Notice: NI - 71-101 & 71-801 - The Multi Jurisdictional Disclosure System

 

NOTICE OF PROPOSED NATIONAL INSTRUMENT 71-101,
COMPANION POLICY 71-101CP,
RULE 71-801
AND FORM 71-101F1
THE MULTIJURISDICTIONAL DISCLOSURE SYSTEM

Substance and Purpose of Proposed National Instrument, Companion Policy, Rule 71-801 and Form 71-101F1

The purpose of the proposed National Instrument, Companion Policy, Rule 71-801 and Form 71-101F1 is to reformulate the multijurisdictional disclosuresystem, a joint initiative that was implemented in 1991 by the Canadian Securities Administrators ("CSA") and the Securities and Exchange Commission of theUnited States (the "SEC") to reduce duplicative regulation in cross-border offerings, issuer bids, take-over bids, business combinations and continuous disclosureand other filings. The multijurisdictional disclosure system ("MJDS") implemented in Canada is intended to remove unnecessary obstacles to certain distributionsof securities of U.S. issuers in Canada and to facilitate take-over and issuer bids and business combinations involving securities of U.S. issuers having less than aspecified percentage of Canadian securityholders, while ensuring that Canadian investors remain adequately protected.

Proposed National Instrument 71-101, Companion Policy 71-101CP, Rule 71-801 and Form 71-101F1 are initiatives of the CSA. The proposed NationalInstrument is expected to be adopted as a rule in each of Ontario, Alberta, British Columbia and Nova Scotia, as a Commission regulation in Saskatchewan, andas a policy in each of the other jurisdictions represented by the CSA. The proposed Companion Policy is expected to be implemented as a policy in each of thejurisdictions represented by the CSA. Rule 71-801 is the local rule implementing National Instrument 71-101 in Ontario. The proposed National Instrument,Companion Policy, Rule 71-801 and Form 71-101F1 are derived from and substantially similar to National Policy Statement No. 45 ("NP45") and the rule orblanket ruling implementing NP45 in a jurisdiction. In Ontario, the proposed National Instrument, Companion Policy, Rule 71-801 and Form 71-101F1 arederived from the Rule "In the Matter of Regulation 910, R.R.O. 1980 as amended and In the Matter of the Multijurisdictional Disclosure System which cameinto effect on March 1, 1997 and which was published at (1997), 20 OSCB 1219. That Rule incorporated by reference the Blanket Ruling of the same name(1991), 14 OSCB 2863 and National Policy Statement No. 45 (1991), 14 OSCB 2889, as amended. In Ontario that Rule expires on the coming into force of theNational Instrument.

Proposed National Instrument 71-101 contains the mandatory aspects of NP45 and the accompanying rule or blanket ruling. The non-mandatory aspects ofNP45 that are interpretive in nature or describe the administrative processes of the Canadian securities regulatory authorities are included in proposedCompanion Policy 71-101CP. Proposed Rule 71-801 contains the exemptions from the requirements of the Securities Act (Ontario) and rules made under thatAct necessary to implement National Instrument 71-101. The substance of the existing MJDS has not been materially amended other than to removereconciliation of financial statements to International Accounting Standards as an alternative to reconciliation to Canadian generally accepted accountingprinciples for distributions of equity securities and non-investment grade debt and preferred shares and to clarify procedures in proposed Companion Policy71-101CP for U.S. only offerings under the U.S. multijurisdictional disclosure system. The notes to the text of the National Instrument, Companion Policy, Ruleand Form reference other changes, most of which have been made to update the references in the National Instrument, Companion Policy, Rule and Form toother regulatory instruments amended as part of the reformulation process. The proposed National Instrument, Companion Policy, Rule and Form are publishedin a three column format, the left hand column sets out the text of the proposed National Instrument, Companion Policy, Rule or Form, the middle column setsout the corresponding text from NP 45 and the accompanying rule or blanket ruling and the right hand column contains explanatory notes.

Terms used in the proposed Companion Policy that are defined or interpreted in the proposed National Instrument or a definition instrument in force in thejurisdiction and not otherwise defined in the proposed Companion Policy should be defined or interpreted in accordance with the National Instrument or thedefinition instrument, unless the context otherwise requires.

CSA Approach to Reformulation

The CSA are of the view that the regulatory regime established by NP45 has operated efficiently and with minimal difficulties since its inception and that majorchanges are not required at this time to the policy rationale underlying NP45 or the concepts in NP45. Accordingly, the intent of the CSA in preparing theproposed National Instrument, Companion Policy, implementing law of a jurisdiction and Form was to ensure that these instruments remain largely consistentwith the regulatory regime in place for issuers eligible to use the MJDS.

Summary of Proposed National Instrument, Companion Policy, Implementing Rule and Form

The MJDS permits public distributions of securities of U.S. issuers that meet specified eligibility criteria to be made in Canada on the basis of disclosuredocuments prepared in accordance with U.S. federal securities laws (with certain additional Canadian disclosure). A public distribution of securities of a U.S.issuer may be made under the MJDS both in Canada and in the United States or in Canada only.

The MJDS also reduces disincentives to the extension to Canadian securityholders of rights offerings by U.S. issuers by permitting such rights offerings to bemade in Canada on the basis of U.S. disclosure documents. Similarly, it facilitates the extension to Canadian securityholders of U.S. issuers of take-over bids,issuer bids and business combinations in the circumstances contemplated by the proposed National Instrument. The MJDS permits such transactions to be madein Canada generally in the same manner as in the U.S. and on the basis of U.S. disclosure documents.

Further, the MJDS permits U.S. issuers to use U.S. continuous disclosure documents in Canada in lieu of Canadian documents and exempts insiders of U.S.issuers from the requirements to file insider reports provided the required filings are made with the SEC.

The proposed National Instrument has 21 parts.

Part 1. Section 1.1 contains the definitions of terms and phrases used in the proposed National Instrument that are not defined in or interpreted under adefinition instrument in force in a jurisdiction. National Instrument 14-101 Definitions1 sets out definitions for commonly used terms and definitions of termsused in more than one national instrument and should be read together with the proposed National Instrument.

Most of the definitions contained in section 1.1 are based on, and are very close to, the definitions contained in NP45. However, certain of the definitions arenew and include definitions of terms included in NP45 but not defined in that policy. There are also some amendments to the definitions taken from NP45.

Part 2. Part 2 contains general provisions relating to the timing of filing of documents under the National Instrument and sets out the conditions that must besatisfied for a "successor issuer" to satisfy certain eligibility criteria required in order to distribute securities under the proposed National Instrument.

Part 3. Part 3 sets out the general eligibility criteria for U.S. issuers to satisfy in order to distribute securities under the National Instrument. These criteria varydepending on the type of securities being offered. Section 3.4 provides that a preliminary MJDS prospectus, an amendment to a preliminary MJDS prospectus, aMJDS prospectus and an amendment to a MJDS prospectus is a preliminary prospectus, an amendment to a preliminary prospectus, a prospectus and anamendment to a prospectus, respectively, for the purposes of securities legislation.

Part 4. Part 4 contains the provisions in the National Instrument relating to the form and content of a MJDS prospectus. It sets out the legends and disclosurerequired in a MJDS prospectus and in section 4.6 contains the provisions relating to reconciliation of financial statements. As indicated previously, the option ofreconciling financial statements to International Accounting Standards instead of to Canadian generally accepted accounting principles has not been carriedforward into the proposed National Instrument. Sections 4.7 through 4.10 address the forms of certificate for a MJDS prospectus, including a new requirementin Section 4.7 to include a certificate signed by each person or company that is a promoter or guarantor of the securities distributed by the MJDS prospectus.Section 4.11 allows for the signing of certificates by an agent.

Part 5. Part 5 contains the requirements for specifying a principal jurisdiction and notifying the principal jurisdiction if the SEC is selecting for review a filingmade under the MJDS.

Part 6. Part 6 contains the requirements relating to the filing in the principal jurisdiction and other jurisdictions of a MJDS prospectus and related documentssuch as consents, property reports, appointments of agents for service, powers of attorney, notification of effectiveness and exhibits to registration statements.

Part 7. Part 7 contains the provisions relating to amending or supplementing a MJDS prospectus and provisions relating to rule 415 prospectus supplements andrule 430A pricing prospectuses.

Part 8. Part 8 contains the provisions for disseminating the MJDS prospectus to offerees and purchasers of the securities being distributed under the MJDSprospectus.

Part 9. Part 9 provides an exemption from the requirement to register as a dealer for trades made by a U.S. issuer under the National Instrument of a right topurchase additional securities of its own issue issued to its existing securityholders and of the securities issued upon the exercise of the right.

Part 10. Part 10 contains certain relief from the provisions of proposed National Instrument 33-105 Underwriting Conflicts which will reformulate certainprovisions of Canadian securities legislation dealing with underwriting conflicts provided that (a) the aggregate of the portions of the distribution underwritten byindependent underwriters and their affiliated parties is not less than the portions of the distribution that are underwritten by non-independent underwriters and (b)one of the independent underwriters underwrites a portion of the distribution that is not less than the largest portion of the distribution underwritten by anon-independent underwriter.

Part 11. Part 11 provides relief from the provisions in securities legislation regarding representations as to the listing or quotation of securities and from theprovision against soliciting expressions of interest if certain conditions are satisfied. These conditions are similar to the condition in the blanket rulings in place inthe various jurisdictions implementing NP 45. Part 11 also exempts distributions under NI 71-101 from other prospectus related rules.

Part 12. Part 12 contains the general rules for take-over bids, issuer bids and securities exchange bids for securities of U.S. issuers by a bidder using the NationalInstrument. Section 12.1 contains the general eligibility criteria to use the National Instrument for bids. Section 12.2 provides that a MJDS take-over bidcircular, MJDS issuer bid circular, MJDS directors' circular, and a MJDS director's or officer's circular is a take-over bid circular, issuer bid circular, directors'circular, and individual director's or officer's circular, respectively, for purposes of securities legislation. Section 12.3 contains the eligibility criteria in order touse the National Instrument for a securities exchange bid. Section 12.4 imposes the requirement to comply with certain sections of the Securities Exchange Actof 1934 of the United States when making a take-over bid or issuer bid under the National Instrument. Section 12.5 sets out the additional information, legendsand certificates required to be inserted in a take-over bid circular or issuer bid circular if the National Instrument is being relied on in connection with a bid. Part12 also contains the bid circular filing and dissemination to securityholders procedures.

Part 13. Part 13 contains the eligibility requirements for distributing securities of a successor issuer in connection with a business combination. It also sets outthe form and content requirements for disclosure documents in connection with a business combination.

Part 14. Part 14 contains the provisions that allow a U.S. issuer to satisfy the requirements of securities legislation relating to the issuance of a news release andmaterial change report upon the occurrence of a material change using its U.S. disclosure. That Part allows an issuer to comply with the requirements of therelevant stock exchange or Nasdaq for news releases and to comply with the requirements of U.S. federal securities laws for material change reports.

Part 15. Part 15 contains the provisions setting out how a U.S. issuer may fulfil the requirements of securities legislation relating to the preparation, certification,filing and sending of interim financial statements, annual financial statements and auditor's reports and the requirements of securities legislation to file annualreports, annual information forms and management's discussion and analysis of financial condition and results of operations. Generally, a U.S. issuer can complywith these requirements by complying with the requirements of U.S. federal securities laws and filing the documentation and in certain cases sending thedocumentation to securityholders.

Part 16. Part 16 sets out how a U.S. issuer and a person or company other than the issuer may fulfil the requirements relating to information circulars, proxiesand proxy solicitation. Again this is done generally by complying with the requirements of the U.S. federal securities laws and filing and sending the documentsto shareholders.

Part 17. Part 17 exempts an insider of a U.S. issuer from the requirement to file insider reports if the insider complies with the requirements of U.S. federalsecurities laws and files with the SEC on a timely basis any insider reports required to be filed with the SEC.

Part 18. Part 18 sets out how a U.S. issuer may fulfil the requirements of securities legislation relating to communications with, delivery of materials to andconferring voting rights upon non-registered holders of its securities who hold their interests in their securities through one or more intermediaries. This can bedone by complying with the requirements of Rule 14a-13 under the Securities Exchange Act of 1934 for any Canadian clearing agency and any intermediarywhose last address as shown the books of the issuer is in Canada and complying with the requirements of National Instrument 54-101 Communication withBeneficial Owners of Securities of a Reporting Issuer with respect to reasonable fees payable to intermediaries in a local jurisdiction.

Part 19. Part 19 provides that the requirements of the legislation of the local jurisdiction applicable to trust indentures, for debt outstanding or guaranteed underthe indenture, including a requirement that a person or company appointed as a trustee under the indenture be resident or authorized to do business in the localjurisdiction, do not apply to distributions made under the National Instrument if the trust indenture is subject to and complies with the Trust Indenture Act of1939 of the United States and at least one person or company appointed as trustee under the indenture satisfies certain conditions.

Part 20. Part 20 provides that certain proposed national instruments relating to disclosure of financial information and accounting do not apply to a U.S. issuerdistributing securities or making a bid or filings in accordance with the National Instrument.

Part 21. Part 21 contains the exemption provision in the National Instrument.

Appendix and Form The Appendix to the National Instrument contains the forms of prospectus certificate for a rule 415 offering. Form 71-101F1 contains theforms of submission to jurisdiction and appointment of agent for service of process in connection with prospectus offerings, take-over bids and issuer bids andtrust indentures.

The proposed Companion Policy has four parts.

Part 1. Part 1 contains commentary describing the background to the MJDS and describing the purpose behind the National Instrument.

Part 2. Part 2 contains an overview of the MJDS and addresses such items as its application, the form of regulatory review, the fact that it does not affectstatutory liability, and the requirement for a U.S. issuer to comply in full with all applicable U.S. requirements.

Part 3. Part 3 relates to distributions of securities of U.S. issuers under a MJDS prospectus and bids for securities of U.S. issuers, business combinations,continuous disclosure, proxies and proxy solicitation, insider reporting and communication with beneficial owners of securities of a reporting issuer. It providescommentary on eligibility requirements, the public interest jurisdiction of the Canadian securities regulatory authorities, form, content and format of a MJDSprospectus, reconciliation of financial statements, underwriters' certificates in rights offerings, distributions made in Quebec, amendment and supplementprocedures, advertising, review and receipt procedures, rule 415 offerings and rule 430A offerings, certification, disclosure of interest of an underwriter in aMJDS prospectus, conflicts of interest, trust indenture requirements, fees and dealer registration requirements for rights offerings. In respect of take-over bids, itdescribes certain requirements of securities legislation that continues to apply such as the "early warning system", requirements relating to going privatetransactions, and, depending on the percentage of shares held by Canadians, pre- bid integration and valuation requirements. In respect of businesscombinations, it provides a commentary on the application of the National Instrument and its interrelationship with securities legislation. In respect ofcontinuous disclosure, proxies and proxy solicitation, insider reporting and communication with beneficial owners of securities of a reporting issuer, it providescommentary on the National Instrument and describes certain provisions of securities legislation that do not apply.

Part 4. Part 4 relates to offerings by Canadian issuers under the U.S. multijurisdictional disclosure system. Section 4.1 explains that the exemption from theTrust Indenture Act of 1939 with respect to a trust indenture filed with the SEC in connection with an offering of securities by a Canadian issuer is subject to thetrust indenture requirements of Canadian legislation applying. Subsection 4.2(1) explains that issuers distributing securities in the U.S. under the U.S.multijurisdictional disclosure system may be subject to a requirement to file a prospectus in Canada in the circumstances set out. Subsection 4.2(2) and Section4.3 relate to U.S. only offerings under the U.S. multijurisdictional disclosure system and clarify the regime currently in place under NP 45. Subsection 4.2(2)explains that an issuer located in British Columbia, Alberta or Quebec is subject to a requirement to file a prospectus with the Canadian securities regulatoryauthority in British Columbia, Alberta or Quebec, respectively. It also sets out the mechanism whereby an issuer that files a Form F-9 or F-10 under theSecurities Act of 1933 of the United States in connection with an offering in the United States under the U.S. multijurisdictional disclosure system can have theregistration statement become effective before the end of the seven day calendar period under the 1933 Act. Section 4.3 sets out the mechanism whereby anissuer, other than an issuer located in British Columbia, Alberta or Quebec, that files a Form F-9 or F-10 can have the registration statement become effectivebefore the end of the seven day calendar period under the 1933 Act. The issuer may select a review jurisdiction, file the registration statement with the Canadiansecurities regulatory authority in the review jurisdiction contemporaneously with the filing of the registration statement with the SEC and obtain a notification ofclearance from the regulator in the jurisdiction and advise the SEC of the issuance of the notification of clearance.

Proposed Rule 71-801 has five parts.

Part 1. Part 1 states that each term used in the rule that is defined or interpreted in Part 1 of National Instrument 71-101 has the meaning ascribed to it in thatPart. It also defines National Instrument 71-101.

Part 2. Part 2 provides exemptions for distributions by MJDS prospectus from the form, content and circumstances of filing requirements relating to anamendment to a preliminary MJDS prospectus or a MJDS prospectus, the time period that must elapse before the distribution of additional securities may beproceeded with, the duration of a distribution and the length of the waiting period. It also provides an exemption for MJDS distributions from Rule 41-501General Prospectus Requirements and Rule 48-502 Underwriters' Options.

Part 3. Part 3 provides exemptions from certain requirements of the securities legislation and rules made under that Act for take-over bids and issuer bids forsecurities of U.S. issuers made in accordance with Part 12 of National Instrument 71-101. It also sets out the application of the securities legislation to MJDSdirectors' circulars and MJDS director's or officer's circulars.

Part 4. Part 4 provides an exemption for U.S. issuers filing financial statements under section 15.1 of National Instrument 71-101 from the requirement underSections 77 and 78 of the Ontario Act to certify financial statements. It also provides an exemption from Rule 51-501 Annual Information Form andManagement's Discussion and Analysis for U.S. issuers that file and send an annual report in accordance with section 15.2 of National Instrument 71-101. Anexemption is also provided from proposed Rule 54-501 Prospectus Disclosure in Information Circulars: Amalgamations, Arrangements, Mergers andReorganizations for proxy materials filed and delivered under section 16.1 or 16.2 of National Instrument 71-101.

Part 5. Part 5 states that a submission to jurisdiction and appointment of agent for service of process shall be prepared in accordance with Form 71-101F1.

Authority for the Proposed National Instrument, Implementing Rule and Form

In those jurisdictions in which the National Instrument, implementing rule and form are to be adopted or made as a rule or regulation, the securities legislation ineach of those jurisdictions provides the securities regulatory authority with rule- making or regulation-making authority in respect of the subject matter of theproposed National Instrument.

In Ontario, the following sections of the Securities Act (Ontario) (the "Ontario Act") provide the Ontario Securities Commission (the "Commission") withauthority to make the proposed National Instrument, Rule 71-801 and Form 71- 101F1. Paragraph 143(1) 36 of the Ontario Act authorizes the Commission tomake rules varying the application of the Act to foreign issuers to facilitate distributions, compliance with requirements applicable or relating to reporting issuersand the making of take-over bids, issuer bids, insider bids, going private transactions and related party transactions where the foreign issuers are subject torequirements of the laws of other jurisdictions that the Commission considers are adequate in light of the purposes and principles of the Act. Paragraph 143(1)8of the Ontario Act authorizes the Commission to make rules providing for exemptions from the registration requirements under the Ontario Act. Paragraph143(1) 16 of the Ontario Act authorizes the Commission to make rules varying the application of the Ontario Act to establish procedures for or requirements inrespect of the preparation and filing of preliminary prospectuses and prospectuses and the issuing of receipts therefor that facilitate or expedite the distribution ofsecurities or the issuing of the receipts. Paragraph 143(1)20 of the Ontario Act authorizes the Commission to make rules providing for exemptions from theprospectus requirements under the Ontario Act. Paragraph 143(1) 22 of the Ontario Act authorizes the Commission to make rules prescribing requirements inrespect of the preparation and dissemination and other use, by reporting issuers, of documents providing for continuous disclosure that are in addition to therequirements under the Ontario Act. Paragraph 143(1) 23 of the Ontario Act authorizes the Commission to make rules exempting reporting issuers from anyrequirement of Part XVIII (Continuous Disclosure) of the Ontario Act if certain conditions are satisfied. Paragraph 143(1) 24 of the Ontario Act authorizes theCommission to make rules requiring issuers or other persons and companies to comply with Part XVIII or rules made under paragraph 143(1) 22. Paragraph143(1) 25 of the Ontario Act authorizes the Commission to make rules prescribing requirements in respect of financial accounting, reporting and auditing for thepurposes of the Ontario Act. Paragraph 143(1) 26 of the Ontario Act authorizes the Commission to make rules prescribing requirements for the validation andsolicitation of proxies and paragraph 143(1) 27 of the Ontario Act authorizes the Commission to make rules providing for the application of Part XVIII(Continuous Disclosure) and Part XIX (Proxies and Proxy Solicitation) in respect of registered holders or beneficial owners of voting securities or equitysecurities of reporting issuers or other persons or companies on behalf of whom the securities are held. Under paragraph 143(1) 28 of the Ontario Act theCommission may make rules regulating take-over bids, issuer bids, insider bids, going private transactions and related party transactions. Paragraph 143(1) 30 ofthe Ontario Act authorizes the Commission to make rules providing for exemptions from any requirement of Part XXI (Insider Trading and Self-Dealing) of theOntario Act. Paragraph 143(1)39 of the Ontario 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 therules and all documents determined by the regulations or the rules to be ancillary to the documents. Paragraph 143(1) 42 of the Ontario Act authorizes theCommission to make rules establishing conditions for any exemption that the Commission is authorized to give by subsection 46(4) of the Business CorporationsAct (Ontario) and, despite that provision, dispensing with applications for exemption when the conditions are met.

Alternatives Considered

The CSA considered whether to maintain the alternative of reconciliation of financial statements to International Accounting Standards in distributions by eligibleU.S. issuers of equity or non-investment grade debt or preferred shares and concluded that at this stage in the development of International AccountingStandards a reconciliation to International Accounting Standards in some cases may not provide Canadian investors in those securities with sufficient informationto make an informed investment decision and a reconciliation to Canadian generally accepted accounting principles should be required.

Unpublished Materials

In proposing the National Instrument, Companion Policy, implementing rule and form, the CSA have not relied on any significant unpublished study, report,decision or other material.

Anticipated Costs and Benefits

The benefit provided by the proposed National Instrument is the reduction of duplicative regulation and the consequent increased access to the Canadian capitalmarkets by U.S. issuers. The MJDS also facilitates the extension by U.S. issuers of rights offerings to Canadian securityholders and the making of bids for U.S.issuers with Canadian securityholders to Canadian residents. It also may be in the interests of Canadian investors to have greater access to distributions ofsecurities of U.S. issuers. Because of the reciprocal nature of the multijurisdictional disclosure system, an additional benefit for Canadian issuers and sellingsecurityholders offering securities and bidders for the securities of Canadian issuers is the increased access to the U.S. markets provided by the multijurisdictionaldisclosure system implemented by the SEC.

The proposed National Instrument imposes no material costs on U.S. issuers, but rather seeks to reduce costs and duplicative regulation. Based on experience todate under NP45, the CSA believe that the benefits of the proposed National Instrument justify the costs.

Regulations to be Amended - Ontario

In Ontario, the Commission proposes to amend subsections 1(4), 2(2) and 2(5), subsections 176(1), 176(3), 176(9) and 177(0.1), sections 178, 179, 180 and181, sections 189, 193, 194 and 195, subsection 201(0.1) and section 203 of the Regulation under the Ontario Act (the "Ontario Regulation") to amend thereferences to NP45 and the rule accompanying it to refer to NI 71-101 and Rule 71-801 and to amend subsection 13(2) of Schedule 1 to the Ontario Regulationto refer to Companion Policy 71-101CP.

Related Instruments

The proposed National Instrument and proposed Companion Policy are related to each other as they deal with the same subject matter. The proposedCompanion Policy relates to Parts XI, XIII, XV, XVI, XVIII, XIX, XX, XXI and XXIII of the Ontario Act and Parts I, II, III, V, VIII, IX, X, XI and XIII ofthe Regulation to the Ontario Act.

In certain jurisdictions including Ontario, proposed implementing rules allowing for the operation of the National Instrument in those provinces are beingpublished for comment concurrently with the publication of the National Instrument. These rules vary certain sections of the legislation in those jurisdictions andprovide that certain other provisions of the rules adopted by those provinces do not apply to a prospectus, take-over bid circular or issuer bid circular filed inaccordance with the National Instrument.

In the other jurisdictions, proposed Blanket Rulings allowing for the operation of the National Instrument in those jurisdictions will be published for commentconcurrently with the publication of the National Instrument. These Blanket Rulings exempt issuers and underwriters from certain provisions of the securitieslegislation of those jurisdictions.

Comments

Interested parties are invited to make written submissions with respect to the proposed National Instrument and Companion Policy. Submissions received byMarch 5,1998 will be considered.

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 CommissionAlberta Securities CommissionSaskatchewan Securities CommissionThe Manitoba Securities CommissionOntario Securities CommissionOffice of the Administrator, New BrunswickRegistrar of Securities, Prince Edward IslandNova Scotia Securities CommissionSecurities Commission of NewfoundlandSecurities Registry, Government of the Northwest TerritoriesRegistrar of Securities, Government of the Yukon Territoryc/o Daniel P. Iggers, SecretaryOntario Securities Commission20 Queen Street WestSuite 800, Box 55Toronto, Ontario M5H 3S8Submissions should also be addressed to the Commission desvaleurs mobilières du Québec as follows:Jacques Labelle, General SecretaryCommission des valeurs mobilières du Québec800 Victoria SquareStock Exchange TowerP.O. Box 246, 17th FloorMontréal, Québec H4Z 1G3A diskette containing the submissions (in DOS or Windows format,preferably WordPerfect) should also be submitted. As securitieslegislation in certain jurisdictions requires that a summaryof written comments received during the comment periodbe published, confidentiality of submissions cannot be maintained.Questions may be referred to any of:Veronica SingerPolicy AdvisorBritish Columbia Securities Commission(604) 899-6646Agnes LauDeputy Director, Securities AnalysisAlberta Securities Commission(403) 422-2191Barbara ShourounisDirectorSaskatchewan Securities Commission(306) 787-5645Randee PavalowPolicy CoordinatorOntario Securities Commission(416) 593-8257Rosetta GagliardiPolicy AdvisorCommission des valeurs mobilières du Québec(514) 873-5009 ext. 252Proposed National Instrument, Companion Policy, Implementing Rule and FormThe text of the proposed National Instrument, CompanionPolicy, implementing rule and form follows, togetherwith notes that are not part of the proposedNational Instrument, Companion Policy, implementing rule andform but have been included to provide background and explanation.DATED: December 5, 1997.