Request for Comment Proposed National Policy 12-203 Cease Trade Orders for Continuous Disclosure Defaults Introduction We, the Canadian Securities Administrators (CSA regulators or we), are publishing for comment proposed National Policy 12-203 Cease Trade Orders for Continuous Disclosure Defaults (the Policy). The Policy provides guidance to reporting issuers, investors and market participants as to how the CSA will generally respond to certain types of continuous disclosure defaults. Substance and Purpose The Policy • modernizes, harmonizes and streamlines existing CSA practices relating to cease trade orders (CTOs) including general CTOs and management cease trade orders (MCTOs); • provides guidance for issuers as to the circumstances in which the regulators will issue a general CTO or an MCTO; • explains factors CSA Regulators will consider when evaluating an application for an MCTO; and • describes what other actions issuers need to undertake if we issue an MCTO. The Policy will replace: • Ontario Securities Commission Policy 57-603 – Defaults by Reporting Issuers in Complying with Financial Statement Filing Requirements; • CSA Staff Notice 57-301 – Failing to File Financial Statements on Time – Management Cease Trade Orders; and • CSA Staff Notice 57-303 – Frequently Asked Questions Regarding Management Cease Trade Orders Issued as a Consequence of a Failure to File Financial Statements. Summary of the Policy The Policy provides guidance as to how the CSA regulators will ordinarily respond to a specified default (as defined in part 2 of the Policy) by a reporting issuer. This response will be the issuer’s principal regulator issuing either a general CTO or an MCTO. The Policy describes the criteria the CSA regulators will apply when assessing whether to issue a general CTO or an MCTO and outlines what an issuer needs to include in its application for an MCTO. The Policy also describes what information an issuer must file during the period of an MCTO to support informed trading.
-2-The Policy reminds issuers of their responsibility to monitor trading by management and other insiders during the period of default and reminds insiders of their trading prohibitions under securities legislation. Finally, the Policy discusses the effect of a CTO issued by a CSA regulator in one jurisdiction on trading in another jurisdiction. Unpublished materials In developing the Policy, we have not relied on any significant unpublished study, report, decision or other written materials. Request for Comments We welcome your comments on the proposed Policy. Please submit your comments in writing on or before May 27, 2008. If you are not sending your comments by email, a diskette containing the submissions (in Windows format, Word) should also be forwarded. Address your submissions to the CSA member commissions, as follows: British Columbia Securities Commission Alberta Securities Commission Saskatchewan Financial Services Commission Manitoba Securities Commission Ontario Securities Commission Autorité des marchés financiers New Brunswick Securities Commission Nova Scotia Securities Commission Deliver your comments only to the two addresses that follow. Your comments will be forwarded to the other CSA member jurisdictions. c/o John Stevenson, Secretary Ontario Securities Commission 20 Queen Street West Suite 800, Box 55 Toronto, Ontario M5H 3S8 Fax: 416 593 2318 E-mail: jstevenson@osc.gov.on.ca Anne-Marie Beaudoin Secrétaire de l'Autorité Autorité des marchés financiers 800, square Victoria, 22e étage C.P. 246, Tour de la Bourse Montréal, Québec H4Z 1G3 Fax : 514 864 6381 E-mail: consultation-en-cours@lautorite.qc.ca We cannot keep submissions confidential because securities legislation in certain provinces requires publication of a summary of the written comments received during the comment period.
-3-Questions Please refer your questions to any of: Ontario Securities Commission Kelly Gorman Paul Hayward Manager, Corporate Finance Senior Legal Counsel, Corporate 416 593 8251 Finance kgorman@osc.gov.on.ca 416 593 3657 phayward@osc.gov.on.ca Sonny Randhawa Senior Accountant, Corporate Finance 416 593 2380 srandhawa@osc.gov.on.ca British Columbia Securities Commission Andrew Richardson Allan Lim Deputy Director, Corporate Finance Manager, Corporate Finance 604 899 6730 (direct) 604 899 6780 (direct) 800 373 6393 (toll-free in BC and Alberta) 800 373 6393 (toll-free in BC and arichardson@bcsc.bc.ca Alberta) alim@bcsc.bc.ca Sheryl Thomson Scott Pickard Senior Legal Counsel, Corporate Finance Senior Securities Analyst, Corporate 604 899 6778 (direct) Finance 800 373 6393 (toll-free in BC and Alberta) 604 899 6720 (direct) sthomson@bcsc.bc.ca 800 373 6393 (toll-free in BC and Alberta) spickard@bcsc.bc.ca Alberta Securities Commission Blaine Young Jonathan Taylor Associate Director, Corporate Finance Securities Analyst, Corporate Finance 403 297 4220 403 297 4770 blaine.young@seccom.ab.ca jonathan.taylor@seccom.ab.ca Celeste Evancio Legal Counsel, Corporate Finance 403 355 3885 celeste.evancio@seccom.ab.ca
-4-Saskatchewan Financial Services Commission Ian McIntosh Deputy Director, Corporate Finance 306 787 5867 imcintosh@sfsc.gov.sk.ca Manitoba Securities Commission Bob Bouchard Director, Corporate Finance 204 945 2555 bob.bouchard@gov.mb.ca Autorité des marchés financiers Nicole Parent Edvie Élysée Analyste Analyste 514 395 0337, poste 4455 514 395 0337, poste 4416 nicole.parent@lautorite.qc.ca edvie.elysee@lautorite.qc.ca Nova Scotia Securities Commission Bill Slattery Deputy Director, Corporate Finance and Administration 902 424 7355 slattejw@gov.ns.ca New Brunswick Securities Commission Pierre Thibodeau Senior Securities Analyst, Corporate Finance 506 643 7751 pierre.thibodeau@nbsc-cvmnb.ca March 28, 2008
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