Jan. 9 - VSE Policy Amendments
CORPORATE FINANCE SERVICES POLICY AND PROCEDURES MANUAL
NOTICE TYPE: POLICY AMENDMENT
NOTICE DATE: January 8, 1998
Please note the following policy amendment. This information is reflected on the Internet (http://www.vse.ca) and electronic versions of the Corporate Finance Services Policy and Procedures
Manual (the `Manual').
BRITISH COLUMBIA SECURITIES COMMISSION BOR #97/12
- IN THE MATTER OF THE SYSTEM FOR SHORTER HOLD PERIODS WITH AN ANNUAL
INFORMATION FORM
On November 27, 1997, the BCSC issued BOR #97/12, which permits `Qualifying Issuers' as defined in the BOR to issue securities with a 4 month rather than a 12 month hold period where the specified
requirements are met. Further to the BOR, the Exchange has amended the requirement for a 12 month Exchange hold period on such distributions to permit a 4 month hold period where all of the conditions of the BOR have been met.
The amendments affect distributions pursuant to a number of Exchange Policies, including Policies: 13 (Shares for Debt); 17 (Bonuses, Finders' Fees and Commissions) and 18 (Acquisition and Disposition of
Non-Cash Assets) as well as the definition of Market Price.
The following substantive amendments have been made to the Policies. Mere changes in wording referencing the availability of a 4 month hold period for AIF Issuers are not included in this Notice, but
will be included in the replacement pages sent to Manual subscribers.
Definitions:AIF Issuer A Qualifying Issuer as defined in BOR #97/12 that has met all of the conditions specified in BOR #97/12 and is eligible to issue securities with a 4 month, rather than a 12 month, hold period.
Market Price
Means subject to the exceptions noted below, the closing price of the company's listed shares on the trading day before the day the Exchange receives the news release or notice letter from the company's authorized agent (which must be on the agreement day and which, if a notice letter, must be followed as soon as possible by a news release) and if the securities are subject to a twelve month hold period imposed under the Securities Regulation (which securities are required to be legended if the company is an Exchange Issuer), less the following discounts from the closing price:
Closing Price Discount
up to $0.50 25%
$0.51 to $2.00 20%
above $2.00 15%
Appendix 13A - Shares for Debt Checklist:
The chart at Item 3, Nature of Liabilities, has been amended so that the last column entitled Date 12 months from Due Date indicates that if the issuer is an AIF Issuer, that the information provided should
be the date 4 months from the due date.
Policy 16 - Private Placements:
Section 16.1.8 has been amended to add the following reference:
16.1.8 It is important to note that the exemptions are technical in nature and require strict compliance (see Local Policy Statement 3-24 and Interim Local Policy 3-27 for guidance). Companies should also be aware of the strict reporting and filing
requirements with the Securities Commission in addition to the substantive requirements. The above description of common exemptions used in Private Placement transactions is not to be construed as legal advice or relied on for any specific transaction. Legal advice should be sought from a securities lawyer in B.C. and in the jurisdictions in which the placees are resident in order to safeguard the listed company against regulatory enforcement action and/or civil liability. It is the company's responsibility to determine the compatibility of the exemption(s) relied upon and to comply with all related legal requirements.
Appendix 16A - Private Placement Questionnaire and Undertaking:
Section 5, Undertaking has been amended as follows:
To: The Vancouver Stock Exchange
The undersigned has subscribed for and agreed to purchase, as principal, the securities described in section 1 of this Private Placement Questionnaire and Undertaking. (The purchase funds may be
deposited in trust with advancement to the Company subject only to receipt of all necessary regulatory approvals). The undersigned undertakes not to sell or otherwise dispose of any of the said securities so purchased or any securities derived therefrom for a period of twelve months (four months if the issuer is an AIF Issuer
as defined in the Definitions Section of the Manual) from the payment day, without the prior consent of the Vancouver Stock Exchange and any other regulatory body having jurisdiction. The undersigned
acknowledges that all certificates representing the said securities will bear a legend to the effect that the certificates are subject to a the applicable hold period for a period of twelve months.
The undersigned hereby certifies that the said securities are not being purchased as a result of any material information about the Company's affairs that has not been publicly disclosed. The undersigned acknowledges that it is aware that the removal from the securities of any resale restriction after twelve
months the applicable twelve or four months that is imposed solely as a requirement of the Vancouver Stock Exchange will not entitle it to sell the securities if such sale would contravene any other applicable securities legislation or regulation.
TRADING OF RIGHTS AND WARRANTS ON THE EXPIRY DATE
In keeping with the rules of the Toronto Stock Exchange, the Montreal Exchange and the Canadian Depository for Securities, the Exchange will cease trading warrants and rights on VCT at 9:00 am
Vancouver time on the expiry date of such warrants and rights. Additionally, should the expiry or payment time occur before the close of business at the transfer agent, VCT will cease trading at the close of business on the first day preceding the expiry or payment date. It should be noted that Rule C.1.08(f) permits off VCT trades in warrants or rights made in the last 4 days before expiry. The following Exchange Rules have been amended to reflect this procedure:
Rule B.3.31 - Warrants - Public:
The following provision has been added to Rule B.3.31 as section 8:
8. The Exchange will cease trading of warrants on VCT at 9:00 a.m., Vancouver time, on the expiry date.Rule B.3.55 - Trading of Rights:Rule B.3.55 has been amended as follows:
Rights issued pursuant to a rights offering must be transferable and shall be called for trading on the Exchange on the date the shares of the issuer commence trading `ex-rights' and will trade under normal
settlement rules until three trading days before the expiry date of the rights during which time the rights shall trade only on a cash basis. The Exchange will cease trading of rights on VCT at 9:00 a.m., Vancouver time, on the expiry date.Rule B.3.58 - Trading of Warrants:The following provision has been added to Rule B.3.58 as section 8:8.
The Exchange will cease trading of warrants on VCT at 9:00 a.m., Vancouver time, on the expiry date.Rule B.5.21 - Warrants - Public:
The following provision has been added to Rule B.5.21 as section 9:
9. The Exchange will cease trading of warrants on VCT at 9:00 a.m., Vancouver time, on the expiry date.
OTHER AMENDMENTSPolicy 6 - Filing Requirements:
Section 6.10.2 has been amended to so that publication of Form 23s by the Exchange is no longer required before a trade by a control person can take place through VCT. 6.10.2 The Exchange has not established independent policies or filing requirements with respect to insider trading. It does, however, require that before a trade from a control person can take place through VCT, Securities Act Form 23 (Notice of Intention to Sell and Declaration) be publicly disseminated by the Company, and filed with the Exchange in accordance with section 136 of the Securities Rules and notice of its receipt be published by the Exchange.
Policy 13 - Shares for Debt:
Section 13.1.6 has been amended to clarify the Exchange hold period requirement imposed on individuals receiving shares for debt, but using the Securities Act exemption at section 74(2)(9).
13.1.6 a) Section 142(2)(d) of the Securities Rules requires that all securities issued in reliance on the shares for debt exemption in section 128(3) of the Securities Rules, are required to be held for a period of 12 months (or 4 months if the
issuer is an AIF Issuer) from the date on which payment of the debt became due, in addition to other resale restrictions specified.
b) If the hold period under the Securities Rules is less than 12 months, or 4 months for an AIF Issuer, the securities may still be issued at a discount, provided the creditor signs a Private Placement undertaking, which imposes a 12 month hold period (or a 4 month hold period for AIF Issuers) on the securities from the date
of settlement. The shares must be legended accordingly.
c) Where a creditor is receiving shares for debt pursuant to the Securities Act exemption at section 74(2)(9), the Exchange will require the creditor to sign a Private Placement Undertaking which imposes a 12 month hold period (or a 4
month hold period for AIF Issuers), on securities from the date on which payment of the debt became due.
For those requiring a new Manual, a Manual subscription, or a full copy of any revised policies with
applicable appendices, these are available through the 4th Floor - Main Reception, 609 Granville Street,
phone: (604) 689-3334.
Should you have any questions regarding the content of the Policies, please contact Susan Copland,
Policy Analyst, Corporate Finance Services, (604) 643-6531. |
