The Alberta and the British Columbia Securities Commissions have
issued exemption orders (the Exemption Orders) which provide
limited relief from Multilateral Instrument 51-105 Issuers
Quoted in the U.S. Over-the-Counter Markets (MI 51-105). Both
MI 51-105 and the Exemption Orders are currently in effect.
For our Osler Update regarding the initial adoption of MI
The Exemption Orders provide that an "OTC issuer," as
defined in MI 51-105 (OTC issuer) is exempt from the provisions of
the rule provided that it has a "primary listing" that is
in effect each time the issuer:
carries on any promotional activity, as defined in MI 51-105,
in or from Alberta or British Columbia; or
distributes a security to a person resident in Alberta or
"Primary listing" is defined as an issuer's first
listing of a class of its securities on a "designated
exchange." We are seeking interpretive guidance from the
regulators because it is not clear what is intended by "first
listing". The designated exchanges are:
Borsa Italiana, MTA Tier
London Stock Exchange, except AIM
Hong Kong Stock Exchange
Deutsche Börse, except the First Quotation Board and the
Entry Standard tier
Xetra, Prime Standard and General Standard tiers
SIX Swiss Exchange
Bourse de Luxembourg, except Euro MTF
Tokyo Stock Exchange, 1st Section and 2nd Section
Shanghai Stock Exchange
The Stock Exchange of Thailand, except The Market for
Alternative Investment (mai)
National Stock Exchange of India
Bombay Stock Exchange
Osaka Stock Exchange
In addition, the Exemption Orders provide an exemption from MI
51-105 for an OTC issuer that distributes a non-convertible debt
security to a person resident in Alberta or British Columbia if the
issuer "does not have any class of securities other than
non-convertible debt listed on an exchange or quoted on a quotation
and trade reporting system." It is not clear why a listing of
any class of securities other than non-convertible debt on any
exchange or trade reporting system renders the exemption
unavailable. We are seeking interpretive guidance from the
regulators regarding the exemption.
It is anticipated that the Canadian Securities Administrators in
each other province and territory of Canada where MI 51-105 is in
effect will issue exemptive relief similar to the Exemption Orders.
In addition, we are expecting the Canadian Securities
Administrators to issue interpretive guidance regarding both MI
51-105 and the Exemption Orders. We will provide updated
information as it becomes available.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The Canadian Office of the Superintendent of Financial Institutions ("OSFI") recently ruled that a bank cannot promote comprehensive credit insurance ("CCI") within its Canadian branches under the Insurance Business (Banks and Bank Holdings Companies) Regulations (the "Regulations").
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