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THE SECURITIES ACT |
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Order No. 7377 |
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Section 20(1) |
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August 24, 2016 |
Blanket Order 51-501
Exemptions from Multilateral Instrument 51-105
Issuer Quoted in the U.S. Over-the-Counter Markets
WHEREAS:
(A) For the purposes of this order:
1. Terms defined in the Securities Act (Manitoba) (the Act), National Instrument 14-101 Definitions, National Instrument 33-105 Underwriting Conflicts (NI 33-105) or Multilateral Instrument 51-105 Issuers Quoted in the U.S. Over-the-Counter Markets (MI 51-105) have the same meaning in this Blanket Order.
2. In this order:
a) "designated exchange" means any of NASDAQ OMX; 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; Korea Exchange; and Singapore Exchange; and
b) "permitted
client" means a permitted client as defined in National Instrument
31-103 Registration Requirements, Exemptions and Ongoing Registrant
Obligations.
(B) Certain existing provisions of Manitoba securities laws impose unnecessary and unintended constraints on private placements to institutional investors.
1. Under section 3 of MI 51-105, an issuer that has issued a class of OTC-quoted securities and that does not have a class of securities listed or quoted on certain specified exchanges is a reporting issuer in Manitoba in certain circumstances.
2. Section 2.1(1) of NI 33-105 prohibits a specified firm registrant 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 that contains certain specified information. Further, where the specified information is required to be disclosed by section 2.1(1) of NI 33-105, section 4.1 requires in certain circumstances that a purchaser of securities be given a valuation of the issuer.
3. The exemptions from MI 51-105 provided by Order number 6577 and Order number 6889 do not fully address the unnecessary and unintended constraints.
(C) The Commission is of the opinion that it is not prejudicial to the public interest to make this order.
IT IS ORDERED:
1. That, pursuant to subsection 20(1) of the Act, an OTC issuer is exempt from section 3 of MI 51-105 if it would otherwise apply only by reason of the OTC issuer carrying on promotional activities in or from Manitoba or distributing a security to a person or company in Manitoba (or both), provided that:
a) the OTC issuer has securities listed on a designated exchange; or
b) all of the following apply:
(i) the distribution is exempt from the prospectus requirement;
(ii) the promotional activities in or from Manitoba are directed only at permitted clients; and
(iii) each person or company in Manitoba to which the OTC issuer distributes a security is a permitted client.
2. That, pursuant to subsection 20(1) of the Act, a person or company is exempt from sections 2.1(1) and 4.1 of NI 33-105 in connection with a distribution to which both of the following apply:
a) the distribution is exempt from the prospectus requirement; and
b) each person or company that purchases a security pursuant to the distribution is a permitted client.
3. That, pursuant to subsection 20(1) of the Act, Order number 6577 and Order number 6889 are revoked.
BY ORDER OF THE COMMISSION
Director, General Counsel