RE: BC CTO
1 - Procedure and Related Matters
[Print]
12-603 Reactivation of Dormant Issuers (Previously Local Policy Statement 3-35) [BCP]
Published October 1, 2003
Effective September 30, 2003
INTRODUCTION
This policy sets out guidelines for dormant issuers making an application to reactivate trading in their securities. A dormant issuer must also comply with the applicable reactivation requirements of any exchange on which its securities are or will be listed.
PART 1 IMPLEMENTATION
1.1 Effective Date - The Commission is rescinding BC Policy 12-603 dated May 30, 2001 and substituting this BC Policy, effective March 27, 2003.
1.2 Defined Terms - Terms defined or interpreted in the Securities Act, Securities Regulation or Securities Rules have the same meaning in this Policy.
PART 2 APPLICATION OF POLICY
2.1 Dormant Issuer - A dormant issuer is a reporting issuer whose securities have been subject to a cease trade order under section 164 of the Act for more than 90 days. An issuer that has been subject to a cease trade order for 90 days or less may reactivate trading in its securities by filing all delinquent information and records and paying all outstanding fees.
2.2 Section 186 of the Rules - Once an issuer becomes dormant, section 186 of the Rules requires the dormant issuer to file, concurrently with filing the records or information referred to in the cease trade order, certain additional records or information about theissuer that the commission or the executive director considers necessary to determine whether trading in the issuer's securities is prejudicial to the public interest.
This policy specifies the additional records and information the dormant issuer must file under section 186 of the Rules.
PART 3 GENERAL REQUIREMENTS
3.1 Two Year Restriction - A dormant issuer should make a reactivation application within two years of the date of the cease trade order. The executive director will generally accept a reactivation application relating to an order that has been in effect for more than two years if the issuer has continuously owned its principal asset (that is the subject of its financial plan) since it became dormant. An issuer which has not continuously owned its principal asset that is seeking reactivation after more than two years will be required to file an escrow agreement in accordance with the proposed uniform escrow regime outlined in CSA Notice 46-301 Proposal for Uniform Terms of Escrow Applicable to Initial Public Distributions,or any successor policy or instrument.
3.2 Repealed.
3.3 Financial Plan - A financial plan is a discussion of the current financial condition of the issuer and, if applicable, the measures proposed to restore its solvency. This discussion will normally form a part of the disclosure document described in section 4.1(i). Reactivation of a dormant issuer will not be permitted unless its financial plan indicates that it will be solvent when trading of its securities resumes and will remain so in carrying out its business for at least six months.
3.4 Revocation of Cease Trade Order - The reactivation application must be sufficient for the executive director to consider whether trading in the dormant issuer's securities is prejudicial to the public interest. If, after a review of the reactivation application, it is determined that trading in the issuer's securities is not prejudicial to the public interest, the executive director will issue an order under section 171 of the Act revoking the cease trade order.
PART 4 MATERIALS TO BE FILED
4.1 Materials to be Filed - The executive director requires the issuer to file the following materials with its reactivation application:
(a) Cover Letter - a cover letter that includes the following information:
(i) a list of documents and materials filed with the application,
(ii) a description of the materials required to be filed that are not being filed, will be filed at a later date, or vary from the form or content prescribed by the Act or Rules, the reasons for the omission or variation and the expected date that the materials will be filed,
(iii) details of non-compliance with the commission’s policies and the reasons for the non-compliance, and
(iv) details of materials previously filed with the commission.
(b) a completed BC Form 11-901F Fee Checklist, together with any applicable filing fees prescribed by section 22(1) of the Regulation, including:
(i) the reactivation application filing fee,
(ii) all outstanding fees payable for previous filings made by the issuer and for filings made as part of the reactivation application, and
(iii) the appropriate filing fee for any prospectus or technical report filed with the application.
Cheques should be made payable to the “British Columbia Securities Commission”.
(c) Audited annual financial statements - the issuer's audited annual financial statements for each fiscal year ending after the last year for which the issuer has filed statements under the Rules.
(d) Interim financial statements - the issuer's unaudited interim financial statements or, if the issuer is an exchange issuer, quarterly reports for each quarter after the end of the issuer's last fiscal year. The executive director will generally only require the issuer to file interim financial statements and quarterly reports for periods subsequent to the issuer's most recently completed financial year.
(e) Technical Report - a current technical report on each property material to the issuer prepared in accordance with
(i) National Instrument 43-101 Standards of Disclosure for Mineral Projects and Form 43-101F1 Technical Report; or
(ii) National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities; or
(iii) National Policy 2-B Guide for Engineers and Geologists Submitting Oil and Gas Reports to Canadian Provincial Securities Administrators if the issuer is engaged in oil and gas activities and the issuer has not filed and is not required to have filed the statement referred to in Item 1 of section 2.1 of National Instrument 51-101.
(f) Escrow Agreement - an escrow agreement if required.
(g) For each director and officer and each proposed director and officer of the issuer and its existing or proposed subsidiaries, a copy of the Personal Information Form filed at the exchange on which the issuer is listed or conditionally listed. If the issuer is not listed, the issuer must use the Personal Information Form TSX Venture requires its listed issuers to file. If the issuer is not listed, the issuer must also provide the written consent of each individual listed on the form for the Commission to conduct a criminal records check. Issuers should check with Commission staff, before filing, for the form of consent.
(h) Repealed.
(i) Disclosure document - a preliminary prospectus if a public offering of the issuer's securities is contemplated as part of the reactivation. Reference should be made to BCP 41-601 or any successor instrument or policy for guidance concerning the additional documents that must be filed with a preliminary prospectus. In the case of a private placement, another type of disclosure document may be used, such as a stock exchange filing statement or listing application. In all cases a disclosure document containing prospectus level disclosure must be filed.
(j) Private placement - where a private placement is proposed, the cover letter must indicate the statutory exemptions that will be relied on.
PART 5 FINANCING AS PART OF A REACTIVATION
5.1 Trades as Part of Reactivation - The reactivation application may provide for certain trades in securities - for example, a public offering, the issuance of shares for debt, a private placement or a trade to effect a change in control - that must be carried out as part of the reactivation process. In most cases, these trades may not occur until the cease trade order is revoked or varied. To the extent that any trade must be completed before the reactivation application has been accepted, an application must be made to the executive director for an order under section 171 of the Act to partially revoke the cease trade order.
5.2 Preliminary Prospectus filed with Application - Where the issuer files a preliminary prospectus with its reactivation application, an application for an order under section 171 of the Act must be made if the preliminary prospectus will be distributed to any person for the purpose of soliciting expressions of interest in the issuer's securities.
September 30, 2003
Douglas M. Hyndman
Chair