provisions of the securities legislation, including, if the relevant eligibility criteria aresatisfied, case by case exemptive relief under CSA Notice #95-4 Proposed Foreign Issuer Prospectus and Continuous Disclosure System.

(2) General

NI 71-101 permits the following securities of a U.S. issuer to be distributed by prospectus in Canada, either by the issuer or by a selling securityholder, on thebasis of documentation prepared in accordance with U.S. federal securities law, with certain additional Canadian disclosure:

(a) non-convertible debt and non-convertible preferred shares that have an investment grade rating;

(b) convertible debt and preferred shares that have an investment grade rating and may not be converted for at least one year after issuance, if the issuer meets apublic float requirement;

(c) certain rights to acquire securities of the issuer; and

(d) other securities, if the issuer meets a public float requirement.

The MJDS may also be used for securities exchange bids and business combinations, in each case as described below.

The purpose of the public float requirement is to single out issuers whose size is such that (i) information about them is publicly disseminated and (ii) they have asignificant market following. As a result, the marketplace can be expected to set efficiently a price for the securities of these issuers based on publicly availableinformation.

General - The MJDS permits the following types of securities of a U.S. issuer to be distributed by prospectus in Canada, either by the issuer or by a sellingsecurityholder, on the basis of documentation prepared in accordance with U.S. requirements (with certain additional Canadian disclosure):

(1) non-convertible debt and non-convertible preferred shares that have an Approved Rating;

(2) debt and preferred shares that have an Approved Rating and may not be converted for at least one year after issuance, if the issuer meets a substantialityrequirement;

(3) other securities, if the issuer meets a greater substantiality requirement; and

(4) certain rights to acquire securities of the issuer.

The availability of the MJDS for rights offerings is discussed in Section 3.4(1), for securities exchange bids in Section 4.1 and for business combinations inSection 5.1.

The purpose of the "substantiality" requirement is to single out issuers whose size is such that (i) information about them is publicly disseminated and (ii) theyhave a significant market following. As a result, the marketplace can be expected to set efficiently a price for the securities of these issuers based on publiclyavailable information.

It is anticipated that the National Instrument implementing the Foreign Issuer Prospectus and Continuous Disclosure will be published for comment afterpublication for comment of MJDS.

Methodology: The term "public float" has been substituted for the term "substantiality" as being more descriptive.

Non-convertible debt and preferred shares that have an investment grade rating are particularly appropriate for the MJDS because these securities trade primarilyon the basis of their yield and an assessment of creditworthiness by an independent rating organization. Typically, the four highest rating categories, within whichthere may be subcategories or gradations indicating relative standing, signify an investment grade rating by an independent rating organization. The investmentgrade ratings for certain rating organizations currently are:

Rating Preferred

Organization Debt Shares

CBRS Inc. A++, A+, A P-1+, P-1,

or B++ P-2 or P-3

Dominion AAA, AA, A Pfd-1, Pfd-2

Bond Rating or BBB or Pfd-3

Service Limited

Moody's Aaa, Aa, A "aaa", "aa", "a"

Investors or Baa or "baa"

Service, Inc.

Standard & AAA, AA, A or AAA, AA, A

Poor's BBB or BBB

Corporation

The lack of a public float requirement for offerings of these securities allows the MJDS to be used by issuers of securities having an investment grade rating, suchas finance subsidiaries, that access the market frequently, but do not meet the public float requirements. Debt and preferred shares that have an investment graderating and are not convertible into other securities for at least one year after issuance can be expected to trade primarily on the basis of their yield andindependent rating, but are also priced to some extent on the basis of the anticipated value of the security into which they are convertible. Thus, the MJDS isavailable for these securities on the basis of their investment grade rating, coupled with a public float requirement.

In the case of offerings of common shares or other securities other than non-convertible debt and preferred shares that have an investment grade rating, theMJDS is available upon satisfaction of a public float requirement. The MJDS generally may not be used for the offering of derivative securities, except in thecircumstances set out in subsection 3.3(2) of NI 71-101. Therefore, offerings of xxxxxxxxxxxxxxxxxxxxxx derivative securities such as stock index warrants,currency warrants and debt the interest on which is based upon the performance of a stock index may not be made under the MJDS.

Non-convertible debt and preferred shares that have an Approved Rating are particularly appropriate for the MJDS because these securities trade primarily onthe basis of their yield and an assessment of creditworthiness by an independent rating organization. The lack of a "substantiality" requirement for offerings ofthese securities reflects this and allows the MJDS to be used by issuers of securities having an Approved Rating, such as finance subsidiaries, that access thatmarket frequently, but do not meet the public float requirements. Debt and preferred shares that have an Approved Rating and are not convertible into othersecurities for at least one year after issuance can be expected to trade primarily on the basis of their yield and independent rating, but are also priced to someextent on the basis of the anticipated value of the security into which they are convertible. Thus, the MJDS is available for these securities on the basis of theirApproved Rating, coupled with a "substantiality" requirement.

In the case of offerings of common shares or other securities other than non-convertible debt and preferred shares that have an Approved Rating, the MJDS isavailable upon satisfaction of a "substantiality" requirement.

Methodology: The sixth paragraph of s.3.1 of NP 45 was deleted and replaced by a single sentence (at the end of the 5th paragraph of s.3.2(2)).

Subject to certain limitations, the MJDS permits U.S. issuers to make rights offerings by prospectus to existing securityholders in Canada on the basis ofdocumentation prepared in accordance with U.S. federal securities law, with certain additional Canadian disclosure. There is no public float requirement forrights offerings since existing securityholders can reasonably be expected to be familiar with the issuer and follow publicly available information concerning it.

The MJDS is available for rights offerings primarily to encourage fair treatment of Canadian investors. Previously, a U.S. issuer might not have extended rightsofferings to its securityholders in Canada due to the perceived costs and burdens of meeting Canadian regulatory requirements. The MJDS is intended to alter aU.S. issuer's cost-benefit analysis in favour of extending a rights offering to Canadian investors.

Source: NP 45, s.3.4(1)

General

Subject to certain limitations, the MJDS permits U.S. issuers to make rights offerings by prospectus to existing securityholders in Canada on the basis ofdocumentation prepared in accordance with U.S. requirements (with certain additional Canadian disclosure). There is no market value or public float requirementfor rights offerings since existing securityholders can reasonably be expected to be familiar with the issuer and follow publicly available information concerning it.

The MJDS is available for rights offerings primarily to encourage fair treatment of Canadian investors. Previously, a U.S. issuer might not have extended rightsofferings to its securityholders in Canada due to the perceived costs and burdens of meeting Canadian regulatory requirements. The MJDS is intended to alter aU.S. issuer's cost-benefit analysis in favour of extending a rights offering to Canadian investors.

Methodology: These two paragraphs from s.3.4(1) of NP 45 were moved into this introductory section as they complete the explanation provided in s.3.1 of NP45.

Offerings of debt and preferred shares that are not eligible to be made under paragraph 3.1(a) of NI 71-101, rights offerings that are not eligible to be madeunder paragraph 3.1(b) of NI 71-101, securities exchange bids that are not eligible to be made under section 12.3 of NI 71-101, and business combinations thatare not eligible to be made under section 13.1 may be made under paragraph 3.1(c) of NI 71-101, if subparagraphs 3.1(c)(i) and (ii) of NI 71-101 are satisfied.

Source: NP 45, s.3.3, last paragraph

Offerings of debt and preferred shares that are not eligible to be made pursuant to Section 3.2, rights offerings that are not eligible to be made pursuant toSection 3.4, securities exchange bids that are not eligible to be made pursuant to Section 4.2 and business combinations that are not eligible to be made pursuantto Section 5.2 may be made pursuant to this Section 3.3, provided that (1) and (2) above are satisfied.

(3) Public Interest Jurisdiction

All MJDS prospectus distributions remain subject to the fundamental principle that transactions must not be prejudicial to the public interest. The Canadiansecurities regulatory authorities will continue to exercise their public interest jurisdiction in specific cases if they determine that it is necessary to do so topreserve the integrity of the Canadian capital markets or to protect investors.

Source: NP 45, s.3.1, last paragraph

All prospectus offerings remain subject to the fundamental principle that transactions must not be prejudicial to the public interest. The applicable securitiesregulatory authorities will continue to exercise their public interest jurisdiction in specific cases where they determine that it is necessary to do so in order topreserve the integrity of the Canadian capital markets.

(4) Form and Content of MJDS Prospectus

A preliminary MJDS prospectus, MJDS prospectus or amendment or supplement to a preliminary MJDS prospectus or MJDS prospectus need not comply withthe prospectus form and content requirements of securities legislation applicable to distributions of securities made other than under NI 71-101 except asspecifically provided in NI 71-101 and the implementing law of a jurisdiction.

Each preliminary MJDS prospectus and MJDS prospectus is subject to requirements of securities legislation to provide full, true and plain disclosure of allmaterial facts relating to the securities proposed to be distributed and not to contain an untrue statement of a material fact or omit to state a material fact that isrequired to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made.

Source: NP 45, s.3.8(1), 2nd para., last sentence and 2nd sentence

The preliminary prospectus and prospectus used in Canada shall contain the additional information, legends and certificates required by this Policy Statement,shall provide full, true and plain disclosure of all material facts relating to the securities proposed to be distributed, and shall contain no untrue statement of amaterial fact or omit to state a material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances inwhich it was made.

(5) Format of MJDS Prospectus

A preliminary MJDS prospectus and a MJDS prospectus may be either a separate Canadian prospectus or a wrap-around prospectus that includes the U.S.prospectus filed with the SEC.

An issuer is required to prepare a preliminary MJDS prospectus for use in Canada even if the issuer does not prepare a preliminary prospectus for use in theUnited States.

Source: NP 45, s.3.8(1), 3rd sentence

The issuer may use either a separate Canadian prospectus or a wrap-around prospectus that includes the prospectus filed with the SEC.

Source: NP 45, s.3.8(1) 4th sentence

The issuer is required to prepare a preliminary prospectus for use in Canada even if the issuer does not prepare a preliminary prospectus for use in the UnitedStates

Methodology: Sentence was excluded from NI 71-101 as explanatory. Preserved in Policy to clarify alternatives.

(6) Reconciliation of Financial Statements

Reconciliation of financial statements to Canadian GAAP is not required for distributions made under NI 71-101 other than those made under paragraph 3.1(c)of NI 71-101.

Source: NP 45, s.3.10, last paragraph

Reconciliation of financial statements to Canadian GAAP or International Accounting Standards is not required for other offerings made under the MJDS.

Methodology: Reference to International Accounting Standards ("IAS") in the first paragraph of s.3.2(6) has been deleted by the CSA. The CSA concludedthat reconciliation to IAS is not sufficiently comparable to a reconciliation to Canadian GAAP at this stage in the development of IAS.

An issuer eligible under paragraph 3.1(c) of NI 71-101 to file a MJDS prospectus may apply to each applicable Canadian securities regulatory authority for anexemption permitting the issuer to reconcile financial statements in the MJDS prospectus to International Accounting Standards in lieu of Canadian GAAP.

U.S. federal securities law requires that annual financial statements be accompanied by an auditor's report prepared in accordance with U.S. generally acceptedauditing standards. Therefore, a MJDS prospectus which by definition, includes a U.S. prospectus, would include audited financial statements with a reportprepared in accordance with U.S. generally accepted auditing standards. Unlike section 4.6 of NI 71-101 which imposes a requirement to reconcile financialstatements to Canadian GAAP, no additional auditing standard requirement is imposed by NI 71-101.

Source: New

(7) Underwriters' Certificate in Rights Offerings

A preliminary MJDS prospectus and a MJDS prospectus used for a distribution of rights under NI 71-101 need not contain an underwriters' certificate if there isno soliciting activity in the local jurisdiction other than the dissemination by the issuer of the rights and the preliminary MJDS prospectus and MJDS prospectus,and securities acquired under a standby underwriting commitment by a dealer to purchase securities unsubscribed for by other securityholders are not resold inthe local jurisdiction.

Source: NP45, s.3.11(4)

(4) Rights Offerings

A rights offering prospectus used under Section 3.4 need not contain an underwriters' certificate, provided that there is no soliciting activity in Canada other thanthe dissemination by the issuer of the rights and the prospectus and any securities acquired under a standby underwriting arrangement are not resold in Canada.

Methodology: Amended to make conforming changes, to include preliminary MJDS prospectuses, to elaborate on the underwriting arrangements and to changesubsection title.

(8) Distributions made in Quebec

For distributions made in Quebec, both English and French language versions of the preliminary MJDS Prospectus, MJDS Prospectus and each amendment andsupplement thereto are required to be filed. Legislation in Quebec requires that French language versions of the documents or portions of documentsincorporated by reference into any of those documents be filed in Quebec not later than the time the incorporating document is filed. Thus, French languageversions of continuous disclosure documents need not be filed until incorporated by reference. In addition, information contained in a Form 10-K, Form 10-Q orForm 8-K prescribed under the 1934 Act that is not required to be disclosed under Quebec requirements applicable to distributions not made under the MJDSneed not be included in the French language versions of those documents.

Notwithstanding the foregoing, section 6.15 of NI 71-101 provides that French language versions of the disclosure documents are not required to be filed forrights offerings made under paragraph 3.1(b) of NI 71-101, unless (i) the issuer is a reporting issuer in Quebec other than solely as a result of rights offeringsmade under paragraph 3.1(b) of NI 71-101, or (ii) 20 percent or more of the class of securities in respect of which the rights are issued is held by persons orcompanies whose last address as shown on the books of the issuer is in Canada.

Source: NP 45, s.3.8(1), 4th paragraph

For filings made in Quebec, both English and French language versions of the preliminary prospectus, prospectus and each amendment and supplement theretoshall be filed in the requisite numbers. French language versions of the documents incorporated by reference into any of those documents shall be filed in Quebecnot later than the time the incorporating document is filed. Thus, French language versions of continuous disclosure documents need not be filed untilincorporated by reference. In addition, information contained in a Form 10-K or Form 10-Q prescribed under the 1934 Act that is not required to be disclosedunder Quebec requirements applicable to offerings not made under the MJDS need not be included in the French language versions of those documents.Notwithstanding the foregoing, French language versions of the disclosure documents are not required to be filed for rights offerings made pursuant to Section3.4, unless (i) the issuer is a reporting issuer in Quebec other than solely as a result of rights offerings made pursuant to Section 3.4, or (ii) 20% or more of theclass of securities in respect of which the rights are issued is held by persons or companies whose last address as shown on the books of the issuer is in Canada.

Methodology: Reference to Form 8-K added.

(9) Modification or Amendment

Part 7 of NI 71-101 outlines the amendment and supplement procedures for MJDS prospectus distributions.

An amendment to a registration statement that modifies the related U.S. prospectus, other than an amendment that has been made as a result of the occurrence ofan adverse material change since the filing of the preliminary MJDS prospectus or an amendment to the preliminary MJDS prospectus, need not be filed as anamendment to the preliminary MJDS prospectus.

Source: NP 45, s. 3.8(5), 2nd paragraph.

Where a registration statement is amended in a manner that modifies the related U.S. prospectus, two copies of the documents containing the modification shallbe filed with each applicable securities regulatory authority as nearly as practicable contemporaneously with the filing of the amendment with the SEC. If thereceipt for the prospectus has not been issued and the filing has been made as a result of the occurrence of a material adverse change since the last filing, suchdocuments are required to be filed as an amendment to the preliminary prospectus. The issuer shall specify, upon filing, that such documents have been filed assuch under applicable Canadian securities legislation. Otherwise such documents will not be considered to be amendments to the preliminary prospectus withinthe meaning of applicable Canadian securities legislation. Any modifications made to a prospectus by filing a post-effective amendment to the registrationstatement with the SEC must be made by filing an amendment to the prospectus with the applicable securities regulatory authorities.

Methodology: Post-effective amendments are required to be filed with Canadian securities regulators by section 7.3 of NI 71-101.

(10) Advertising

The provisions of securities legislation relating to the advertising of securities or the making of representations or undertakings in respect of distributions ofsecurities, other than representations as to listing or quotation of securities, including the distribution of material to potential investors and the provision ofinformation to the press before the issuance of a receipt for the MJDS prospectus, apply to distributions made under the MJDS.

Source: NP 45, s.3.8(1), 7th paragraph

The provisions of applicable Canadian securities legislation relating to the advertising of securities or the making of representations or undertakings in respect ofofferings of securities, including, without limitation, the distribution of material to potential investors and the provision of information to the press prior to theissuance of a receipt for the prospectus, shall apply to offerings made under the MJDS.

Methodology: Conforming and non-substantive changes only.

(11) Review Procedures

Disclosure documents filed for a distribution under NI 71-101 will be subject to SEC review procedures if the offering is being made both in Canada and theUnited States. Whether the offering is made both in Canada and the United States or solely in Canada, the Canadian securities regulatory authorities will monitormaterials filed under NI 71-101 to check compliance with the specific disclosure and filing requirements of NI 71-101. In addition, the substance of thedisclosure documents will be reviewed in the unusual case if, through monitoring of the materials or otherwise, the Canadian securities regulatory authoritieshave reason to believe that there may be a problem with a transaction or the related disclosure or other special circumstances exist.

An issuer making an offering in Canada and the U.S. using the MJDS must select a principal jurisdiction in Canada. As of the date of this Policy, the securitiesregulatory authorities of New Brunswick, Prince Edward Island, Newfoundland, Yukon Territory and the Northwest Territories have indicated that they will notagree to act as principal jurisdiction under section 5.1 of NI 71-101.

Source: NP 45, s.3.8(3)

Review Procedures

Disclosure documents filed for an MJDS offering will be subject to SEC review procedures if the offering is being made both in Canada and the United States.Whether the offering is made both in Canada and the United States or solely in Canada, the applicable securities regulatory authorities will monitor materials filedunder the MJDS in order to check compliance with the specific disclosure and filing requirements of this Policy Statement. In addition, the substance of thedisclosure documents will be reviewed in the unusual case where, through monitoring of the materials or otherwise, the applicable securities regulatoryauthorities have reason to believe that there may be a problem with a transaction or the related disclosure or other special circumstances exist.

If the SEC notifies an issuer that a filing made under the MJDS has been selected for review, the issuer shall so notify the principal jurisdiction.

Source: NP 45, s.3.8(2), last sentence

As of the date of this Policy Statement, the securities regulatory authorities of New Brunswick, Prince Edward Island, Newfoundland, Yukon Territory and theNorthwest Territories have indicated that they will not agree to act as principal jurisdiction in connection with offerings made under the MJDS.

Methodology: Because review procedures relate to the exercise by the Canadian securities regulatory authorities of their discretion, the relevant provisions ofNP 45 have been incorporated in the Policy rather than in the National Instrument.

(12) Receipt Procedures

The receipt for a preliminary MJDS Prospectus filed under NI 71-101 will be issued by each regulator when the preliminary MJDS Prospectus and all otherrequired documentation have been filed with it in the manner required by NI 71-101.

If a distribution under NI 71-101 is being made concurrently in the United States, the receipt for a MJDS prospectus filed under NI 71-101 will be issued by eachregulator when the following conditions have been satisfied, unless the regulator has reason to believe that there may be a problem with the transaction or therelated disclosure or other special circumstances exist,

(a) if the regulator is in the principal jurisdiction, the related registration statement has become effective under the SEC rules, as notified in writing by the issuerunder section 6.11 of NI 71-101;

(b) in the case of the other jurisdictions, the regulator in the principal jurisdiction has notified each other applicable regulator that the regulator in the principaljurisdiction has issued a receipt for the MJDS Prospectus; and

(c) the MJDS prospectus, all documents incorporated or deemed to be incorporated therein by reference and all other documentation required to be filed underNI 71-101 have been filed with the regulator in the manner required by NI 71-101.

If the offering is being made solely in Canada, the receipt for a MJDS prospectus filed under NI 71-101 will be issued by each applicable regulator when theconditions set out in paragraphs (b) and (c) above have been satisfied, unless it has reason to believe that there may be a problem with the transaction or therelated disclosure or other special circumstances exist.

Source: NP 45, s.3.8(4), 1st paragraph

Receipt Procedures

The receipt for a preliminary prospectus filed under the MJDS will be issued by each applicable securities regulatory authority when the preliminary prospectusand all required supporting documentation have been filed with it in the manner required by this Policy Statement.

Where the offering also is being made in the United States, the receipt for a prospectus filed under the MJDS will be issued by each applicable securitiesregulatory authority, unless it has reason to believe that there may be a problem with the transaction or the related disclosure or other special circumstances exist,upon the following conditions having been satisfied:

(a) in the case of the principal jurisdiction, the related registration statement has been declared effective by the SEC, as certified by the issuer in writing (whichmay be in facsimile form);

(b) in the case of the other Canadian provinces and territories, the principal jurisdiction has notified such securities regulatory authority that the principaljurisdiction has issued a receipt for the prospectus; and

(c) the prospectus, all documents incorporated therein by reference and all supporting documentation required by this Policy Statement have been filed with suchsecurities regulatory authority in the manner required by this Policy Statement.

Where the offering is being made solely in Canada, the receipt for a prospectus filed under the MJDS will be issued by each applicable securities regulatoryauthority upon the conditions set out in (b) and (c) above having been satisfied, unless it has reason to believe that there may be a problem with the transaction orthe related disclosure or other special circumstances exist.

Issuers filing a prospectus under the MJDS may elect to use the National Policy No. 1 Receipt System. Reference should be made to National Policy StatementNo. 1 for the procedures, requirements and benefits of that system.

Methodology: The mandatory requirement imposed by section 3.8(4) of NP 45 upon U.S. issuers (subparagraph (a)) has been reflected in section 6.11 of NI71-101. The balance of the section relates to the exercise by the regulators of their discretion and so has been included in the Policy.

Issuers filing a MJDS Prospectus under NI 71-101 may elect to use the receipt system in the policy on mutual reliance. Reference should be made to the policyon mutual reliance for the procedures, requirements and benefits of the system provided by that policy.

Methodology: It is anticipated that the policy on mutual reliance, which has not yet been published for comment, will replace the National Policy Statement No.1.

(13) Rule 415 Offerings and Rule 430A Offerings

(a) The procedures permitted by Rule 415 and Rule 430A under the 1933 Act may be used for offerings of securities under NI 71-101. National Instrument44-102 Rules for Shelf Prospectus Distributions and for Pricing Distributions after the Final Prospectus is Receipted does not apply to those offerings. Aprospectus supplement filed in accordance with the procedures permitted by Rule 415 or Rule 430A will not be subject to the review procedures set out insubsection 3.2(11) or the receipt procedures set out in subsection 3.2(12) of this Policy.

(b) None of a revised U.S. prospectus, a prospectus supplement, a rule 415 prospectus supplement and a rule 430A pricing prospectus is an amendment to aMJDS prospectus.

Source: NP 45, s.3.7

Rule 415 Offerings and Rule 430A Offerings - The procedures permitted by Rule 415 and Rule 430A under the 1933 Act may be used for offerings of securitiesunder the MJDS. The shelf procedures and post-receipt pricing rules set forth in National Policy Statement No. 44 do not apply to such offerings. A prospectussupplement filed in accordance with the procedures permitted by Rule 415 or Rule 430A shall not be subject to the review procedures set out in Section 3.8(3)or the receipt procedures set out in Section 3.8(4).

Source: NP 45 3.8(5) 4th paragraph

Methodology: Preserved as explanatory.

(14) Certification for Rule 415 Offerings

Method 1 can be substituted for method 2 and vice versa until the filing of the MJDS prospectus. The method chosen for the provision of the issuer's andunderwriters' certificates need not be the same.

Method 1 allows the use of prospectus supplements and in the case of MTN programs, pricing supplements (i.e., supplements setting the price and certainvariable terms of the securities rather than establishing the program) that do not contain certificates, if a "forward-looking" certificate has been included in theprospectus or in the supplement establishing the program.

Method 2 requires the inclusion of certificates in each prospectus supplement and pricing supplement filed under the MJDS, provided that no certificate isrequired to be included in a prospectus supplement or pricing supplement filed in the principal jurisdiction if the securities covered by the prospectus supplementor pricing supplement are not offered in Canada.

The text of the certificates for rule 415 offerings is set forth in the appendix to NI 71-101.

Source: NP 45, s.3.11(2), all but 1st sentence.

Either method can be substituted for the other until the filing of the prospectus. The method chosen for the provision of the issuer's and underwriters' certificatesneed not be the same.

Method 1 allows the use of prospectus supplements and in the case of MTN Programs, pricing supplements (i.e., supplements setting the price and certainvariable terms of the securities rather than establishing the program) that do not contain certificates, provided that a "forward-looking" certificate has beenincluded in the prospectus or in the supplement establishing the program.

Method 2 requires the inclusion of certificates in each prospectus supplement and pricing supplement filed under the MJDS, provided that no certificate isrequired to be included in a prospectus supplement filed with the securities regulatory authority in the principal jurisdiction if the securities covered by suchprospectus supplement are not offered in Canada.

The text of the certificates for Rule 415 Offerings is set forth in Appendix "A".

Methodology: Conforming changes only.

(15) Disclosure of Interest of Underwriter

An underwriter of the Canadian distribution named in the preliminary MJDS Prospectus or MJDS Prospectus remains subject to any obligation under Canadiansecurities legislation to disclose the names of persons or companies having an interest in its capital.

Source: NP 45, s.3.9(5)

An underwriter of the Canadian offering named in the preliminary prospectus or prospectus remains subject to any obligation under applicable Canadiansecurities legislation to disclose the names of persons or companies having an interest in its capital.

Methodology: Conforming changes only.

(16) Conflicts of Interest

An exemption from the provisions of Canadian securities legislation that regulate conflicts of interest in connection with the distribution of securities of aregistered dealer or a connected issuer of a registered dealer by requiring the participation of an independent underwriter is provided for distributions under NI71-101 on the basis that independent underwriters participate in the distribution to the extent set out in Part 10 of NI 71-101.

Source: NP 45, s.3.12(1)

General

Any provisions of applicable Canadian securities legislation which regulate conflicts of interest in connection with the distribution of securities of a registereddealer or a related party or related issuer or connected party or connected issuer of a registered dealer (the "Conflicts Rules") apply to offerings under the MJDSas follows:

(a) the Conflicts Rules shall not apply so as to require any specified disclosure in the preliminary prospectus or prospectus; and

(b) the Conflicts Rules shall apply so as to require the participation of an independent underwriter to the extent provided in Sections 3.12(2) and (3).

Methodology: Specific requirements relating to participation of underwriters (s.3.12(2) of NP 45) are dealt with explicitly in Part 10 of NI 71-101.

(17) Trust Indenture Requirements

Section 19.1 of NI 71-101 provides that any requirement of a jurisdiction applicable to trust indentures for any debt outstanding or guaranteed thereunder,including a requirement that a person or company appointed as a trustee under a trust indenture be resident or authorized to do business in the jurisdiction, doesnot apply to offerings made under NI 71-101, if the conditions of Section 19.1 are met.

Source: NP 45, s.3.13

Trust Indenture Requirements - Any requirement of a Canadian province or territory, applicable to trust indentures, in respect of any debt outstanding orguaranteed thereunder (including without limitation, any requirement that a person or company appointed as a trustee under a trust indenture be resident orauthorized to do business in the province or territory) shall not apply to offerings made under the MJDS, provided that:

1. the trust indenture under which the obligations are issued or guaranteed is subject to and complies with the Trust Indenture Act of 1939 of the United States;and

2. at least one person or company appointed as trustee under a trust indenture (i) is resident in such province or territory, (ii) is authorized to do business in suchprovince or territory, or (iii) has filed with the applicable securities regulatory authority in such province or territory a duly executed Submission to Jurisdictionand Appointment of Agent for Service of Process in the form set forth in Part C of Appendix "B".

Methodology: Conforming changes only.

(18) Fees

Canadian securities legislation regarding fees applies to a filing made under NI 71-101.

 

Source: NP 45, s.3.14(6)

(6) Fees

The provisions of Canadian securities legislation regarding fees shall apply to an offering made under the MJDS in the same manner as though the offering hadnot been made under the MJDS.

Fees shall be payable for a Rule 415 Offering or Rule 430A Offering in the manner prescribed for offerings made under the shelf procedures and post-receiptpricing rules set forth in National Policy Statement No. 44, respectively.

Methodology: As the MJDS does not change filing fees, a fee provision in NI 71-101 is unnecessary.

3.3 Registration Requirements for Rights Offerings

The dealer registration requirement applies to

(a) a dealer manager that solicits exercise of rights; and

(b) a dealer that resells securities acquired under a standby underwriting commitment by the dealer to purchase securities unsubscribed for by othersecurityholders

in a rights offering made under NI 71-101.

Source: NP 45, s.3.4(4) as indicated below.

(4) Dealer Registration Requirements

Registration as a dealer is not required by an issuer in respect of a rights offering made under Section 3.4. A standby underwriter or dealer manager for a rightsoffering made under Section 3.4 is not required to register as a dealer if it does not engage in soliciting activity in Canada or resell in Canada any securitiesacquired under the standby underwriting arrangement.

Methodology: The second sentence of NP 45 s.3.4(4) is a comment not a requirement or an exemption and therefore has been included in Companion Policy71-101 CP rather than NI 71-101 or an implementing rule in a jurisdiction.

3.4 Bids for Securities of U.S. Issuers

(1) General

Subject to the provisions of Part 12 of NI 71-101, the MJDS permits eligible take-over bids and issuer bids for securities of a U.S. issuer to be made inaccordance with U.S. federal securities law to Canadian residents if Canadian residents hold less than 40 percent of the securities. The MJDS enables offerorsgenerally to comply with applicable U.S. disclosure requirements and requirements governing the conduct of the bid instead of complying with Canadianrequirements.

The MJDS is extended to take-over bids and issuer bids primarily to encourage fair treatment of Canadian investors. Securityholders in a particular jurisdictionwho are excluded from an offer may be relegated to choosing, without the disclosure and procedural safeguards available under either the Canadian or the U.S.regulatory scheme, either to sell into the secondary market at less than the full bid price and incur additional transactional costs or to remain minoritysecurityholders subject to the possibility of being forced out of their equity position in a subsequent merger. The application of the MJDS to bids is intended tofacilitate bids by reducing duplicative regulation and avoiding conflict between the two regulatory schemes. Because the substantive protections and disclosureobligations applicable to bids in the United States are, as a whole, comparable to those prescribed by Canadian securities legislation, Canadian resident holders ofsecurities of U.S. issuers should remain adequately protected by the application of U.S. rather than Canadian rules in the circumstances contemplated by NI71-101.

Particularly when relatively few securities are held by Canadian residents, there may be a disincentive to extend a bid to them if doing so would requirecompliance with additional Canadian regulatory requirements. The availability of the MJDS for bids for securities of U.S. issuers is intended to alter the offeror'scost-benefit analysis in favour of extending those bids to Canadian residents.

There are no offeror eligibility requirements except in the case of securities exchange bids. For securities exchange bids made under the MJDS, compliance withU.S. disclosure requirements satisfies Canadian disclosure requirements with respect to the offeror and the offered securities only if the offeror meets certainreporting history, listing and other eligibility requirements and, in the case of securities exchange take-over bids, a public float or investment grade ratingrequirement. In take-over bids, unlike issuer bids and rights offerings, the investor has not already made an investment decision with respect to the issuer of thesecurities that are being offered in the exchange.

Source: NP 45, s.4.1

General - Subject to the provisions of this Section 4, the MJDS permits eligible take-over bids and issuer bids for securities of a U.S. issuer to be made inaccordance with U.S. requirements to Canadian residents where Canadian residents hold less than 40% of the securities. The MJDS enables offerors generally tocomply with applicable U.S. disclosure requirements and requirements governing the conduct of the bid in lieu of complying with Canadian requirements.

The MJDS is extended to take-over bids and issuer bids primarily to encourage fair treatment of Canadian investors. Securityholders in a particular jurisdictionwho are excluded from an offer may be relegated to choosing, without the disclosure and procedural safeguards available under either the Canadian or the U.S.regulatory scheme, whether to sell into the secondary market at less than the full bid price and incur additional transactional costs or to remain minoritysecurityholders subject to the possibility of being forced out of their equity position in a subsequent merger. The application of the MJDS to bids is intended tofacilitate bids by reducing duplicative regulation and avoiding conflict between the two regulatory schemes. Because the substantive protections and disclosureobligations applicable to bids are, as a whole, comparable to those prescribed by applicable Canadian securities legislation, Canadian resident holders of securitiesof U.S. issuers should remain adequately protected by the application of U.S. rather than Canadian rules in the circumstances contemplated by this PolicyStatement.

Particularly when relatively few securities are held by Canadian residents, there may be a disincentive to extend a bid to them if doing so would requirecompliance with additional Canadian regulatory requirements. The availability of the MJDS for bids for securities of U.S. issuers is intended to alter the offeror'scost-benefit analysis in favour of extending those bids to Canadian residents.

There are no offeror eligibility requirements except in the case of securities exchange bids. For securities exchange bids, compliance with U.S. disclosurerequirements satisfies Canadian disclosure requirements with respect to the offeror and the offered securities only if the offeror meets certain reporting history,listing and other eligibility requirements and, in the case of securities exchange take-over bids, a substantiality or Approved Rating requirement. In take-overbids, unlike issuer bids and rights offerings, the investor has not already made an investment decision with respect to the issuer of the securities that are beingoffered in the exchange.

Bids made under the MJDS must be extended to all holders of the class of securities subject to the bid in Canada and the United States. Further, bids must bemade on the same terms and conditions to all securityholders.

Methodology: Provides general background information. Conforming changes only.

Bids made under the MJDS must be extended to all holders of the class of securities subject to the bid in Canada and the United States. Further, bids must bemade on the same terms and conditions to all securityholders.

The provisions of securities legislation governing the form and content of disclosure documents and the conduct of bids are varied in respect of bids made underthe MJDS to the extent provided in NI 71-101 and the implementing law of a jurisdiction. Bids made under the MJDS remain subject to any requirements to filewith the Canadian securities regulatory authorities and send a bid circular, a directors' circular or an individual director's or officer's circular and any notice ofchange or notice of variation to holders of the securities subject to the bid.

The requirement to send bid materials to holders of the securities subject to the bid applies whether those materials are published, sent or given to securityholdersresident in the United States of America by the use of stockholder lists and security position listings, or by long form or summary publication.

Each MJDS take-over bid circular, MJDS issuer bid circular, MJDS directors' circular and MJDS director's or officer's circular remains subject to therequirement that it not contain an untrue statement of a material fact or omit to state a material fact that is required to be stated or that is necessary to make astatement not misleading in light of the circumstances in which it was made.

Source: NP 45, s.4.3, 1st two sentences

Effect of Making a Bid - Subject to the provisions of this Section 4.3 and of Section 4.4, any bid made under the MJDS shall be exempt from compliance withthe provisions of applicable Canadian securities legislation governing the conduct of bids, except any requirement to file with the applicable securities regulatoryauthorities and deliver a bid circular, a directors' circular or an individual officer's or director's circular and any notice of change or notice of variation to holdersof the securities subject to the bid. Except as specifically provided in this Policy Statement, such documents are not required to comply with the form and contentrequirements set forth in applicable Canadian securities legislation.

Source: NP 45, s.4.5(4) 1st paragraph.

(2) Alternative Exemptions

Provision is made in the Canadian securities legislation of some jurisdictions for exemption from take-over bid and issuer bid requirements if the bid is made incompliance with the laws of a recognized jurisdiction and there are relatively few holders in the jurisdiction holding a relatively small percentage of the class ofsecurities subject to the bid. An offeror may make a bid under the MJDS in certain jurisdictions and under such an exemption in others.

Source: NP 45, s.4.1

Provision is made in the securities legislation of some Canadian provinces for exemption from take-over bid and issuer bid requirements if the bid is for thesecurities of a non-Canadian issuer, the bid is made in compliance with the laws of a recognized jurisdiction and there are relatively few holders in the provinceholding a relatively small percentage of the class of securities subject to the bid. An offeror is permitted to make a bid under the MJDS in certain provinces andterritories and pursuant to such an exemption in others.

Methodology: Conforming changes, except reference to non-Canadian issuer deleted as de minimis exemption applies to domestic issuers as well.

(3) Certain Continuing Requirements

Source: NP 45, s.4.3, paragraphs 2-6

Methodology: Conforming changes.

(a) Early Warning

Provisions of Canadian securities legislation that require disclosure of acquisitions reaching a certain threshold or restrict acquisitions of securities once such athreshold has been reached continue to apply in respect of U.S. offeree issuers that are reporting issuers in a jurisdiction.

Provisions of applicable Canadian securities legislation that require disclosure of acquisitions reaching a certain threshold or restrict acquisitions of securities

once such a threshold has been reached continue to apply.

(b) Going Private Transactions

Bids made under the MJDS are subject to the requirements of Canadian securities legislation relating to going private transactions, other than the requirement toprovide a valuation at the time of a take-over bid if it is anticipated by the offeror that a going private transaction will follow the bid.

Bids made under the MJDS must comply with the relevant requirements of applicable Canadian securities legislation relating to going private transactions, otherthan the requirement to provide a valuation at the time of a take-over bid where it is anticipated by the offeror that a going private transaction will follow the bid.

Methodology: In most jurisdictions, the rule implementing NI 71-101 in a jurisdiction will provide an exemption from the valuation requirement under thesecurities legislation of that jurisdiction. In Ontario, however, Rule 71-801, the rule implementing NI 71-101, will not need to provide an exemption from thevaluation requirement as Rule 61-501 (formerly Blanket Order re: Insider Bids, Issuer Bids and Take-Over Bids in Anticipation of Going Private Transactions(1993), 16 OSCB 3429) provides this relief for all take-over bids if the offeror anticipates that a going private transaction will follow a take- over bid.

(c) Pre-bid Integration

Canadian securities legislation regulating take-over bids includes provisions regarding integration of pre-bid transactions with the bid. These provisions apply toMJDS bids only if 20 percent or more of a class of securities that is the subject of a take-over bid made under the MJDS is held by persons or companies whoselast address as shown on the books of the issuer is in Canada.

Where 20% or more of any class of securities that is the subject of a bid made under the MJDS is held by persons or companies whose last address as shown onthe books of the issuer is in Canada, such bid must comply with the requirements of applicable Canadian securities legislation respecting integration of pre-bidtransactions with the bid.

Methodology: The implementing law of a jurisdiction will grant the exemptions from the pre-bid integration rules and valuation requirements.

(d) Valuation Requirements in Issuer and Insider Bids

The valuation requirements of Canadian securities legislation with respect to issuer bids and insider bids apply to issuer bids and insider bids made under theMJDS only if 20 percent or more of a class of securities that is the subject of the bid is held by persons or companies whose last address as shown on the booksof the issuer is in Canada.

Where 20% or more of any class of securities that is the subject of an issuer bid or insider bid made under the MJDS is held by persons or companies whose lastaddress as shown on the books of the issuer is in Canada, such bid must comply with the valuation requirements of applicable Canadian securities legislation.

Methodology: Relief granted in the implementing law of a jurisdiction.

(e) Public Interest Jurisdiction

All bids remain subject to the fundamental principle that transactions must not be prejudicial to the public interest. The Canadian securities regulatory authoritieswill continue to exercise their public interest jurisdiction in specific cases if they determine that it is necessary to do so in order to preserve the integrity of theCanadian capital markets or to protect investors.

All bids remain subject to the fundamental principle that transactions must not be prejudicial to the public interest. The applicable securities regulatory authoritiesalso will continue to exercise their public interest jurisdiction in specific cases where they determine that it is necessary to do so in order to preserve the integrityof the Canadian capital markets.

(4) Directors' and Individual Director's and Officer's Circulars

If a take-over bid is made under the MJDS, the offeree issuer and its directors and officers may elect to comply either with the requirements of Canadiansecurities legislation or as provided in NI 71-101 with U.S. federal securities law in respect of their response to the bid. In the case of compliance by the directorsor by individual directors or officers with Canadian requirements, the requirements set out in NI 71-101 regarding directors' circulars or individual director's orofficer's circulars, as the case may be, do not apply. Notwithstanding that a take-over bid was eligible to be made under the MJDS, the offeree issuer and itsdirectors and officers may not use the MJDS in respect of the bid if the offeror did not make the bid under the MJDS.

Source: NP 45, s.4.5(2), 1st two sentences and last sentence

Directors' and Individual Officer's and Director's Circulars

If a bid is made under the MJDS, the offeree issuer and its officers and directors shall comply with the requirements of applicable Canadian securities legislationor with U.S. requirements in respect of the bid. In the case of compliance by the directors or by individual officers or directors with Canadian requirements, therequirements set out in this Policy Statement regarding directors' circulars or individual officer's or director's circulars, as the case may be, shall not apply. . . . .Notwithstanding that a bid was eligible to be made under the MJDS, the offeree issuer and its officers and directors may not use the MJDS in respect of the bid ifthe offeror did not make the bid under the MJDS.

Methodology: Minor changes to clarify elective nature. Deleted portion has been incorporated in section 12.13 of NI 71-101.

(5) Bids Made in Quebec

A French language version of a MJDS bid circular, together with French language versions of all documents or parts thereof incorporated by reference into theMJDS bid circular that contain information required to be disclosed in a bid circular not prepared in accordance with NI 71-101, is required to be filed inQuebec.

However, a French language version of a MJDS bid circular is not required to be filed for a bid made under the MJDS, unless (i) the offeree issuer is a reportingissuer in Quebec, or (ii) 20 percent or more of a class of securities that is the subject of the bid is held by persons or companies whose last address as shown onthe books of the issuer is in Canada.

Source: NP 45, s.4.5(1), 1st paragraph, 1st sentence

French language versions of these documents are not required to be filed for bids made under the MJDS, unless (i) the offeree issuer is a reporting issuer inQuebec, or (ii) 20% or more of any class of securities that is the subject of the bid is held by persons or companies whose last address as shown on the books ofthe issuer is in Canada.

Methodology: Conforming changes only.

(6) Notices of Variation and Notices of Change

The provisions of Canadian securities legislation that prescribe the circumstances in which a bid circular, directors' circular, or individual officer's or director'scircular is required to be changed or varied and the form and content of the applicable disclosure documents do not apply to bids made under the MJDS, unless,in respect of the directors' circular or individual officer's or director's circular, the directors or individual officer or director have elected to comply with therequirements of Canadian securities legislation otherwise applicable. Instead, disclosure documents filed under the MJDS should be changed or varied inaccordance with the requirements of section 12.15 of NI 71-101.

Source: NP 45, s.4.5(3), 1st sentence

Notices of Variation and Notices of Change

The provisions of applicable Canadian securities legislation that prescribe the circumstances under which a bid circular, directors' circular, or individual officer'sor director's circular is required to be changed or varied and the form and content of the applicable disclosure documents shall not apply to bids made under theMJDS, unless, in respect of the directors' circular or individual officer's or director's circular, the directors or individual officer or director have elected to complywith the requirements of applicable Canadian securities legislation. Instead, disclosure documents filed under the MJDS shall be changed or varied in accordancewith U.S. requirements as additional tender offer materials, but shall contain the legends, where applicable, and certificates required by this Policy Statement.

Methodology: Conforming changes and modification of last sentence to link in to National Instrument.

(7) Fees

Canadian securities legislation regarding fees applies to a bid made under NI 71-101.

Source: NP 45, s.4.9

4.9 Fees - The provisions of Canadian securities legislation regarding fees shall apply to a bid made under the MJDS in the same manner as though the bid hadnot been made under the MJDS.

3.5 Business Combinations

The MJDS permits securities of a U.S. issuer to be distributed by prospectus in Canada on the basis of documentation prepared in accordance with U.S. federalsecurities law, with certain additional Canadian disclosure, in connection with a business combination if less than 40 percent of the securities to be distributed bythe successor issuer would be held by Canadian residents. As in the case of bids, the MJDS is available for business combinations primarily to encourage fairtreatment of Canadian investors. A MJDS prospectus filed for a distribution of securities in connection with a business combination need not contain areconciliation of the financial statements in the prospectus to Canadian GAAP.

Canadian securities legislation of most of the jurisdictions provides for an exemption from prospectus requirements for certain distributions of securities issued inconnection with a statutory amalgamation, merger or arrangement. As a result, an issuer may elect not to use the MJDS, but to distribute securities issued in abusiness combination under a prospectus exemption. A consequence of using a prospectus exemption instead of the MJDS may be resale restrictions on thedistributed securities. However, under rules or blanket rulings or orders issued in certain jurisdictions, the resale of securities acquired under such an exemptionis not a distribution for which a prospectus is required if the issuer meets certain eligibility and reporting requirements and the resale is executed through thefacilities of a stock exchange or certain other regulated markets outside of the jurisdiction.

Source: NP 45, s.5.1

General - The MJDS permits securities of a U.S. issuer to be distributed by prospectus in Canada on the basis of documentation prepared in accordance withU.S. requirements (with certain additional Canadian disclosure) in connection with a business combination where less than 40% of the securities to be distributedby the successor issuer would be held by Canadian residents. As in the case of take-over bids, the MJDS is available for business combinations primarily toencourage fair treatment of Canadian investors.

Securities legislation of most of the Canadian provinces and territories provides for an exemption from prospectus requirements for certain distributions ofsecurities issued in connection with a statutory amalgamation, merger or arrangement. As a result, an issuer may elect not to use the MJDS, but to distributesecurities issued in a business combination pursuant to a prospectus exemption. A consequence of using a prospectus exemption instead of the MJDS may beresale restrictions on the distributed securities. However, under blanket rulings issued in certain provinces, the resale of securities acquired under such anexemption is not a distribution in respect of which a prospectus is required if the issuer meets certain eligibility and reporting requirements and the resale isexecuted through the facilities of a stock exchange outside of Canada or on Nasdaq.

Methodology: Conforming changes, except sentence added as last sentence of first paragraph of section 3.5 regarding no requirement for reconciliation offinancial statements to Canadian GAAP in order to include statement in section 5.3 of NP 45.

A business combination made under the MJDS must comply with the relevant requirements of securities legislation relating to going private transactions andrelated party transactions. All business combinations remain subject to the fundamental principle that transactions must not be prejudicial to the public interest.The Canadian securities regulatory authorities will continue to exercise their public interest jurisdiction in specific cases if they determine that it is necessary to doso to preserve the integrity of the Canadian capital markets or to protect investors.

A business combination done under the MJDS must comply with the relevant requirements of applicable Canadian securities legislation relating to going privatetransactions and, if it constitutes a related party transaction, the relevant requirements of applicable Canadian securities legislation relating to minority approvalsand valuations. All business combinations remain subject to the fundamental principle that transactions must not be prejudicial to the public interest. Theapplicable securities regulatory authorities also will continue to exercise their public interest jurisdiction in specific cases where they determine that it is necessaryto do so in order to preserve the integrity of the Canadian capital markets.

3.6 Continuous Disclosure, Proxies and Proxy Solicitation, Insider Reporting and Shareholder Communication

(1) General

An issuer that files a prospectus or a bid circular for a securities exchange take-over bid in certain jurisdictions becomes a reporting issuer in those jurisdictions,thereby becoming subject, among other things, to certain continuous disclosure, proxy and proxy solicitation, and shareholder communication requirements, andits insiders becoming subject to certain insider reporting requirements.

Parts 14 through 18 of NI 71-101 substitute U.S. federal securities law requirements for the requirements of Canadian securities legislation otherwise applicableto U.S. issuers and other persons or companies that satisfy the relevant eligibility criteria, if any, specified in those parts and that elect to comply with therequirements specified in those parts.

Source: NP 45, Part 6, 1st sentence

An issuer that files a prospectus or a bid circular for a securities exchange take-over bid in certain provinces of Canada becomes a reporting issuer in thoseprovinces, subject, among other things, to certain continuous disclosure, proxy and proxy solicitation, and shareholder communication requirements, with itsinsiders being subject to certain insider reporting requirements.

Methodology: The substance of virtually all of Part 6 of NP 45 is now reflected in NI 71-101. This section adds some brief explanation and addresses (insubsection (2)) one issue relating to shareholder communication not addressed in NI 71-101 as it did not relate to the obligations of U.S. issuers.

Canadian securities legislation in certain jurisdictions requires that issuers

(a) prepare their financial statements in accordance with, or reconcile the financial statements to, Canadian GAAP;

(b) state in the notes to the financial statements which option has been applied in the choice of generally accepted accounting principles; and

(c) include an auditor's report on the financial statements prepared in accordance with Canadian GAAS or include an explanation of the significant differencesbetween U.S. generally accepted auditing standards and Canadian GAAS.

U.S. issuers filing financial statements in accordance with Part 15 of NI 71-101 are exempt from these requirements under rules, blanket rulings or orders issuedin those jurisdictions.

Source: New

Methodology: Added to clarify that exemption granted from reconciliation requirement in section 2 of British Columbia rules.

(2) Communication with Beneficial Owners of Securities of a Reporting Issuer

If a U.S. issuer elects to comply with section 18.1 of NI 71-101, any Canadian clearing agency (i.e. The Canadian Depositary for Securities Limited) and anyintermediary whose last address as shown on the books of the issuer is in the local jurisdiction is required to comply with the requirements of National Instrument54-101 Communication with Beneficial Owners of Securities of a Reporting Issuer for such issuer, including, without limitation, responding to search cards anddelivering proxy-related materials within the time periods specified in National Instrument 54-101 Communication with Beneficial Owners of Securities of aReporting Issuer.

Source: NP 45, Part 6, 6th paragraph, first two sentences.

A U.S. issuer shall not be required to comply with the requirements of National Policy Statement No. 41 (Shareholder Communication) so long as it complieswith the requirements of Rule 14a-13 under the 1934 Act with respect to any Canadian clearing agency (i.e., The Canadian Depositary for Securities Limited andWest Canada Depositary Trust Company) and any intermediary whose last address as shown on the books of the issuer is in Canada. Any such clearing agencyor intermediary shall be required to comply only with the requirements of National Policy Statement No. 41 with respect to any such issuer, including withoutlimitation, responding to search cards and delivering proxy-related materials within the time periods specified in National Policy Statement No. 41.

Methodology: Subsection 3.6(2) of Companion Policy 71-101CP.

PART 4 CERTAIN OFFERINGS BY CANADIAN ISSUERS UNDER

THE U.S. MULTIJURISDICTIONAL DISCLOSURE SYSTEM

4.1 U.S. Trust Indenture Exemption

Rule 4d-9 made under the Trust Indenture Act of 1939 grants certain exemptions from the U.S. trust indenture provisions for a trust indenture filed with theSEC in connection with an offering of securities by a Canadian issuer under the U.S. multijurisdictional disclosure system if the trust indenture is subject to theCanada Business Corporations Act, the Bank Act (Canada), the Business Corporations Act (Ontario) or the Company Act (British Columbia). The trustindenture provisions of the Canada Business Corporations Act, the Bank Act (Canada) and the Company Act (British Columbia) apply to issuers incorporatedunder the respective statute, whether the debt is distributed in Canada or elsewhere. The trust indenture provisions of the Business Corporations Act (Ontario)and the Company Act (British Columbia) apply in certain circumstances to issuers whether or not incorporated under the applicable statute. In order for the trustindenture provisions of the Business Corporations Act (Ontario) to apply to a trust indenture, a prospectus or securities exchange issuer or take-over bid circularmust be filed in Ontario in respect of the debt to be issued or guaranteed under the trust indenture. The Company Act (British Columbia) trust indentureprovisions apply if the debt is issued (i) by a company incorporated in British Columbia regardless of where the debt is distributed, or (ii) to residents in BritishColumbia whether the debt is issued by prospectus, private placement or other exemption, subject to certain limited exceptions set out in the Company Act(British Columbia). Therefore, in order for the exemption in Rule 4d-9 to be available, Canadian issuers, other than those incorporated under the CanadaBusiness Corporations Act, the Bank Act (Canada) or the Company Act (British Columbia) must either file a prospectus or securities exchange issuer ortake-over bid circular in Ontario in connection with the offering or offer the securities in British Columbia by prospectus, private placement or under anotherexemption from the prospectus filing requirement other than those specified in the Company Act (British Columbia).

Source: New.

Methodology: In order for a Canadian issuer to be eligible for an exemption from U.S. trust indenture rules, the federal (CBCA or Bank Act), Ontario or B.C.trust indenture rules must be applicable. The CBCA, Bank Act and Company Act (British Columbia) trust indenture requirements apply to trust indentures madeby corporations incorporated under those statutes whether the debt is distributed in Canada or elsewhere. However, a prospectus or securities exchange issueror take-over bid circular must be filed in Ontario for the Ontario trust indenture rules in the Business Corporations Act (Ontario) to apply.

Consequently, an issuer not incorporated under the CBCA, Bank Act (Canada) or Company Act (British Columbia) wishing to use a Canadian form of trustindenture for an offering made under the U.S. multijurisdictional disclosure system may rely on the U.S. trust indenture exemption if the issuer files a prospectusin Ontario or British Columbia and receives a receipt therefor or files a securities exchange issuer or take-over bid circular in Ontario or British Columbia oroffers the securities by private placement in British Columbia.

4.2 Prospectus Filing in Canada

(1) General

An issuer distributing securities in the U.S. under the U.S. multijurisdictional disclosure system may be subject to a requirement to file a prospectus with aCanadian securities regulatory authority in a jurisdiction because part of the securities offered may be offered or sold to purchasers in that jurisdiction or as aresult of the likelihood that the securities sold in the U.S. will not come to rest outside that jurisdiction and thus the offering constitutes a distribution in thatjurisdiction for which a prospectus is required to be filed.

Source: NP 45, Part 7, 3rd paragraph

The selection of a review jurisdiction does not affect any obligation the issuer otherwise may have to file a prospectus with a securities regulatory authority inCanada, whether as a result of the likelihood that the securities will not come to rest outside of Canada, as a result of a distribution being made from a provinceor territory, or otherwise.

Methodology: The prospectus receipt issued in a jurisdiction in Canada under section 4.2(1) would not have a special status; it would qualify the securities fordistribution in the jurisdiction.

(2) Distribution from British Columbia, Alberta or Quebec

(a) An issuer located in British Columbia, Alberta or Quebec that is distributing securities in the U.S. under the U.S. multijurisdictional disclosure system issubject to a requirement to file a prospectus with the Canadian securities regulatory authority in British Columbia, Alberta or Quebec, respectively, because theU.S. distribution is being made from British Columbia, Alberta or Quebec, respectively, even if the securities qualified by the prospectus are offered and soldonly in the United States of America.

(b) Under British Columbia Rule 71-801 and Alberta Rule 71-801, an issuer filing a prospectus with the British Columbia Securities Commission or AlbertaSecurities Commission, respectively, in circumstances described in paragraph (a) need not include in the prospectus an underwriter's certificate.

(c) An issuer filing a prospectus with the Commission des valeurs mobilières du Québec in circumstances described in paragraph (a) may apply to theCommission des valeurs mobilières du Québec for an exemption from those requirements that solely would be applicable if the distribution were being made topurchasers in Quebec.

(d) An issuer that files a prospectus in British Columbia or Alberta in circumstances described in paragraph (a) should advise the SEC of the Canadian securitiesregulatory authority that is the review jurisdiction. The prospectus will be subject to the review procedures applicable to short form prospectuses as described inNational Policy Statement No. 1. The British Columbia Securities Commission or the Alberta Securities Commission will send the issuer the receipt for theprospectus after the comments, if any, on the prospectus have been resolved. If the issuer has filed a registration statement on Form F-9 or F-10 prescribedunder the 1933 Act with the SEC in connection with the distribution, the issuer should advise the SEC of the issuance of the receipt for the prospectus in orderthat the registration statement may become effective before the end of the seven calendar day period in Rule 467(b) under the 1933 Act.

(e) An issuer that files a prospectus in Quebec in circumstances described in paragraph (a) should advise the SEC that the Commission des valeurs mobilières duQuébec is the review jurisdiction. The Commission des valeurs mobilières du Québec will complete its review of the prospectus within three business days offiling of the prospectus and will send the issuer the receipt for the prospectus after the comments, if any, on the prospectus have been resolved. If the issuer hasfiled a registration statement on Form F-9 or F-10 in connection with the distribution, the issuer should advise the SEC of the issuance of the receipt for theprospectus in order that the registration statement may become effective before the end of the seven calendar day period in Rule 467(b) under the 1933 Act.

Source: New

4.3 Filings in Saskatchewan, Manitoba, Ontario and Nova Scotia For U.S. Only Distributions

(1) Filing Procedures

If an issuer other than an issuer located in British Columbia, Alberta or Quebec, that files a Form F-9 or F-10 in connection with a distribution solely in theUnited States of America under the multijurisdictional disclosure system adopted by the SEC seeks to have the registration statement become effective before theend of the seven calendar day period in Rule 467(b) under the 1933 Act, the issuer may select Saskatchewan, Manitoba, Ontario or Nova Scotia as reviewjurisdiction, file the registration statement filed with the SEC with the Canadian securities regulatory authority in the review jurisdiction contemporaneously withthe filing of the registration statement with the SEC, obtain a notification of clearance from the regulator and advise the SEC of the issuance of the notification ofclearance.

(2) Confirmation of Review Jurisdiction

If the Canadian securities regulatory authority selected under subsection (1) elects not to act as review jurisdiction, the issuer may select another Canadiansecurities regulatory authority as review jurisdiction and advise the SEC of the Canadian securities regulatory authority selected as review jurisdiction.

(3) Review Procedures

(a) The Canadian securities regulatory authority in the review jurisdiction will monitor registration statements filed under subsection (1). The substance of aregistration statement will be reviewed in the unusual case if, through monitoring of the materials or otherwise, the Canadian securities regulatory authority hasreason to believe that there may be a problem with the transaction or the related disclosure or other special circumstances exist.

(b) If the review jurisdiction selects a registration statement for review, it will send its comments to the issuer within three business days of the filing of theregistration statement.

(4) Notification of Clearance Procedures

A notification of clearance for the registration statement will be issued by the regulator in the review jurisdiction once any comments have been resolved, unlessthe Canadian securities regulatory authority in the review jurisdiction has reason to believe that there may be a problem with the transaction or the relateddisclosure or other special circumstances exist.

Source: NP 45, Part 7

U.S.-ONLY OFFERINGS BY CANADIAN ISSUERS

Where a Canadian issuer uses Form F-9 or F-10 prescribed under the 1933 Act to make an offering solely in the United States under the multijurisdictionaldisclosure system adopted by the SEC, the issuer shall select a review jurisdiction in Canada no later than the time of filing the registration statement with theSEC and shall advise the SEC of its selection. The jurisdiction selected may or may not agree to act in such capacity. If a jurisdiction does not agree to act, theissuer shall select another jurisdiction. As of the date of this Policy Statement, the securities regulatory authorities of New Brunswick, Prince Edward Island,Newfoundland, Yukon Territory and the Northwest Territories have indicated that they will not agree to act as the review jurisdiction in connection withofferings made under the MJDS. The issuer shall file with the review jurisdiction the documents that it files with the SEC no later than the time such documentsare filed with the SEC, provided that the preliminary prospectus and prospectus filed with the review jurisdiction need not contain a certificate signed by theunderwriters.

If the review jurisdiction selects a U.S.-only offering for review, it will so notify the issuer and the SEC within three business days of the date of filing of thepreliminary prospectus. The review jurisdiction will give its comments, if any, to the issuer. Once all the comments have been resolved, the review jurisdictionwill notify the issuer and the SEC of the receipt of the prospectus. The issuer shall pay a fee of $2,500 to the review jurisdiction at the time of filing thepreliminary prospectus.

Methodology: The relevant provisions of NP 45 have been incorporated in the Policy rather than in the National Instrument.

Methodology: It is proposed that the regulator in the review jurisdiction would issue a notification of clearance upon completion of the review, if any, of theregistration statement for a U.S. only distribution filed on Form F-9 or Form F-10.

(5) Filing of Amendments to Registration Statement

An issuer that files a registration statement under subsection (1) shall also file with the regulator in the review jurisdiction all amendments to the registrationstatement contemporaneously with the filing of such documents with the SEC.

Source: New