CSA Notice: 55-301 - Filing Insider Reports By Facsimile and Exemption where Minimal Connection to Jurisdiction

Background

The Information Technology Committee of the CSA is currently exploring several initiatives to improve the system for filing insider reports. One proposal underconsideration is a system that would allow insiders to file reports electronically through the Internet. Electronic filing would allow for the creation of acomprehensive insider reporting database that could be made accessible to the public through a CSA Website and perhaps through commercial informationservices. Over the longer term, the Committee will be considering the possibility of moving toward real-time insider reporting, possibly utilizing the electronictrading systems of the exchanges.

Filing by facsimile

Effective November 1, 1995, the British Columbia Securities Commission began accepting insiders' monthly trading reports by facsimile. For hundreds ofinsiders, this made filing more convenient since the Commission exempted them from the requirement to file original manually signed insider reports.

Effective January 24, 1997 certain other CSA jurisdictions will accept insider reports filed by facsimile. This is an interim measure pending the longer terminitiatives undertaken by the Information Technology Committee of the CSA.

The following securities regulators have issued orders by which they will accept insider reports filed by facsimile at the following numbers:

British Columbia Securities Commission(604) 775-3129

Alberta Securities Commission(403) 422-0777

Saskatchewan Securities Commission (306) 787-5899

Manitoba Securities Commission (204) 945-4508

Commission des valeurs (514) 873-3120

mobilières du Québec

Nova Scotia Securities Commission (902) 424-2261

Newfoundland Securities Commission (709) 729-6187

Details of the orders issued by each of the above securities regulators are set out on Schedule A to this notice.

The Ontario Securities Commission is concurrently publishing for comment a notice of proposed Rule 55-502 which, if adopted, would allow an insider to fileinsider reports by facsimile. Until such proposed rule is adopted, insiders must file their reports in accordance with existing requirements.

In new Brunswick, Prince Edward Island, Northwest Territories and Yukon there is no legislative requirement to file insider reports.

Under the exemption orders insiders who file by facsimile must:

prepare their reports on the usual insider reporting form,

prepare clear and legible reports,

send them only to the specified fax line, and

retain the original report and the fax confirmation slip.

Securities legislation in some jurisdictions requires insiders to report their trades 10 days after month end. Securities legislation in other jurisdictions requiresinsiders to report 10 days after the trade. We expect that insiders will file their reports with all securities regulators (subject to the exemption set out below) bygroup fax to meet the earlier period, 10 days after trade.

Exemption where minimal connection to jurisdiction

In Manitoba, Saskatchewan, and Nova Scotia the exemption orders totally exempt certain insiders from the requirement to file any insider reports in thosejurisdictions. These "minimal connection" exemptions are available where an insider:

1. is subject to reporting requirements in another jurisdiction in Canada that are similar to the reporting requirements to the jurisdiction providing the exemption,and

2. is not in default of the filing requirements in the other jurisdiction, and

the reporting issuer

3. is not incorporated, organized or continued under the laws of the jurisdiction that is providing the exemption,

4. does not have its head office in the jurisdiction, and

5. does not have its securities listed on an exchange in the jurisdiction.

In addition, in Nova Scotia, the reporting issuer must not be a reporting issuer whose Designated Jurisdiction is Nova Scotia under the Memorandum ofUnderstanding for Expedited Review of Short Form Prospectuses and Renewal AIFs between the provincial and territorial securities regulators of Canada or areporting issuer that has been notified by the Director of Securities that its insiders cannot rely on the order.

The minimal connection exemptions are available automatically to an insider who meets the conditions. There is no notice or other filing requirement.

Insiders who fit within the minimal connection exemptions should not file insider reports in Saskatchewan, Manitoba and Nova Scotia. The securities regulatorsin these jurisdictions do not want their fax machines tied up with insider reports that are not required to be filed there.

Please set up your group fax number for filing insider reports to include only British Columbia, Alberta, Quebec and Newfoundland.

For further information please contact:

British Columbia Securities Commission
Deadra Robson
Supervisor Insider Reporting
(604) 660-4873

Alberta Securities Commission
Bonny Beswick
Information Officer
(403) 297-4296

Saskatchewan Securities Commission
Ian McIntosh
Deputy Director, Corporate Finance
(306) 787-5867

Manitoba Securities Commission
Doug Brown
Assistant Counsel
(204) 945-0605

Ontario Securities Commission
Cathy Singer
General Counsel
(416) 593-8082

Commission des valeurs mobilières du Québec
Sylvie Lalonde
Financial Analyst
(514) 873-5009 ex. 328

Nova Scotia Securities Commission
Norman H. Clair
Staff Counsel
(902) 424-7768

Newfoundland Securities Commission
Grant Janes
Administrative Officer
(709) 729-4189

January 24, 1997

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SCHEDULE A

Details of Orders Which Permit Insiders to File their Reports by Fax

British Columbia Securities Commission - Blanket Order #95-5 Dated October 26, 1995

Alberta Securities Commission - OR#96/12/ dated December 5, 1996

Saskatchewan Securities Commission - General Ruling/Order 43 dated December 3, 1996

Manitoba Securities Commission - Order No. 1638 dated January 13, 1997

Commission des valeurs mobilières du Québec - Decision n° 96-C-0556 dated December 11, 1996

Nova Scotia Securities Commission - Blanket Order No. 43 dated January 9, 1997

Newfoundland Securities Commission - Order and Blanket Ruling dated December 17, 1996