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THE SECURITIES ACT |
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Order No. 7274 |
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Section 20(1) |
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January 14, 2016 |
Blanket Order 45-503
Exemption from prospectus requirement
for certain trades through an investment dealer
WHEREAS:
(A) Staff has applied to The Manitoba Securities Commission (the “Commission”) for and order under subsection 20(1) of The Securities Act, R.S.M. 1988 c. S50 (the “Act”) to exempt from the prospectus requirements certain trades in listed securities where the purchaser makes the trade through an investment dealer registered under the Act on certain terms and conditions as set out below;
(B) Terms defined in National Instrument 14‑101 Definitions have the same meaning in this order.
(C) In this order
“investment dealer” has the same meaning as in section 1.1 of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations;
“listed
security” means a class of equity security of an issuer listed on the TSX
Venture Exchange, the Toronto Stock Exchange, the Canadian Securities Exchange,
or Aequitas Neo Exchange Inc.;
“offering material” means a document purporting to describe the business and
affairs of an issuer that has been prepared primarily for delivery to and
review by a prospective purchaser so as to assist the prospective purchaser to
make an investment decision in respect of securities being sold in a
distribution under this Instrument;
“offering news release” means the news release of an issuer announcing its intention to conduct a distribution under this Instrument.;
(D) The Commission is of the opinion that it is in the public interest to make this order.
IT IS ORDERED:
1.
THAT, pursuant
to subsection 20(1) of the Act, a trade by an issuer of a security of its own
issue that would be a primary distribution to the public is exempt from the
prospectus requirement if all of the following conditions are met:
(a) the issuer is a
reporting issuer in at least one jurisdiction of Canada;
(b) the issuer’s equity
securities are listed for trading on the TSX Venture Exchange, the Toronto
Stock Exchange, the Canadian Securities Exchange or Aequitas Neo Exchange Inc.;
(c) the issuer has filed
in each jurisdiction of Canada in which it is a reporting issuer all periodic
and timely disclosure documents that it is required to have filed in that
jurisdiction as required by each of the following:
(i)
applicable
securities legislation,
(ii)
an
order issued by the regulator or securities regulatory authority,
(iii)
an
undertaking to the regulator or securities regulatory authority;
(d) the issuer has issued and filed the offering news release as set out in section 2;
(e) the distribution is
of a listed security, a unit consisting of a listed security and a warrant, or
a security convertible into a listed security at the security holder’s sole
discretion;
(f) the
purchaser purchases the security as principal;
(g) the purchaser has obtained advice regarding the suitability of the investment and, if the person is resident in a jurisdiction of Canada, that advice has been obtained from a person that is registered as an investment dealer in the jurisdiction;
(h) the purchaser and the issuer enter into a subscription agreement that contains the conditions set out in sections 3 and 4; and
(i) the issuer complies with sections 5 and 7.
2. The offering news release must include
(a) reasonable detail of the proposed distribution and proposed use of gross proceeds including:
(i) the minimum and maximum number of securities proposed to be distributed and the minimum and maximum aggregate gross proceeds of the distribution; and
(ii) a description of the principal purposes, with approximate amounts, for which the issuer will use the gross proceeds, assuming both the minimum and maximum offering;
(b) disclosure of any material fact about the issuer that has not been generally disclosed; and
(c) a statement that there is no material fact or material change about the issuer that has not been generally disclosed.
3.
The
subscription agreement between the issuer and purchaser must contain a
contractual right of action against the issuer for rescission or damages that
(a) is available to the
purchaser if a document or core document, each as defined in section 174 of the
Act, contains a misrepresentation that was not corrected before the purchaser
acquires a security under this exemption, without regard to whether the
purchaser relied on the misrepresentation;
(b) is enforceable by the
purchaser delivering a notice to the issuer
(i)
in
the case of an action for rescission, within 180 days after the purchaser signs
the agreement to purchase the security, or
(ii)
in
the case of an action for damages, before the earlier of
(A)
180
days after the purchaser first has knowledge of the facts giving rise to the
cause of action, or
(B)
3
years after the date the purchaser signs the agreement to purchase the
security;
(c) is subject to the
defence that the purchaser had knowledge of the misrepresentation;
(d) in the case of an
action for damages, provides that the amount recoverable
(i)
must
not exceed the price at which the security was offered, and
(ii)
does
not include all or any part of the damages that the issuer proves does not
represent the depreciation in value of the security resulting from the
misrepresentation; and
(e) is in addition to, and does not detract from, any other right of the purchaser.
4.
The issuer must represent each of
the following to the purchaser in the subscription agreement:
(a) the issuer’s
“documents” and “core documents”, each as defined in section 174 of the Act, do
not contain a misrepresentation;
(b) there is no material
fact or material change related to the issuer that has not been generally
disclosed.
5. Other than the subscription agreement, any offering material provided to a purchaser in connection with a distribution under this Instrument must be filed with the regulator or securities regulatory authority no later than the day that the material was first provided to a purchaser.
Resale restrictions
6. The first trade of a security acquired under this Instrument is subject to section 2.5 of National instrument 45-102 Resale of Securities.
Report of exempt distribution
7. An issuer that distributes a security under this Instrument must file a report with the Commission in Form 45-106F1 no later than the 10th day after the distribution.
Effective date
8. This order comes into effect on January 14, 2016.
BY ORDER OF THE COMMISSION
"Chris Besko"
Director