The British Columbia Securities Commission published a blanket
order, B.C. Instrument 51-512 Certain Private
Placements, on March 23, 2015 which expands
existing exemptions in B.C. from the application of Multilateral
Instrument 51-105 Issuers Quoted in the US Over-the-Counter
we've previously discussed MI 51-105 can
subject issuers who carry out private placements to Canadian public
company obligations. Adopted by every province other than Ontario,
MI 51-105 is intended to discourage the manufacture and sale of
OTC-quoted shell companies that can be used to facilitate abusive
In response to the concern that MI 51-105 would have the
unintended effect of subjecting major well-established issuers that
trade OTC in the U.S. to Canadian public company reporting
obligations, regulators in almost all Canadian jurisdictions that
adopted MI 51-105 have issued blanket orders to exempt certain
issuers from the application of the instrument (links to the orders
are available on our Resources page).
B.C.'s local instrument 51-512 replaces a previously issued
B.C. blanket order,
B.C. local instrument 51-511, that exempted the
application of MI 51-105 to issuers with a primary listing on
certain specified stock exchanges or those distributing only
non-convertible debt securities.
While preserving the exemptions from the previous local
instrument, B.C. local instrument 51-512, has also adopted an
investor-based exemption for issuers that limit their promotional
activities to "permitted clients" under NI 31-103 (essentially,
institutional accredited investors). In doing so, B.C.'s
exemption is now more closely in line with blanket orders adopted
in Quebec on July 31, 2012 and Alberta on November 20, 2014.
Also similar to the Alberta order, B.C. instrument 51-512
exempts firms a disclosure requirement under s. 2.1(1) of NI 33-105 Underwriting
Conflicts where the distribution is made to
"permitted clients" purchasing under a prospectus
exemption. Under section 2.1(1) of NI 33-105, firms are
prohibited from acting either as an underwriter in a distribution
of securities in which it is the issuer or selling securityholder,
or as a direct underwriter in a distribution of securities of or by
a connected issuer or a related issuer of the specified firm
registrant, unless the distribution is made under a prospectus or
another document containing certain specified disclosure.
Ultimately, the order is intended to be an interim measure while
the BCSC continues to work with other members of the CSA to develop
proposals to improve "sophisticated investors'
access" to foreign issuers' securities.
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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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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