Notice and Proposed Rescission: Rescission of Uniform Act Policy No. 2-01, 2-02, 2-06, 2-08 and 2-09
Notice and Proposed Rescission: Rescission of Uniform Act Policy No. 2-01, 2-02, 2-06, 2-08 and 2-09
EXTRA-PROVINCIAL COMPANIES,
UNIFORM ACT POLICY NO. 2-02 PROSPECTUSES --
ANNUAL RE-FILINGS,
UNIFORM ACT POLICY NO. 2-06 USE OF
SHAREHOLDERS' LISTS BY REGISTRANTS,
UNIFORM ACT POLICY NO. 2-08 DECLARATION AS TO
SHORT POSITION --
LISTED AND UNLISTED SECURITIES, AND
UNIFORM ACT POLICY NO. 2-09 INSIDER TRADING REPORTS --
LOAN AND TRUST COMPANIES
Proposed Rescissions of Policies
The Canadian securities regulatory authorities in the provinces of Alberta, British Columbia, Manitoba, Ontario, and Saskatchewan propose to rescind thefollowing Uniform Act Policies:
-Uniform Act Policy No. 2-01 "Undertakings" -- Extra-Provincial Companies ("UAP 2-01")
-Uniform Act Policy No. 2-02 Prospectuses -- Annual Re-Filings ("UAP 2-02")
-Uniform Act Policy No. 2-06 Use of Shareholders' Lists by Registrants ("UAP 2-06")
-Uniform Act Policy No. 2-08 Declaration as to Short Position -- Listed and Unlisted Securities ("UAP 2-08")
-Uniform Act Policy No. 2-09 Insider Trading Reports -- Loan and Trust Companies ("UAP 2-09")
By notice published May 2, 1997 at (1997), 20 OSCB (Supp.) 3 the Commission indicated that it was proposing to rescind Uniform Act Policy 2-03Prospectuses and Amendments - Certification (Section 52) Supporting Documentation ("UAP 2-03") and Uniform Act Policy 2-04 Consent of Solicitors -Disclosure of Interest ("UAP 2-04"). The Canadian securities regulatory authorities in the jurisdictions of Alberta, British Columbia, Manitoba, andSaskatchewan are also proposing to rescind these Uniform Act Policies.
Reasons for the Proposed Rescissions
1. UAP 2-01
UAP 2-01 was adopted in April of 1971, and amended November 2, 1979. UAP 2-01 states that the Director will refuse to issue a receipt for a prospectus untilthe issuer proposing to distribute the equity securities being qualified by the prospectus has delivered certain undertakings. These undertakings must satisfyspecific sections of securities legislation relating to proxies and proxy solicitation, insider trading reports, and financial disclosure.
The Canadian securities regulatory authorities in the provinces referred to above are proposing to rescind UAP 2-01 as, in their view, the subject matter of UAP2-01 is obsolete. The provisions relating to undertakings have not been carried forward into the current versions of the securities legislation of the provincesreferred to above. As well, the definition of "reporting issuer" in provinces that make use of that concept includes many of the extra-jurisdictional corporationsthat had formerly filed undertakings.
2. UAP 2-02
UAP 2-02 was adopted in April of 1971, and amended June 30, 1971, effective September 1, 1971, and then amended again November 2, 1979. UAP 2-02deals with the lapse date of prospectuses, as well as steps that can be followed to minimize the possibility of a break in primary distribution.
The Canadian securities regulatory authorities in the provinces referred to above are proposing to rescind UAP 2-02 as, in their view, the subject matter of UAP2-02 is generally covered in the following provisions of securities legislation of those provinces:
-section 97 of the Alberta Act
-sections 70 and 71 of the British Columbia Act
-section 56 of the Manitoba Act
-section 62 of the Ontario Act
-section 71 of the Saskatchewan Act
3. UAP 2-06
UAP 2-06 was adopted in April of 1971. UAP 2-06 states that certain corporate legislation restricts the use of a list of all or any shareholders of a corporationto purposes connected with that corporation. UAP 2-06 also states that the buying, selling, or otherwise trafficking in such a list is an offence punishable onsummary conviction. At the time UAP 2-06 was adopted, federal corporations legislation did not contain similar provisions. Accordingly, the purpose of UAP2-06 is to give notice to all registrants that use by a registrant of all or part of a list of shareholders of any corporation in the manner outlined above will beconsidered by the Commission to be conduct contrary to the public interest, affecting fitness for continued registration.
The Canadian securities regulatory authorities in the provinces referred to above are proposing to rescind UAP 2-06 as, in their view, the conduct described bythe Policy is now generally an offence under most Canadian corporate legislation.
4. UAP 2-08
UAP 2-08 was adopted in April of 1971, and it was amended November 2, 1979. UAP 2-08 reminds registrants and the public of the securities legislationprovisions that requ re a declaration from a person or company that places an order for the sale of a security through an agent that is a registrant, if at the time ofplacing the order the person or company does not own the security, or if acting as agent the person or company knows that his, her, or its principal does not ownthe security. The required declaration must state that the person, company, or principal does not own the security. UAP 2-08 states that the declaration must bemade at the time the order to sell is given, regardless of whether the securities are listed or unlisted. UAP2-08 also states that if a client does not declare a "shortsale", failure by the client to deliver the securities within the normal time for delivery, without reasonable explanation, is prima facie an indication of a violation ofsecurities legislation, punishable on summary conviction, and should be reported by the registrant forthwith to the appropriate Canadian securities regulatoryauthority. Finally, UAP 2-08 states that registrants are requested to record and maintain for inspection a list of declared short sales of securities, both listed andunlisted.
The Canadian securities regulatory authorities in the provinces referred to above are proposing to rescind UAP 2-08 as, in their view, the majority of theprovisions in UAP 2-08 are now set out in the securities legislation in those provinces.
5. UAP 2-09
UAP 2-09 was adopted in April of 1971, and it was amended November 2, 1979. UAP 2-09 provides notice to insiders of loan and trust companies thatguaranteed deposit receipts or certificates of trust companies and deposit or savings accounts that are evidenced by a pass book are not considered by theCanadian securities regulatory authorities of those provinces referred to above to be capital securities for the purposes of insider trading reports.
The Canadian securities regulatory authorities in the provinces referred to above are proposing to rescind UAP 2-09 as, in their view, it is obsolete. In almost allcases, the definition of "security" contained in securities legislation excludes evidence of deposits issued by a registered loan corporation or trust corporation.
Unpublished Materials
In coming to this decision, the Canadian securities regulatory authorities in the provinces referred to above have not relied on any significant unpublished study,report, decision or other written materials.
Related Instruments
1. UAP 2-01
In Ontario, UAP 2-01 is related to Part XIX: Proxies and Proxy Solicitation, Part XXI: Insider Trading and Self-Dealing, and Part XVIII: ContinuousDisclosure.
2. UAP 2-02
In Ontario, UAP 2-02 is related to section 62 of the Ontario Act.
3. UAP 2-06
In Ontario, UAP 2-06 is related to subsection 127(1) of the Ontario Act.
4. UAP 2-08
In Ontario, UAP 2-08 is related to section 48 and paragraph 122(1)(c) of the Ontario Act.
5. UAP 2-09
In Ontario, UAP 2-09 is related to paragraph (e) of the definition of "security" in subsection 1(1) of the Ontario Act.
Comments
Interested parties are invited to make written submissions with respect to the proposed rescissions. Submissions received by September 22, 1998 will beconsidered.
Submissions should be addressed to all of the Canadian securities regulatory authorities listed below in care of the Ontario Securities Commission, in duplicate,as indicated below:
British Columbia Securities Commission
Alberta Securities Commission
Manitoba Securities Commission
Ontario Securities Commission
Saskatchewan Securities Commission
c/o Daniel P. Iggers, Secretary
Ontario Securities Commission
20 Queen Street West
Suite 800, Box 55
Toronto, Ontario M5H 3S8
A diskette containing the submissions (in DOS or Windows format, preferably WordPerfect) should also be submitted. As securities legislation in certainprovinces requires that a summary of written comments received during the comment period be published, confidentiality of submissions received cannot bemaintained.
Questions may be referred to:
Susan Greenglass
Legal Counsel, Policy Coordination
Ontario Securities Commission
(416) 593-8140
Text of Proposed Rescissions
1. UAP 2-01
"Uniform Act Policy No. 2-01 entitled "Undertakings -- Extra-Provincial Companies" is rescinded."
2. UAP 2-02
"Uniform Act Policy No. 2-02 entitled "Prospectuses -- Annual Re-Filings" is rescinded."
3. UAP 2-06
"Uniform Act Policy No. 2-06 entitled "Use of Shareholders' Lists by Registrants" is rescinded."
4. UAP 2-08
"Uniform Act Policy No. 2-08 entitled "Declaration as to Short Position -- Listed and Unlisted Securities" is rescinded".
5. UAP 2-09
"Uniform Act Policy No. 2-09 entitled Insider Trading Reports -- Loan and Trust Companies" is rescinded".
DATED: July 24, 1998.