Meteor trades on the Over The Counter (OTC) NASDAQ symbol (MMIBF)
Apparently the new changes to this rule will make it easier for American investors to buy Canadian stocks in their Retirement Accounts.
Offer and Sale of Securities to Canadian Tax-Deferred Retirement Savings Accounts
AGENCY: Securities and Exchange Commission.
ACTION: Final rule.
SUMMARY: The Commission is adopting a new rule that would permit foreign securities to be
offered to U.S. participants in certain Canadian tax-deferred retirement accounts and sold to those
accounts without being registered under the Securities Act of 1933. The Commission also is
adopting a new rule that would permit foreign investment companies to offer securities to those U.S.
participants and sell securities to their Canadian retirement accounts without registering under the
Investment Company Act of 1940. These rules will enable investors who hold securities in certain
Canadian tax-deferred retirement accounts, and who reside or are temporarily present in the United
States, to manage their investments within those accounts.
EFFECTIVE DATE: June 23, 2000.
4.2 1934 Act
The 1934 Act is designed to help ensure that securities markets are fair and
honest. It requires issuers subject to its provisions to disclose on a timely
and ongoing basis material information about their business operations and
financial condition. The 1934 Act contains various anti-fraud sections as
well as both registration and reporting requirements.
Registration. Sections 12(a) and (b) of the 1934 Act require any issuer
that has a class of securities listed on a U.S. securities exchange, or a
class of equity securities quoted on the NASDAQ national market, to first
register that class under the 1934 Act.
In addition, Section 12(g) of the 1934 Act requires every issuer of securities
engaged in a business affecting commerce in or with the U.S., or whose
securities are traded by use of the U.S. mails, which at the end of its last
fiscal year had total assets of US$10 million or more and a class of equity
security (for example, common stock) held of record by 500 or more
persons, to file a registration statement with the SEC under Section 12(g)
with respect to that security, unless an exemption is available.
Any "foreign private issuer" is exempted from the Section 12(g) registration
requirement by SEC Rule 12g3-2(a) in respect of any class of securities
issued by it which has fewer than 300 holders of record resident in the U.S.
A "foreign private issuer" is defined by the SEC to mean any foreign issuer
other than a foreign government, unless (i) over 50% of its voting securities
are held of record, either directly or indirectly owned by U.S. residents, and
(ii) the majority of its executive officers or directors are U.S. citizens or
residents or more than 50% of its assets are located in the U.S. or its
business is administered principally in the U.S.
If the foreign private issuer cannot utilize the 12g3-2(a) exemption because it
has more than 300 U.S. stockholders, it might still be exempt from the
Section 12(g) registration requirement if (a) it is not a company regularly
reporting to the SEC (see Reporting below), and (b) it meets the
requirements of the "information supplying exemption" in Rule 12g3-2(b)
under the 1934 Act. To qualify for this exemption, the issuer must furnish
on a continuing basis to the SEC copies of information which would be
material to investors which the issuer (i) makes public in its own country, (ii)
files with a stock exchange on which its securities are traded and is made
public by the exchange, or (iii) distributes to its security holders.
Registration under the 1934 Act is usually separate from and in addition to
any registration requirements under the 1933 Act discussed above, and is
usually accomplished by foreign issuers on a Form 20-F. Form 20-F serves
as a registration statement under the 1934 Act and as a reporting
company's annual report (see "Reporting" below). It includes the disclosure
of most of the information required by the 1933 Act registration forms
discussed above under "1933 Act". Form 20-F has recently been revised to
conform to the international disclosure standards endorsed by the
International Organization of Securities Commissions. Issuers must file on
the revised Form 20-F beginning with their first filing after September 30,
2000.
Reporting. Issuers of securities registered under either the 1933 Act or
1934 Act must file annual and other periodic reports with the SEC under the
1934 Act. Foreign issuers that are reporting companies under the 1934 Act
must file annual reports on Form 20-F, no later than six months after the
end of the fiscal year covered by the report. Note that the company's
financial statements that form part of a Form 20-F report filing (as in the
case of a Form F-1 registration statement filing) must either be prepared in
accordance with U.S. GAAP or, if U.S. GAAP is not used, must be
accompanied by a reconciliation to U.S. GAAP as to the materially different
items in the financial statements. In addition, reporting foreign issuers must
file periodic reports on Form 6-K setting forth or attaching information made
available by the company to its stockholders pursuant to the law or stock
exchange regulations of the company's home country or otherwise
distributed by it to its stockholders.
Beneficial Ownership Reporting Requirements. Any person who owns
more than 5% of a class of securities of an issuer registered under either
the 1933 Act or 1934 Act must file with the SEC periodic reports of their
ownership of the issuer's securities. If the person owns less than 20% of a
class of equity securities registered pursuant to Section 12(g) of the 1934
Act and does not own the securities for purposes of controlling the issuer,
the ownership may be reported on a simplified form, Schedule 13G.
Broker-dealers and certain qualified institutional investors are also eligible to
file on Schedule 13G. Schedule 13G requires, among other information, the
disclosure of the person's name and address, the amount of securities
owned and the purpose for which they are owned. If Schedule 13G may not
be used by the particular security holder, they must report their interest on
the more complex Schedule 13D.
If the foreign issuer does not qualify for foreign private issuer status, the
officers, directors and any holder of more than 10% of a class of securities
must file reports with respect to their ownership of the issuer's securities,
and are subject to a number of rules designed to prevent short-term profit on
the issuer's securities. (Section 16(b) of the 1934 Act.)
Proxy Rules. The 1934 Act regulations also contain the SEC's "proxy
rules" which govern the information that registered companies must include
in proxy statements when proxies are solicited for voting at meetings of
stockholders. However, the proxy rules do not apply to foreign private
issuers.
Tender Offers. The 1934 Act also regulates "tender offers" to purchase
securities of an issuer. The term "tender offer" has not been defined by the
SEC, and the analysis of whether a particular offer to purchase securities
constitutes a tender offer can sometimes be complex. In addition, the SEC
rules governing tender offers are complicated. Consequently, it is important
to engage a team of professional advisors, including lawyers and financial
advisors, well in advance of a contemplated tender offer.
A person making a tender offer must normally abide by restrictions as to the
timing of the purchases, the types of consideration offered and purchases or
sales outside the terms of the tender offer. However, tender offers for the
securities of foreign private issuers may be exempt from the requirements of
the 1934 Act, depending on the percentage of the issuer's securities owned
by U.S. persons. Generally, a tender offer for the securities of a foreign
private issuer will be exempt if U.S. security holders hold less than 10% of
the issuer's securities. Certain more limited exemptions are also available
for foreign private issuers when U.S. security holders hold less than 40% of
the issuer's securities. |
