Points International Ltd.
Headnote
National Policy 11-203 Process For Exemptive Relief Applications in Multiple Jurisdictions - section 2.8 of NI 44-101 -- notice of intention to be qualified to file a short form prospectus -- relief from minimum 10-day period -- issuer believed it was eligible under transitional provisions in subsection 2.8(4) of NI 44-101 to file a short form prospectus without first filing a notice of intention - issuer has previously filed annual information forms -- issuer has current annual information form.
Applicable Legislative Provisions
National Instrument 44-101 Short From Prospectus Distributions, ss. 2.8(1), 8.1.
May 27, 2008
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
ONTARIO
(the Jurisdiction)
AND
IN THE MATTER OF
THE PROCESS FOR EXEMPTIVE RELIEF
APPLICATIONS IN MULTIPLE JURISDICTIONS
AND
IN THE MATTER OF
POINTS INTERNATIONAL LTD.
(the Filer)
DECISION
Background
The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) for an exemption pursuant to section 8.1 of National Instrument 44-101 Short Form Prospectus Distributions (NI 44-101) from the requirement, contained in section 2.8 of NI 44-101, to file a notice declaring its intention to be qualified to file a short form prospectus (a Notice of Intention) at least ten business days prior to the filing of its first preliminary short form prospectus (the Exemption Sought).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
(a) the Ontario Securities Commission is the principal regulator for this application, and
(b) the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in each of British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, Nova Scotia, New Brunswick, Prince Edward Island, and Newfoundland and Labrador.
Interpretation
Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless they are otherwise defined.
Representations
This decision is based on the following facts represented by the Filer:
1. The Filer is a corporation existing under the Canada Business Corporations Act. The principal executive offices of the Filer are located at 179 John Street, 8th Floor, Toronto, Ontario M5T 1X4.
2. The common shares of the Filer are listed on the Toronto Stock Exchange and are quoted in the United States on the Over the Counter Bulletin Board system.
3. Based on the price under the Offering (defined below), the market capitalization of the Filer is approximately $198 million.
4. The Filer currently is a reporting issuer in Ontario, British Columbia and Alberta. The Filer has filed the required continuous disclosure documents with the securities commissions or similar regulatory authorities in each of the other provinces of Canada and will become a reporting issuer in those provinces upon the issuance of a receipt on behalf of such provinces for the (final) prospectus filed in connection with the Offering.
5. The Filer is a foreign private issuer subject to reporting requirements under the 1934 Act, as amended.
6. On May 21, 2008, the Filer announced that it and a selling shareholder (Points Investments, Inc., a wholly owned subsidiary of IAC/InteractiveCorp.) have entered into an agreement (the Bought Deal Letter) for a $48.6 million bought deal offering (the Offering) in Canada with a syndicate of underwriters led by RBC Dominion Securities Inc.
7. To rely on the exemption contained in section 7.1 of NI 44-101 for solicitations of expressions of interest in connection with a bought deal, the Filer is required to file and obtain a receipt for a preliminary prospectus in respect of the Offering no later than May 27, 2008.
8. The Bought Deal Letter also requires that the Filer file and obtain a receipt for a preliminary prospectus in respect of the Offering no later than May 27, 2008. In addition, the Bought Deal Letter requires that the Filer use its best efforts to file and obtain a receipt for a (final) prospectus in respect of the Offering within five business days (and, in any event, to do so within six business days) after obtaining a receipt for the preliminary prospectus in respect of the Offering.
9. In the absence of the Exemption Sought, the Filer will not be qualified to file the preliminary prospectus in respect of the Offering until June 9, 2008 (the Permitted Filing Date).
10. Subsection 2.8(1) of NI 44-101 provides that an issuer is not qualified to file a short form prospectus unless it has filed a Notice of Intention to be qualified to file a short form prospectus at least ten business days prior to the issuer filing its first preliminary short form prospectus. For the purposes of section 2.8, if, on December 29, 2005, an issuer had a current annual information form, the issuer is deemed to have filed a notice on December 14, 2005 declaring its intention to be qualified to file a short form prospectus pursuant to subsection 2.8(4) of NI 44-101.
11. The Filer believed that it was currently eligible to file a short form prospectus in respect of the Offering, without first filing a Notice of Intention, under the transitional provisions in subsection 2.8(4) of NI 44-101. While the Filer did have a current annual information form as at December 29, 2005, that annual information form was not filed under NI 44-101, and the Filer is not listed on the lists of issuers grandfathered under section 2.8 of NI 44-101 that were previously published by the principal regulator.
12. The Filer will not satisfy the requirements in subsection 2.8(1) on May 27, 2008 and will not be qualified to file the preliminary prospectus in respect of the Offering at that time, unless the Exemption Sought is granted.
13. Since 2002, the Filer has always filed an annual information form. The Filer's most current annual information form is dated March 19, 2008.
14. The Filer has represented that delaying its filing of the preliminary prospectus in respect of the Offering until the Permitted Filing Date will preclude the Filer from complying with the terms of the Bought Deal Letter and from relying on the exemption contained in section 7.1 of NI 44-101 and will cause significant prejudice to the Filer.
Decision
The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.
The decision of the principal regulator under the Legislation is that the Exemption Sought is granted.