Notice of Amendment to National Instrument: NI - 14-101 - National Definitions

NOTICE OF AMENDMENT TO NATIONAL INSTRUMENT 14-101
DEFINITIONS

The Commission has, under section 143 of the Securities Act (the "Act"), amendedNational Instrument 14-101 Definitions (the "Amendment").

The Amendment and the material required by the Act to be delivered to the Minister ofFinance were delivered on March 24, 1999. The Amendment will come into force on July1, 1999 unless the Minister rejects the Amendment or returns it to the Commission forfurther consideration.

Coincident on the coming into force of the National Instrument, the terms "equity security","issuer bid" and "take-over bid" are deleted from Rule 14-501 Definitions. The amendmentto Rule 14-501 Definitions, which came into force on February 13, 1999 provided thatthose terms are deleted from Rule 14-501 on the coming into force of the amendments toNational Instrument 14-101 Definitions.

National Instrument 14-101 Definitions (the "National Instrument"), which was adopted byeach of the jurisdictions of the Canadian Securities Administrators (the "CSA") and cameinto force on April 1, 1997⁽¹⁾, was designed to achieve three purposes. First, the NationalInstrument was intended to provide a national approach to interpretation of nationalinstruments and increase the level of consistency in both the interpretation and applicationof national instruments. Second, the National Instrument was intended to provide aframework of terms the definitions of which the CSA have agreed upon for use in futurenational instruments. Third, the National Instrument set out commonly used terms, suchas "Canadian GAAP", definitions of terms necessary to provide local application of anational instrument such as "securities regulatory authority" and definitions of terms usedin more than one national instrument, although not used as frequently as some of the moregeneral terms.

At the time the National Instrument was published for comment, it was expected to beamended from time to time to add definitions of new terms that meet any of these threecriteria. The purpose of the proposed amendment is to add a number of definitions ofadditional terms to the National Instrument, modify subsection 1.1(2) to refer to one ormore jurisdictions rather than a single jurisdiction and to extend the application of theNational Instruments to Multilateral Instruments. A Multilateral Instrument is an instrumenttypically adopted by more than one CSA member, but not all CSA members.

The proposed Amendment to the National Instrument would add a number of definitionsof new terms to the National Instrument so that those terms would be defined for thepurposes of national instruments. The proposed amendment also changes the referenceto the Northwest Territories in Appendix C of the National Instrument and also modifiesslightly the definitions of "1933 Act" and "1934 Act". The proposed amendment alsoamends section 1.1 to add a reference to "multilateral instruments" so that the NationalInstrument applies to Multilateral Instruments. The proposed amendment also modifiessubsection 1.1(2) to refer to one or more jurisdictions rather than a single jurisdiction.

Most of the terms to be added to the National Instrument through this amendment aregeneric terms that describe specific provisions of Canadian securities legislation in amanner that avoids using specific section numbers of any particular statute and that cantherefore be used in any jurisdiction. Those terms include "adviser registrationrequirement", "dealer registration requirement", "insider reporting requirement","networking notice requirement", "prospectus requirement", "registration requirement" and"underwriter registration requirement". By defining these terms in this manner, nationalinstruments can be drafted to make reference only to these terms without having to list theapplicable provisions of each jurisdiction's securities legislation.

In addition, the proposed amendment would add the terms "equity security", "issuer bid","multilateral instrument", "take-over bid" and "U.S. federal securities laws" to the NationalInstrument.

There were no written comments received by the Commission on the Amendment.

The text of the Amendment follows.

DATED: March 26, 1999.

PART 1 AMENDMENTS

(1) National Instrument 14-101 Definitions is amended by

(a) adding the words "or multilateral instrument" after the words"national instrument" every place they appear in section 1.1except in the definition of "national instrument";

(b) deleting subsection 1.1(2) and replacing it with the following:

(2) A provision or reference within a provision of a national instrument ormultilateral instrument that specifically refers by name to one or morejurisdictions other than the local jurisdiction shall not have any effectin the local jurisdiction, unless otherwise stated in the nationalinstrument or multilateral instrument.;

(c) amending the definition of "1933 Act" in subsection 1.1(3) byadding the words ",as amended from time to time" following theword "America";

(d) amending the definition of "1934 Act" in subsection 1.1(3) byadding the words ",as amended from time to time" following theword "America";

(e) adding the following definition to subsection 1.1(3) after thedefinition of "1934 Act":

"adviser registration requirement" means the requirement insecurities legislation that prohibits a person or company fromacting as an adviser unless the person or company isregistered in the appropriate category of registration undersecurities legislation;

(f) adding the following definitions to subsection 1.1(3) after thedefinition of "CSA":

"dealer registration requirement" means the requirement insecurities legislation that prohibits a person or company fromtrading in a security unless the person or company isregistered in the appropriate category of registration undersecurities legislation;

"equity security" has the meaning ascribed to that term insecurities legislation;

(g) adding the following definitions to subsection 1.1(3) after thedefinition of "implementing law of a jurisdiction":

"insider reporting requirement" means the requirement insecurities legislation for an insider of a reporting issuer to filereports disclosing the insider's direct or indirect beneficialownership of, or control or direction over, securities of thereporting issuer;

"issuer bid" has the meaning ascribed to that term in securitieslegislation;

(h) adding the following definition to subsection 1.1(3) after thedefinition "local jurisdiction":

"multilateral instrument" means an instrument described by theCSA as a multilateral instrument, and adopted or made by thesecurities regulatory authority;

(i) adding the following definition to subsection 1.1(3) after thedefinition of "national instrument":

"networking notice requirement" means the requirement insecurities legislation that a registrant give written notice to thesecurities regulatory authority or regulator before entering intoa networking arrangement;

(j) adding the following definitions to subsection 1.1(3) after thedefinition of "person or company":

"prospectus requirement" means the requirement in securitieslegislation that prohibits a person or company from distributinga security unless a preliminary prospectus and prospectus forthe security have been filed and receipts obtained for them;

"registration requirement" means the requirement in securitieslegislation that prohibits a person or company from trading ina security or acting as an underwriter or an adviser unless theperson or company is registered in the appropriate category ofregistration under securities legislation;

(k) deleting the word "and" following the definition of "securitiesregulatory authority" in subsection 1.1(3) and adding thefollowing definitions to subsection 1.1(3) after the definition of"SRO":

"take-over bid" has the meaning ascribed to that term insecurities legislation;

"underwriter registration requirement" means the requirementin securities legislation that prohibits a person or companyfrom acting as an underwriter unless the person or companyis registered in the appropriate category of registration undersecurities legislation; and

"U.S. federal securities law" means the federal statutes of theUnited States of America concerning the regulation ofsecurities markets and trading in securities and theregulations, rules, forms and schedules under those statutes,all as amended from time to time; and

(l) replacing the words "Securities Registry, Government of theNorthwest Territories" opposite "Northwest Territories" inAppendix C with the words "Registrar of Securities, NorthwestTerritories".

2.1 Effective Date- This Amendment comes into force on July 1, 1999.

Footnotes

1. ¹ In Ontario, published at (1997), 20 OSCB 1727.