Policy Statement to Regulation 44-103 Respecting Post-Receipt Pricing

POLICY STATEMENT IN FORCE FROM JUNE 9, 2023 TO APRIL 15, 2024 Policy Statement to Regulation 44-103 June 9, 2023 PAGE 1 Last amendments in force on June 9, 2023 POLICY STATEMENT TO REGULATION 44-103 RESPECTING POST-RECEIPT PRICING
PART 1
INTRODUCTION
1.1 Implementation of the Regulation
Certain jurisdictions have implemented Regulation 44-103 respecting Post￾Receipt Pricing (chapter V-1.1, r. 18) (the "Regulation") by one or more instruments forming part of securities legislation or securities directions in the jurisdiction. As a result, the provisions of the Regulation apply in those jurisdictions to the extent provided by, and except as modified by, the implementing law of the jurisdiction.
1.2 Availability of PREP
Access to the PREP procedures is not restricted to issuers qualified to file a prospectus in the form of a short form prospectus. Any issuer that wishes to use the PREP procedures, or enable a selling securityholder to use the PREP procedures, to distribute securities may file a prospectus that is a base PREP prospectus.
1.3 Relationship of the Regulation to Securities Legislation
(1) Issuers are reminded that the rules and procedures contained in the Regulation for distributions made using the PREP procedures should be read in conjunction with other provisions of securities legislation in each jurisdiction in which a distribution is being made. (2) A distribution under a short form prospectus using the PREP procedures is subject to all the requirements of Regulation 44-101 respecting Short Form Prospectus Distributions (chapter V-1.1, r. 16), some of the requirements of Regulation 41-101 respecting General Prospectus Requirements (chapter V-1.1, r. 14) and other provisions of securities legislation, as supplemented or varied by the Regulation and the implementing law of the jurisdiction. Reference is made to Part 1 of Policy Statement to Regulation 44-101 respecting Short Form Prospectus Distributions (Decision 2005- PDG-0388, 2005-12-13) for a discussion of the relationship between Regulation 44-101 respecting Short Form Prospectus Distributions and various other pieces of securities legislation and section 1.2 of Policy Statement to Regulation 41-101 respecting General Prospectus Requirements (Decision 2008-PDG-0055, 2008-02-28) for a discussion of the relationship between Regulation 41-101 respecting General Prospectus Requirements and various other pieces of securities legislation. (3) Similarly, a distribution using the PREP procedures not made under a short form prospectus is subject to securities legislation, as supplemented or varied by the

POLICY STATEMENT IN FORCE FROM JUNE 9, 2023 TO APRIL 15, 2024 Policy Statement to Regulation 44-103 June 9, 2023 PAGE 2 Regulation and the implementing law of the jurisdiction, including Regulation 41-101 respecting General Prospectus Requirements.
1.4. Electronic transmission
Regulation 13-103 respecting System for Electronic Data Analysis and Retrieval + (SEDAR+) (chapter V-1.1, r. 2.3) prescribes that each document that is required or permitted to be provided to a regulator, except in Québec, or securities regulatory authority must be transmitted to the regulator, except in Québec, or securities regulatory authority electronically through the System for Electronic Data Analysis and Retrieval + (SEDAR+). The reference to a document includes any report, form, application, information, material and notice, as well as a copy thereof, and applies to documents that are required or permitted to be filed or deposited with, or delivered, furnished, sent, provided, submitted or otherwise transmitted to, a regulator, except in Québec, or securities regulatory authority. To reflect the phased implementation of SEDAR+, the Appendix of Regulation 13-103 respecting System for Electronic Data Analysis and Retrieval + (SEDAR+) sets out securities legislation under which documents are excluded from being filed or delivered in SEDAR+. Regulation 13-103 respecting System for Electronic Data Analysis and Retrieval + (SEDAR+) should be consulted when providing any document to a regulator, except in Québec, or securities regulatory authority under the Regulation and this Policy Statement.
PART 2
PROSPECTUS AMENDMENTS
2.1 Prospectus Amendments
(1) Section 4.4 of the Regulation provides that the size of an offering may be increased or decreased by up to 20% between the filing of the prospectus and the filing of the supplemented PREP prospectus. The section further provides that, in cases where such a change in the size of the offering constitutes a material change, the requirement in Part 6 of Regulation 41-101 respecting General Prospectus Requirements or other securities legislation to file an amendment if a material change occurs may be satisfied by filing the supplemented PREP prospectus. The form of certificates required in the supplemented PREP prospectus are those set out in subsection 4.5(2) of the Regulation. For changes in the size of the offering by more than 20% that constitute a material change, this flexibility in filing of the amendment is not available. (2) The securities regulatory authorities are of the view that an issuer’s ability to use the PREP procedures does not prevent the filing of a prospectus amendment to make

POLICY STATEMENT IN FORCE FROM JUNE 9, 2023 TO APRIL 15, 2024 Policy Statement to Regulation 44-103 June 9, 2023 PAGE 3 some or all of the changes to the prospectus that are permitted to be made by a supplemented PREP prospectus.
PART 3
PREP PROCEDURES
3.1 Firm Commitment Distributions
Paragraph 10 of section 3.3 of the Regulation provides that a base PREP prospectus for securities to be distributed by one or more underwriters that have agreed to purchase the securities at a specified price is not required to indicate that the securities are to be taken up by the underwriters, if at all, on or before a specified date. This subsection provides an exemption from the requirement of securities legislation that this disclosure must be contained in a prospectus. Issuers are reminded that paragraph 1 of subsection 4.5(2) requires all information omitted from a base PREP prospectus to be included in a supplemented PREP prospectus. Therefore, it is necessary to comply with the relevant requirement of securities legislation in a supplemented PREP prospectus relating to specific distributions that are being effected on a firm commitment basis.
3.2 Best Efforts Distributions
Similarly, paragraph 11 of section 3.3 of the Regulation provides that a base PREP prospectus for a distribution of securities underwritten on a best efforts basis for which a minimum amount of funds are required by an issuer is not required to include disclosure required under securities legislation concerning the maximum length of time for which the distribution may continue and concerning the disposition of subscription funds. Issuers are reminded, as in the previous subsection, that paragraph 1 of subsection 4.5(2) requires all information omitted from a base PREP prospectus to be included in a supplemented PREP prospectus. Therefore, it is necessary to comply with the relevant requirement of securities legislation in a supplemented PREP prospectus relating to specific distributions that are being effected on a best efforts basis. Issuers are also reminded that where PREP procedures are used in connection with securities Offered on a best efforts basis for which a minimum amount of funds are required, the issuer may not reduce the size of the distribution pursuant to section 4.4 of the Regulation in a supplemented PREP prospectus to a size that would yield less than the minimum amount of funds.
3.3 Rights of Rescission or withdrawal
The securities regulatory authorities are of the view that statutory rights of rescission or withdrawal commence from the time of the purchaser’s receipt of a supplemented PREP prospectus. It is only at this time that the entire prospectus has been delivered.

POLICY STATEMENT IN FORCE FROM JUNE 9, 2023 TO APRIL 15, 2024 Policy Statement to Regulation 44-103 June 9, 2023 PAGE 4
3.4 Supplemented Prospectus not an Amendment
The securities regulatory authorities do not consider a supplemented PREP prospectus to constitute an amendment to a prospectus within the meaning of Part 6 of Regulation 41-101 respecting General Prospectus Requirements (chapter V-1.1, r. 14) or other securities legislation.
3.5 Marketing Activities
Issuers and investment dealers should also refer to the guidance on marketing activities in Part 6 of the Policy Statement to Regulation 41-101 respecting General Prospectus Requirements (Decision 2008-PDG-0055, 2008-02-28). While the Instrument has provisions on marketing after a receipt for a final base PREP prospectus, Regulation 41-101 respecting General Prospectus Requirements (chapter V-1.1, r. 14) has general provisions that apply to marketing during the waiting period. Decision 2000-C-0705, 2000-11-14 (Voir également la décision 2000-C-0706) Decision 2001-C-0204, 2001-05-22 Bulletin hebdomadaire: Vol. XXXII n° 22, 2001-06-01 Modification Decision 2005-PDG-0390, 2005-12-13 Bulletin de l’Autorité : 2005-12-16, Vol. 2 n° 50 Decision 2008-PDG-0059, 2008-02-28 Bulletin de l’Autorité : 2008-03-14, Vol. 5 n° 10 Décision 2013-PDG-0126, 2013-07-04 Bulletin de l’Autorité : 2013-08-08, Vol. 10, n° 31 Decision 2023-PDG-0018, 2023-04-274 Bulletin de l’Autorité : 2023-06-01, Vol. 20 n° 21