OSC Staff Notice and Request for Comments - Public Interest Rule Amendment Policy 6 Distributions - Canadian Securities Exchange

The Canadian Securities Exchange (CSE or “Exchange”) is proposing amendments to Policy 6 - Distributions in accordance with s. 6(a) of Appendix C (“Process for the Review and Approval of Rules and Information Contained in Form 21-101F1 and the Exhibits Thereto”) of the CSE Recognition Order, as amended and s. 3.2(2) of National Instrument 21-101 Marketplace Operation.

The proposed amendments will introduce a requirement for resale restrictions on securities issued pursuant to a specific prospectus exemption.  National Instrument 45-106 Prospectus Exemptions (“NI 45-106”) includes subsection 2.24 Employee, executive officer, director and consultant (“s.2.24”).  While shares issued pursuant to s.2.24 are subject to a seasoning period described in National Instrument 45-102 Resale of Securities, the seasoning period has passed if the issuer has been a reporting issuer for at least 4 months. Policy 6 Distributions would be amended by adding, in the General section, additional language to section 1.4 to require a 4 month hold period on all shares issued pursuant to the s.2.24 exemption regardless of whether the seasoning period applied.  Resale restrictions must also be disclosed in a news release describing the share issuance.

A copy of the CSE Notice is published on our website at www.osc.gov.on.ca.