Notice and Proposed Rule: OSC Rule - 55-502 - Facsimile Filing or Delivery of Insider Reports

Substance and Purpose of Proposed Rule

The purpose of the proposed Rule is to allow for the signing, filing and delivery of insider reports by facsimile.

Sections 107, 108 and 109 of the Securities Act (the "Act") require the filing or delivery of insider reports and other related reports with the Commission.Section 140 of the Act provides that the filing of material required to be filed by Ontario securities law must be effected by depositing the material, or causing thematerial to be deposited, with the Commission. A rule is required to allow for the signing, filing or delivery of insider reports by facsimile because section 161 ofthe Regulation to the Act provides that except as otherwise provided in the Act, certain sections of the Regulation and one Rule, documents required to besigned or certified must be manually signed. Section 161 of the Regulation does not consider a document filed by facsimile to be manually signed.

Summary of Proposed Rule

The Rule sets out the requirements relating to the signing, filing and delivery of insider reports by facsimile. Under the Rule, facsimile filings will be consideredto be filed with or delivered to the Commission on the day that the facsimile transmission to the Commission is completed. The rule requires that the facsimiletransmission be made to a facsimile number specified by the Commission.

Authority for Proposed Rule

Paragraph 143(1)39 of the Act authorizes the Commission to make rules requiring or respecting the media, format, preparation, form, content, execution,certification, dissemination and other use, filing and review of all documents required under or governed by the Act, the regulations or the rules and alldocuments determined by the regulations or rules to be ancillary to the documents.

Alternatives Considered

In formulating the Rule, the Commission considered requesting the Lieutenant Governor in Council to adopt a specific regulation that would allow for thesigning, filing and delivery of insider reports by facsimile. As it is the Commission's intention over time to introduce rules in place of existing regulations, it didnot want to request that the Lieutenant Governor in Council create a new section of the Regulation.

Unpublished Materials

In proposing the Rule, the Commission has not relied on any significant unpublished study, report, decision or other written materials.

Anticipated Costs and Benefits

The proposed Rule benefits persons or companies required to sign, file or deliver insider reports in that it allows these reports to be signed, filed or delivered byfacsimile. The proposed Rule imposes no costs on those persons or companies.

Regulations to be Amended

In connection with the implementation of the Rule, it is the intention of the Commission to request that the Ontario Lieutenant Governor in Council amendsection 161 of the Regulation under the Act to the extent that it is in conflict with the proposed Rule. Section 161 of the Regulation requires that documentsthat must be signed or certified be manually signed. The Commission will ask the Lieutenant Governor in Council to amend that portion of section 161appearing before clause (a) by adding a reference to the proposed Rule so that the words appearing before clause (a) will read "Except as otherwise provided inthe Act, section 11, 174 or 181 of this Regulation, the Rule entitled "In the Matter of Certain Reporting Issuers", [1980], OSCB 166 or Rule 55-502 FacsimileFiling Or Delivery Of Insider Reports,".

The Commission also notes that in a Rule adopted earlier this year ((1996), 19 OSCB 821), it replaced Form 36 of the Act with a new form of insider report -Form 55-501F. Sections 173 and 174 of the Regulation still refer to Form 36. The Commission will also ask the Lieutenant Governor in Council to replacereferences to Form 36 in those sections with references to Form 55-501F.

Comments

Interested parties are invited to make written submissions with respect to the proposed Rule. Submissions received by April 28, 1997 will be considered.

Submissions should be made in duplicate and delivered to the attention of

c/o Daniel P. Iggers, SecretaryOntario Securities Commission20 Queen Street WestSuite 800, Box 55Toronto, Ontario M5H 3S

A diskette containing the submissions (in DOS or Windows format, preferably WordPerfect) should also be submitted. As the Act requires that a summary ofwritten comments received during the comment period be published, confidentiality of submissions cannot be maintained.

Questions may be referred to:

Cathy SingerGeneral CounselOntario Securities Commission(416) 593-8082

Proposed Rule

The text of the proposed Rule follows.

DATED: January 24, 1997.

1.1 Facsimile Signatures - A report required or permitted to be filed or delivered under section 107, 108 or 109 of the Act may contain the facsimile signature ofthe person or company signing the report.

1.2 Facsimile Filings and Delivery - A person or company may deliver or file a report under section 107, 108 or 109 of the Act by sending the report to theCommission by way of facsimile at the number specified by the Commission.

1.3 Filing or Delivery For Purposes of the Act - The sending of a report to the Commission by way of facsimile under section 1.2 constitutes

(a) if the report is required or permitted to be filed under the Act, the filing of that report under the Act; and

(b) if the report is required or permitted to be delivered under the Act, the delivery of that report.

1.4 Date of Filing - A report sent by facsimile under section 1.2 is considered to be filed or delivered on the day that the facsimile transmission of the report iscompleted.