Responding to concerns raised by non-Canadian international
market participants, the Canadian Securities Administrators (the
CSA) have granted relief for certain foreign issuers from the
requirement to report whether a purchaser under an exempt
distribution in Canada is a "registrant" and/or an
"insider" of the issuer (the Foreign Issuer Relief) in
Schedule 1 to the new Form 45-106F1 – Report of Exempt
Distribution (the New Form) that came into effect
June 30, 2016.
previously discussed, the New Form requires issuers
and underwriters, as applicable, to complete a confidential
schedule disclosing, among other things, whether or not each
purchaser in Canada is a "registrant" and/or an
"insider" of the issuer. Since publication of the New
Report, non-Canadian international market participants have
expressed concerns about the compliance challenges associated with
determining such information within the meaning of the terms as
defined in Canadian securities laws, given the different standards
and meanings applied to such terms in other foreign jurisdictions
and in light of the New Form's certification
Similar to the exemptions provided in Item 9 of the New
Form pertaining to directors, executive officers and promoters of
the issuer, the Foreign Issuer Relief is being granted where:
(a) the issuer is a "foreign
(b) the issuer is a wholly owned subsidiary of a "foreign
public issuer", or
(c) the issuer is distributing "eligible foreign
securities" into Canada solely to "permitted
clients" (the class of investor with whom a foreign dealer
relying on the "international dealer exemption" is
permitted to trade primarily in foreign securities).
A "foreign public issuer" is defined under the Foreign
Issuer Relief to mean any of the following:
(a) an issuer that has a class of
securities registered under section 12 of the Securities and Exchange Act of
1934, as amended (the 1934 Act),
(b) an issuer that is required to file reports under section 15(d)
of the 1934 Act, or
(c) an issuer that is required to provide disclosure relating to
the issuer and the trading in its securities to the public, to
security holders of the issuer or to a regulatory authority and
that disclosure is publicly available in a "designated foreign
jurisdiction" (defined to include Australia, France, Germany,
Hong Kong, Italy, Japan, Mexico, the Netherlands, New Zealand,
Singapore, South Africa, Spain, Sweden, Switzerland or the United
Kingdom of Great Britain and Northern Ireland).
"Eligible foreign securities" are defined under the
Foreign Issuer Relief to mean:
(i) a security is issued by an issuer:
(a) that is incorporated, formed or
created under the laws of a foreign jurisdiction,
(b) that is not a reporting issuer in a jurisdiction of
(c) that has its head office outside of Canada, and
(d) that has a majority of the executive officers and a majority of
the directors ordinarily resident outside of Canada, or
(ii) a security issued or guaranteed by the government of
a foreign jurisdiction.
All CSA members, other than the Ontario Securities Commission
(the OSC) have issued blanket orders effective June 30, 2016
implementing the Foreign Issuer Relief. The OSC has approved an
amendment instrument providing for the same relief, which has been
delivered to the Ontario Minister of Finance for approval.
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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