RegAlert2019-01-03
Added · Updated
Regulation 41-101 respecting General Prospectus Requirements
The Autorité des marchés financiers issued Regulation 41-101 to establish the general prospectus requirements for securities distributions under the Securities Act. The regulation defines key terms and specifies the mandatory forms and content for long form, short form, and exchange-traded fund prospectuses. It also outlines the rules for preliminary and final prospectus notices, marketing materials, and the treatment of restricted securities and credit support.
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REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 1 Last amendment in force on January 3, 2019 This document has official status
chapter V-1.1, r. 14
REGULATION 41-101 RESPECTING GENERAL PROSPECTUS REQUIREMENTS Securities Act (chapter V-1.1, s. 331.1) Further to the publication of CSA Staff Notice 11-342: Notice of Local Amendments and Changes in Certain Jurisdictions (AMF Bulletin of August 6, 2020, Vol.. 147, no. 31) this Regulation has been updated.
PART 1 DEFINITIONS AND INTERPRETATIONS
1.1. Definitions
In this Regulation:
“accredited investor” has the same meaning as in section 1.1 of Regulation 45-106 respecting Prospectus Exemptions (chapter V-1.1, r. 21); “acquisition” has the same meaning as in Part 8 of Regulation 51-102 respecting Continuous Disclosure Obligations (chapter V-1.1, r. 24); “acquisition date” has the same meaning as in section 1.1 of Regulation 51-102 respecting Continuous Disclosure Obligations; “acquisition of related businesses” has the same meaning as in Part 8 of Regulation 51-102 respecting Continuous Disclosure Obligations; “Aequitas personal information form” means a personal information form for an individual prepared pursuant to Aequitas NEO Exchange Inc. Form 3, as amended from time to time; “alternative credit support” has the same meaning as in section 13.4 of Regulation 51-102 respecting Continuous Disclosure Obligations; “alternative mutual fund” has the same meaning as in section 1.1 of Regulation 81-102 respecting Investment Funds (chapter V-1.1, r. 39); “asset-backed security” has the same meaning as in section 1.1 of Regulation 51-102 respecting Continuous Disclosure Obligations;
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 2 “base offering” means the number or principal amount of the securities distributed under a prospectus by an issuer or selling securityholder, excluding (a) any over-allotment option granted in connection with the distribution, or the securities issuable on the exercise of any such over-allotment option, and (b) securities issued or paid as compensation to a person for acting as an underwriter in respect of securities that are distributed under the prospectus, on an "asif-converted" basis if these securities include securities that are convertible or exchangeable securities; “board of directors” has the same meaning as in section 1.1 of Regulation 51-102 respecting Continuous Disclosure Obligations; “business acquisition report” has the same meaning as in section 1.1 of Regulation 51-102 respecting Continuous Disclosure Obligations; “business day” means any day other than a Saturday, a Sunday or a statutory holiday; “class” has the same meaning as in section 1.1 of Regulation 51-102 respecting Continuous Disclosure Obligations; “credit supporter” has the same meaning as in section 13.4 of Regulation 51-102 respecting Continuous Disclosure Obligations; “custodian” means the institution appointed by an investment fund to act as custodian of the portfolio assets of the investment fund; “date of transition to IFRS” has the same meaning as in section 1.1 of Regulation 51-102 respecting Continuous Disclosure Obligations; “derivative” means an instrument, agreement or security, the market price, value or payment obligation of which is derived from, referenced to, or based on an underlying interest; “designated foreign jurisdiction” has the same meaning as in section 1.1 of Regulation 52-107 respecting Accounting Principles and Auditing Standards (chapter V-1.1, r. 25); “designated rating organization” has the same meaning as in Regulation 44-101 respecting Short Form Prospectus Distributions (chapter V-1.1, r. 16); “DRO affiliate” has the same meaning as in section 1 of Regulation 25-101 respecting Designated Rating Organizations (chapter V-1.1, r. 8.1);
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 3 “equity investee” has the same meaning as in section 1.1 of Regulation 51-102 respecting Continuous Disclosure Obligations; “equity security” means a security of an issuer that carries a residual right to participate in the earnings of the issuer and, on the liquidation or winding up of the issuer, in its assets; “ETF” means an exchange-traded mutual fund; ““ETF facts document” means a completed Form 41-101F4; ““exchange-traded mutual fund” means a mutual fund in continuous distribution, the securities of which are (a) listed on an exchange, and (b) trading on an exchange or an alternative trading system; “executive officer” means, for an issuer or an investment fund manager, an individual who is (a) a chair, vice-chair or president, (a.1) a chief executive officer or chief financial officer, (b) a vice-president in charge of a principal business unit, division or function including sales, finance or production, or (c) performing a policy-making function in respect of the issuer or investment fund manager; “final prospectus notice” means (a) in British Columbia, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario and Saskatchewan, a written communication relating to a final prospectus if that communication is permitted by a provision in securities legislation listed opposite the jurisdiction in Appendix E, or (b) in every other jurisdiction of Canada, a written communication relating to a final prospectus that only (i) identifies the security proposed to be issued, (ii) states the price of the security, and
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 4 (iii) states the name and address of a person from whom purchases of the security may be made and from whom a final prospectus may be obtained; “financial statements” includes interim financial reports; “first IFRS financial statements” has the same meaning as in section 1.1 of Regulation 51-102 respecting Continuous Disclosure Obligations; “foreign disclosure requirements” has the same meaning as in section 1.1 of Regulation 52-107 respecting Acceptable Accounting Principles and Auditing Standards; “full and unconditional credit support” means (a) alternative credit support that (i) entitles the holder of the securities to receive payment from the credit supporter, or enables the holder to receive payment from the issuer, within 15 days of any failure by the issuer to make a payment, and (ii) results in the securities receiving the same credit rating as, or a higher credit rating than, the credit rating they would have received if payment had been fully and unconditionally guaranteed by the credit supporter, or would result in the securities receiving such a rating if they were rated, or (b) a full and unconditional guarantee of the payments to be made, as interpreted in section 1.5, by the issuer of securities, as stipulated in the terms of the securities or in an agreement governing rights of holders of the securities, that results in the holder of such securities being entitled to receive payment from the credit supporter within 15 days of any failure by the issuer to make a payment; “independent review committee” means an independent review committee under Regulation 81-107 respecting Independent Review Committee for Investment Funds (chapter V-1.1, r. 43); “information circular” has the same meaning as in section 1.1 of Regulation 51-102 respecting Continuous Disclosure Obligations; “interim period” has the same meaning as in (a) section 1.1 of Regulation 51-102 respecting Continuous Disclosure Obligations for an issuer other than an investment fund, or (b) section 1.1 of Regulation 81-106 respecting Investment Fund Continuous Disclosure (chapter V-1.1, r. 42) for an investment fund;
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 5 “investment dealer” has the same meaning as in section 1.1 of Regulation 31-103 respecting Registration Requirements, Exemptions and Ongoing Registrant Obligations (chapter V-1.1, r. 10); “IPO venture issuer” means an issuer that (a) files a long form prospectus, (b) is not a reporting issuer in any jurisdiction immediately before the date of the final long form prospectus, and (c) at the date of the long form prospectus, does not have any of its securities listed or quoted, has not applied to list or quote any of its securities, and does not intend to apply to list or quote any of its securities, on (i) the Toronto Stock Exchange, (i.1) Aequitas NEO Exchange Inc.; (ii) a U.S. marketplace, or (iii) a marketplace outside of Canada and the United States of America, other than the Alternative Investment Market of the London Stock Exchange or the PLUS markets operated by PLUS Markets Group plc; “issuer’s GAAP” has the same meaning as in section 1.1 of Regulation 52-107 respecting Acceptable Accounting Principles and Auditing Standards; “junior issuer” means an issuer (a) that files a preliminary prospectus; (b) that is not a reporting issuer in any jurisdiction; (c) whose total consolidated assets as at the date of the most recent statement of financial position of the issuer included in the preliminary prospectus are less than $10,000,000; (d) whose consolidated revenue as shown in the most recent annual statement of comprehensive income of the issuer included in the preliminary prospectus is less than $10,000,000; and (e) whose equity as at the date of the most recent statement of financial position of the issuer included in the preliminary prospectus is less than $10,000,000;
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 6 taking into account all adjustments to asset, revenue and equity calculations necessary to reflect each significant proposed acquisition of a business or related business by an issuer that has progressed to a state where a reasonable person would believe that the likelihood of the issuer completing the acquisition is high, and each completed significant acquisition of a business or related business that was completed, (f) for paragraphs (c) and (e), before the date of the preliminary prospectus and after the date of the issuer's most recent statement of financial position included in the preliminary prospectus as if each acquisition had taken place as at the date of the issuer's most recent statement of financial position included in the preliminary prospectus; and (g) for paragraph (d), after the last day of the most recent annual statement of comprehensive income of the issuer included in the preliminary prospectus as if each acquisition had taken place at the beginning of the issuer's most recently completed financial year for which a statement of comprehensive income is included in the preliminary prospectus; “labour sponsored or venture capital fund” has the same meaning as in section 1.1 of Regulation 81-106 respecting Investment Fund Continuous Disclosure; “lead underwriter” means, in respect of a syndicate of underwriters, (a) the underwriter designated under the underwriting agreement to act as the manager of the syndicate, or (b) if more than one underwriter is designated under the underwriting agreement to act as a manager of the syndicate, the underwriter designated under the agreement to have primary decision-making authority; ““limited-use version” means a template version in which the spaces for information have been completed in accordance with any of the following:
(a) subsection 13.7(2) or 13.8(2);
(b) subsection 7.6(2) of Regulation 44-101 respecting Short Form Prospectus Distributions (chapter V-1.1, r. 16); (c) subsection 9A.3(2) of Regulation 44-102 respecting Shelf Distributions (chapter V-1.1, r. 17); (d) subsection 4A.3(3) of Regulation 44-103 respecting Post-Receipt Pricing (chapter V-1.1, r. 18); “long form prospectus” means a prospectus filed in the form of Form 41-101F1, Form 41-101F2 or Form 41-101F3;
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 7 “marketing materials” means a written communication intended for potential investors regarding a distribution of securities under a prospectus that contains material facts relating to an issuer, securities or an offering, but does not include the following:
(a) a prospectus or any amendment;
(b) a standard term sheet;
(c) a preliminary prospectus notice;
(d) a final prospectus notice;
“marketplace” has the same meaning as in section 1.1 of Regulation 51-102 respecting Continuous Disclosure Obligations; “material contract” means any contract that an issuer or any of its subsidiaries is a party to, that is material to the issuer; “mineral project” has the same meaning as in section 1.1 of Regulation 43-101 respecting Standards of Disclosure for Mineral Projects (chapter V-1.1, r. 15); “non-voting security” means a restricted security that does not carry the right to vote generally, except for a right to vote that is mandated, in special circumstances, by law; “old financial year” means the financial year of an issuer that immediately precedes a transition year; “over-allocation position” means the amount, determined as at the closing of a distribution, by which the aggregate number or principal amount of securities that are sold by one or more underwriters of the distribution exceeds the base offering; “over-allotment option” means a right granted to one or more underwriters by an issuer or a selling securityholder of the issuer in connection with the distribution of securities under a prospectus to acquire, for the purposes of covering the underwriter’s over-allocation position, a security of an issuer that has the same designation and attributes as a security that is distributed under such prospectus, and which (a) expires not later than the 60th day after the date of the closing of the distribution, and (b) is exercisable for a number or principal amount of securities that is limited to the lesser of (i) the over-allocation position, and
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 8 (ii) 15% of the base offering; “preliminary prospectus notice” means (a) in a jurisdiction other than Québec, a communication relating to a preliminary prospectus if that communication is permitted by a provision in securities legislation listed opposite the jurisdiction in Appendix D, or (b) in Québec, a written communication relating to a preliminary prospectus that only (i) identifies the security proposed to be issued, (ii) states the price of the security, if determined, and (iii) states the name and address of a person from whom purchases of the security may be made and from whom a preliminary prospectus may be obtained; “personal information form” means, (a) a completed Schedule 1 of Appendix A, or (b) a completed TSX/TSXV personal information form submitted by an individual to the Toronto Stock Exchange or to the TSX Venture Exchange to which is attached a completed certificate and consent in the form set out in Schedule 1 – Part B of Appendix A; (c) a completed Aequitas personal information form submitted by an individual to Aequitas NEO Exchange Inc., to which is attached a completed certificate and consent in the form set out in Scedule 1 – Part B of Appendix A; “plan summary” means a document prepared in accordance with the requirements of Part A of Form 41-101F3; “predecessor personal information form” means, (a) a completed Schedule 1 of Appendix A in the form that was in effect from March 17, 2008 until May 14, 2013, or (b) a completed TSX/TSXV personal information form to which is attached a completed certificate and consent in the form that was in effect from March 17, 2008 until May 14, 2013;
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 9 “principal securityholder” means a person who beneficially owns, or controls or directs, directly or indirectly, voting securities carrying 10% or more of the voting rights attached to any class of voting securities of the issuer; “private issuer” has the same meaning as in section 2.4 of Regulation 45-106 respecting Prospectus Exemptions; “profit or loss attributable to owners of the parent” has the same meaning as in Canadian GAAP applicable to publicly accountable enterprises; “profit or loss from continuing operations attributable to owners of the parent” has the same meaning as in Canadian GAAP applicable to publicly accountable enterprises; “publicly accountable enterprise” has the same meaning as in Part 3 of Regulation 52-107 respecting Acceptable Accounting Principles and Auditing Standards; “related credit supporter” of an issuer means a credit supporter of the issuer that is an affiliate of the issuer; “restricted security” means an equity security that is not a preferred security of an issuer if any of the following apply:
(a) there is another class of securities of the issuer that carries a greater number of votes per security relative to the equity security, (b) the conditions attached to the class of equity securities, the conditions attached to another class of securities of the issuer, or the issuer’s constating documents have provisions that nullify or significantly restrict the voting rights of the equity securities, (c) the issuer has issued another class of equity securities that entitle the owners of securities of that other class to participate in the earnings or assets of the issuer to a greater extent, on a per security basis, than the owners of the first class of equity securities, or (d) except in Ontario and British Columbia, the regulator or, in Québec, the securities regulatory authority determines that the equity security is a restricted security; “restricted security reorganization” means any event resulting in the creation of restricted securities, directly or through the creation of subject securities or securities that are, directly or indirectly, convertible, or exercisable or exchangeable for, restricted securities or subject securities or any change in the rights attaching to restricted securities, subject securities or securities that are, directly or indirectly, convertible into, or exercisable or exchangeable for, restricted securities or subject securities, including (a) any
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 10 (i) amendment to an issuer’s constating documents, (ii) resolution of the board of directors of an issuer setting the terms of a series of securities of the issuer, or (iii) restructuring, recapitalization, reclassification, arrangement, amalgamation or merger, or (b) if the issuer has one or more classes of restricted securities outstanding, an amendment to an issuer’s constating documents to increase (i) the per security voting rights attached to any class of securities without at the same time making a proportionate increase in the per security voting rights attached to any other securities of the issuer, or (ii) the number of a class of securities authorized, other than a restricted security; “restricted security term” means each of the terms “non-voting security”, “subordinate voting security”, and “restricted voting security”; “restricted voting security” means a restricted security that carries a right to vote subject to a restriction on the number or percentage of securities that may be voted or owned by one or more persons, unless the restriction is (a) permitted or prescribed by statute or regulation, and (b) is applicable only to persons that are not citizens or residents of Canada or that are otherwise considered as a result of any law applicable to the issuer to be nonCanadians; “restructuring transaction” has the same meaning as in section 1.1 of Regulation 51-102 respecting Continuous Disclosure Obligations; “retrospective” has the same meaning as in section 1.1 of Regulation 51-102 respecting Continuous Disclosure Obligations; “retrospectively” has the same meaning as in section 1.1 of Regulation 51-102 respecting Continuous Disclosure Obligations; “reverse takeover” has the same meaning as in section 1.1 of Regulation 51-102 respecting Continuous Disclosure Obligations; “reverse takeover acquirer” has the same meaning as in section 1.1 of Regulation 51-102 respecting Continuous Disclosure Obligations;
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 11 “road show” means a presentation to potential investors, regarding a distribution of securities under a prospectus, conducted by one or more investment dealers on behalf of an issuer in which one or more executive officers, or other representatives, of the issuer participate; “SEC issuer” has the same meaning as in section 1.1 of Regulation 52-107 respecting Acceptable Accounting Principles and Auditing Standards; “short form prospectus” means a prospectus filed in the form of Form 44-101F1 of Regulation 44-101 respecting Short Form Prospectus Distributions (chapter V-1.1, r. 16); “special warrant” means a security that, by its terms or the terms of an accompanying contractual obligation, (a) entitles or requires the holder to acquire another security without payment of material additional consideration and obliges the issuer of either security to undertake efforts to file a prospectus to qualify the distribution of the other security, or (b) entitles or requires the holder to acquire another security without payment of material additional consideration and the issuer files a prospectus to qualify the distribution of the other security; “standard term sheet” means a written communication intended for potential investors regarding a distribution of securities under a prospectus that contains no information other than that referred to in subsections 13.5(2) and (3), subsections 13.6(2) and (3), subsections 7.5(2) and (3) of Regulation 44-101 respecting Short Form Prospectus Distributions, subsections 9A.2(2) and (3) of Regulation 44-102 respecting Shelf Distributions or subsections 4A.2(2) and (3) of Regulation 44-103 respecting PostReceipt Pricing, relating to an issuer, securities or an offering, but does not include the following:
(a) a preliminary prospectus notice;
(b) a final prospectus notice;
“subject security” means a security that results, or would result if and when issued, in an existing class of securities being considered restricted securities; “subordinate voting security” means a restricted security that carries a right to vote, if there are securities of another class outstanding that carry a greater right to vote on a per security basis; “successor credit rating organization” has the same meaning as in Regulation 44-101 respecting Short Form Prospectus Distributions;
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 12 “template version” means a version of a document with spaces for information to be added in accordance with any of the following:
(a) subsection 13.7(2) or 13.8(2);
(b) subsection 7.6(2) of Regulation 44-101 respecting Short Form Prospectus Distributions; (c) subsection 9A.3(2) of Regulation 44-102 respecting Shelf Distributions; (d) subsection 4A.3(3) of Regulation 44-103 respecting Post-Receipt Pricing; “transition year” means the financial year of an issuer or business in which the issuer or business changes its financial year-end; “TSX/TSXV personal information form” means a personal information form for an individual pursuant to Toronto Stock Exchange Form 4 or TSX Venture Exchange Form 2A, each as amended from time to time; “U.S. AICPA GAAS” has the same meaning as in section 1.1 of Regulation 52-107 respecting Acceptable Accounting Principles and Auditing Standards; “U.S. GAAP” has the same meaning as in section 1.1 of Regulation 52-107 respecting Acceptable Accounting Principles and Auditing Standards; “U.S. marketplace” has the same meaning as in section 1.1 of Regulation 51-102 respecting Continuous Disclosure Obligations; “U.S. PCAOB GAAS” has the same meaning as in section 1.1 of Regulation 52-107 respecting Acceptable Accounting Principles and Auditing Standards; “venture issuer” has the same meaning as in section 1.1 of Regulation 51-102 respecting Continuous Disclosure Obligations except the "applicable time" is the date the prospectus is filed; “waiting period” means the period of time between the issuance of a receipt by the regulator or, in Québec, the securities regulatory authority for a preliminary prospectus and the issuance of a receipt by the regulator or, in Québec, the securities regulatory authority for a final prospectus. _______________ M.O. 2008-05, s. 1.1; M.O. 2010-17, s. 1; M.O. 2013-03, s. 1; M.O. 2013-08, s. 1; M.O. 2013-13, s. 1; M.O. 2015-15, s. 1; M.O. 2017-04, s. 1; M.O. 2018-03, a. 1; M.O. 2018-07, s. 1.
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1.2. Interpretation of “prospectus”, “preliminary prospectus”, “final
prospectus”, “long form prospectus”, and “short form prospectus” (1) In this Regulation, a reference to a “prospectus” includes a preliminary long form prospectus, a final long form prospectus, a preliminary short form prospectus, and a final short form prospectus. (2) In this Regulation, a reference to a “preliminary prospectus” includes a preliminary long form prospectus and a preliminary short form prospectus. (3) In this Regulation, a reference to a “final prospectus” includes a final long form prospectus and a final short form prospectus. (4) In this Regulation, a reference to a “long form prospectus” includes a preliminary long form prospectus and a final long form prospectus. (5) In this Regulation, a reference to a “short form prospectus” includes a preliminary short form prospectus and a final short form prospectus. (6) Despite subsections (1), (2), and (3), in Form 41-101F1, Form 41-101F2, Form 41- 101F3 and Form 41-101F4, (a) a reference to a “prospectus” only includes a preliminary long form prospectus and a final long form prospectus, (b) a reference to a “preliminary prospectus” only includes a preliminary long form prospectus, and (c) a reference to a “final prospectus” only includes a final long form prospectus. _______________ M.O. 2008-05, s. 1.2; M.O. 2013-08, s. 2; M.O. 2017-04, s. 2.
1.3. Interpretation of “business”
In this Regulation, unless otherwise stated, a reference to a business includes an interest in an oil and gas property to which reserves, as defined in Regulation 51-101 respecting Standards of Disclosure for Oil and Gas Activities (chapter V-1.1, r. 23), have been specifically attributed. _______________ M.O. 2008-05, s. 1.3.
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1.4. Interpretation of “affiliate”
In this Regulation, an issuer is an affiliate of another issuer if the issuer would be an affiliate of the other issuer under subsection 1.1(2) of Regulation 51-102 respecting Continuous Disclosure Obligations (chapter V-1.1, r. 24). _______________ M.O. 2008-05, s. 1.4.
1.5. Interpretation of “payments to be made”
For the purposes of the definition of “full and unconditional credit support”, payments to be made by an issuer of securities as stipulated in the terms of the securities include (a) any amounts to be paid as dividends in accordance with, and on the dividend payment dates stipulated in, the provisions of the securities, whether or not the dividends have been declared, and (b) any discretionary dividends, provided that the terms of the securities or an agreement governing rights of holders of the securities expressly provides that the holder of the securities will be entitled, once the discretionary dividend is declared, to receive payment from the credit supporter within 15 days of any failure by the issuer to pay the declared dividend. _______________ M.O. 2008-05, s. 1.5.
PART 2 REQUIREMENTS FOR ALL PROSPECTUS DISTRIBUTIONS
2.1 Application of the Regulation
(1) Subject to subsection (2), this Regulation applies to a prospectus filed under securities legislation, a distribution of securities subject to the prospectus requirement and a purchase of securities of an ETF. (2) This Regulation does not apply to a prospectus filed under Regulation 81-101 respecting Mutual Fund Prospectus Disclosure (chapter V-1.1, r. 38) or a distribution of securities under such a prospectus. _______________ M.O. 2008-05, s. 2.1; M.O. 2017-04, s. 3.
2.2. Language
(1) An issuer must file a prospectus and any other document required to be filed under this Regulation or Regulation 44-101 respecting Short Form Prospectus Distributions (chapter V-1.1, r. 16) in French or in English.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 15 (2) In Québec, a prospectus and any document required to be incorporated by reference into a prospectus must be in French or in French and English. (3) Despite subsection (1), if an issuer files a document only in French or only in English but delivers to an investor or prospective investor a version of the document in the other language, the issuer must file that other version not later than when it is first delivered to the investor or prospective investor. (4) If an issuer files a document under this Regulation that is a translation of a document prepared in a language other than French or English, the issuer must (a) attach a certificate as to the accuracy of the translation to the filed document, and (b) make a copy of the document in the original language available on request. _______________ M.O. 2008-05, s. 2.2.
2.3. General requirements
(1) An issuer must not file its first amendment to a preliminary prospectus more than 90 days after the date of the receipt for the preliminary prospectus. (1.1) An issuer must not file a final prospectus more than 90 days after the date of the receipt for the preliminary prospectus or an amendment to the preliminary prospectus which relates to the final prospectus. (1.2) If an issuer files an amendment to a preliminary prospectus, the final prospectus must be filed within 180 days from the date of the receipt of the preliminary prospectus. (2) An issuer must not file (a) a prospectus more than 3 business days after the date of the prospectus, and (b) an amendment to a prospectus more than 3 business days after the date of the amendment to the prospectus. _______________ M.O. 2008-05, s. 2.3; M.O. 2013-03, s. 2.
2.4. Special warrants
(1) An issuer must not file a prospectus or an amendment to a prospectus to qualify the distribution of securities issued upon the exercise of special warrants or other
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 16 securities acquired on a prospectus-exempt basis unless holders of the special warrants or other securities have been provided with a contractual right of rescission. (2) A contractual right of rescission under subsection (1) must provide that, if a holder of a special warrant who acquires another security of the issuer on exercise of the special warrant as provided for in the prospectus is, or becomes, entitled under the securities legislation of a jurisdiction to the remedy of rescission because of the prospectus or an amendment to the prospectus containing a misrepresentation, (a) the holder is entitled to rescission of both the holder’s exercise of its special warrant and the private placement transaction under which the special warrant was initially acquired, (b) the holder is entitled in connection with the rescission to a full refund of all consideration paid to the underwriter or issuer, as the case may be, on the acquisition of the special warrant, and (c) if the holder is a permitted assignee of the interest of the original special warrant subscriber, the holder is entitled to exercise the rights of rescission and refund as if the holder was the original subscriber. _______________ M.O. 2008-05, s. 2.4.
PART 3 FORM OF PROSPECTUS
3.1. Form of prospectus
(1) Subject to subsections (2), (2.1) and (3), an issuer filing a prospectus must file the prospectus in the form of Form 41-101F1. (2) An issuer that is an investment fund, other than a scholarship plan, filing a prospectus must file the prospectus in the form of Form 41-101F2. (2.1) An issuer that is a scholarship plan filing a prospectus must file the prospectus in the form of Form 41-101F3. (3) An issuer that is qualified to file a short form prospectus may file a short form prospectus. _______________ M.O. 2008-05, s. 3.1; M.O. 2013-08, s. 3.
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PART 3A SCHOLARSHIP PLAN PROSPECTUS REQUIREMENTS
3A.1. Plain language and presentation
(1) A scholarship plan prospectus must be prepared using plain language and in a format that assists in readability and comprehension. (2) A scholarship plan prospectus must (a) present all information briefly and concisely, (b) present the items listed in Parts A to D of Form 41-101F3 in the order set out in those parts, (c) use only the headings and sub-headings prescribed by Form 41-101F3 unless stated otherwise, (d) contain only information that is specifically mandated or permitted by Form 41-101F3, and (e) not incorporate by reference into the scholarship plan prospectus, information that is required to be included in a scholarship plan prospectus. (3) A plan summary must (a) be prepared for each scholarship plan offered under a scholarship plan prospectus or multiple scholarship plan prospectus, and (b) not exceed 4 pages in length. _______________ M.O. 2013-08, s. 4. 3A.2. Combinations of documents (1) Subject to subsection (2), a scholarship plan prospectus may be consolidated with one or more scholarship plan prospectuses to a form a multiple scholarship plan prospectus. (2) A scholarship plan prospectus must not be consolidated with one or more scholarship plan prospectuses to form a multiple scholarship plan prospectus unless the portions of each scholarship plan prospectus prepared in accordance with the requirements of Parts B and D of Form 41-101F3 are substantially similar. _______________ M.O. 2013-08, s. 4.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 18 3A.3. Order of contents of bound documents If documents are attached to, or bound with, a scholarship plan prospectus or multiple scholarship plan prospectus (a) the scholarship plan prospectus or multiple scholarship plan prospectus must be the first document contained in the package, and (b) no pages must come before the scholarship plan prospectus or multiple scholarship plan prospectus other than, at the option of the scholarship plan, a general front cover and table of contents pertaining to the entire package. _______________ M.O. 2013-08, s. 4. 3A.4. Plan summary (1) Despite section 3A.3, a plan summary must not be attached to, or bound with, any other part of a scholarship plan prospectus, or to any other document, except as provided in this section. (2) A plan summary of a scholarship plan may be attached to or bound with one or more plan summaries of other scholarship plans if the binding, to a reasonable person, would help present the information in a simple, accessible and comparable format. _______________ M.O. 2013-08, s. 4. 3A.5 Documents to be delivered or sent upon request (1) On request by a person, a scholarship plan must deliver or send a copy of one or more the following documents free of charge to the person:
(a) the scholarship plan prospectus or multiple scholarship plan prospectus; (b) any document incorporated by reference into the scholarship plan prospectus; (c) any portion of a document described in paragraph (a) or (b). (2) A document requested under subsection (1) must be delivered or sent within 3 business days of receipt of the request. _______________ M.O. 2013-08, s. 4.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 19
PART 3B ETF FACTS DOCUMENT REQUIREMENTS
3B.1. Application
This Part applies only to an ETF.
M.O. 2017-04, s. 4.
3B.2. Plain language and presentation
(1) An ETF facts document must be prepared using plain language and be in a format that assists in readability and comprehension. (2) An ETF facts document must (a) be prepared for each class and each series of securities of an ETF in accordance with Form 41-101F4, (b) present the items listed in the Part I section of Form 41-101F4 and the items listed in the Part II section of Form 41-101F4 in the order stipulated in those parts, (c) use the headings and sub-headings stipulated in Form 41-101F4, (d) contain only the information that is specifically required or permitted to be in Form 41-101F4, (e) not incorporate any information by reference, and (f) not exceed 4 pages in length. _______________ M.O. 2017-04, s. 4. 3B.3. Preparation in the required form Despite provisions in securities legislation relating to the presentation of the content of a prospectus, an ETF facts document for an ETF must be prepared in accordance with this Regulation. _______________ M.O. 2017-04, s. 4. 3B.4. Websites (1) If an ETF or the ETF’s family has a website, the ETF must post to at least one of those websites an ETF facts document filed under this Part as soon as practicable and, in any event, within 10 days after the date that the document is filed.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 20 (2) An ETF facts document posted to the website referred to in subsection (1) must (a) be displayed in a manner that would be considered prominent to a reasonable person; and (b) not be combined with another ETF facts document. (3) Subsection (1) does not apply if the ETF facts document is posted to a website of the manager of the ETF in the manner required under subsection (2). _______________ M.O. 2017-04, s. 4.
PART 3C DELIVERY OF ETF FACTS DOCUMENTS FOR INVESTMENT FUNDS
3C.1. Application
This Part applies only to an ETF.
M.O. 2017-04, s. 4.
3C.2. Obligation to deliver ETF facts documents (1) The obligation to deliver or send a prospectus under securities legislation does not apply in respect of an ETF. (2) A dealer acting as agent for a purchaser who receives an order for the purchase of a security of an ETF must, unless the dealer has previously done so, deliver or send to the purchaser the most recently filed ETF facts document for the applicable class or series of securities of the ETF not later than midnight on the second business day after entering into the purchase of the security. (3) In Nova Scotia, an ETF facts document is a prescribed disclosure document for the purposes of subsection 76(1A) of the Securities Act (R.S.N.S. 1989, c. 418). (4) In Nova Scotia, a security of an ETF is a prescribed investment fund security for the purposes of subsections 76(1B) and (1C) of the Securities Act. (5) In Ontario, an ETF facts document is a disclosure document prescribed under subsection 71(1.1) of the Securities Act (R.S.O. 1990, c. S.5). (6) In Ontario, a security of an ETF is an investment fund security prescribed for the purposes of subsections 71(1.2) and (1.3) of the Securities Act. _______________ M.O. 2017-04, s. 4.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 21 3C.3. Combinations of ETF facts documents for delivery purposes (1) An ETF facts document delivered or sent under section 3C.2 must not be combined with any other materials or documents including, for greater certainty, another ETF facts document, except one or more of the following:
(a) a general front cover pertaining to the package of combined materials and documents; (b) a trade confirmation which discloses the purchase of securities of the ETF; (c) an ETF facts document of another ETF if that ETF facts document is also being delivered or sent under section 3C.2; (d) the prospectus of the ETF; (e) any material or document incorporated by reference into the prospectus; (f) an account application document; (g) a registered tax plan application or related document. (2) If a trade confirmation referred to in subsection (1)(b) is combined with an ETF facts document, any other disclosure documents required to be delivered or sent to satisfy a regulatory requirement for purchases listed in the trade confirmation may be combined with the ETF facts document. (3) If an ETF facts document is combined with any of the materials or documents referred to in subsection (1), a table of contents specifying all documents must be combined with the ETF facts document, unless the only other documents combined with the ETF facts document are the general front cover permitted under paragraph (1)(a) or the trade confirmation permitted under paragraph (1)(b). (4) If one or more ETF facts documents are combined with any of the materials or documents referred to in subsection (1), only the general front cover permitted under paragraph (1)(a), the table of contents required under subsection (3) and the trade confirmation permitted under paragraph (1)(b) may be placed in front of those ETF facts documents. _______________ M.O. 2017-04, s. 4.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 22 3C.4. Combinations of ETF facts documents for filing purposes For the purposes of sections 6.2, 9.1 and 9.2, an ETF facts document may be combined with another ETF facts document in a prospectus. _______________ M.O. 2017-04, s. 4. 3C.5. Time of receipt (1) For the purpose of this Part, where the latest ETF facts document referred to in subsection 3C.2(2) is sent by prepaid mail, it shall be deemed conclusively to have been received in the ordinary course of mail by the person to whom it was addressed. (2) Subsection (1) does not apply in Ontario. (3) Subsection (1) does not apply in Québec. _______________ M.O. 2017-04, s. 4. 3C.6. Dealer as agent (1) For the purpose of this Part, a dealer acts as agent of the purchaser if the dealer is acting solely as agent of the purchaser with respect to the purchase and sale in question and has not received and has no agreement to receive compensation from or on behalf of the vendor with respect to the purchase and sale. (2) Subsection (1) does not apply in Ontario. (3) Subsection (1) does not apply in Québec. (4) Subsection (1) does not apply in British Columbia. _______________ M.O. 2017-04, s. 4; I.N. 2020-05-01. 3C.7. Purchaser’s right of action for failure to deliver or send (1) A purchaser has a right of action if an ETF facts document is not delivered or sent as required by subsection 3C.2(2), as the purchaser would otherwise have when a prospectus is not delivered or sent as required under securities legislation and, for that purpose, an ETF facts document is a prescribed document under the statutory right of action. (2) In Alberta, instead of subsection (1), section 206 of the Securities Act (R.S.A. 2000. c. S-4) applies.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 23 (3) In Manitoba, instead of subsection (1), section 141.2 of the Securities Act (C.C.S.M. c. S50) applies and the ETF facts document is a prescribed document for the purposes of section 141.2. (4) In Nova Scotia, instead of subsection (1), section 141 of the Securities Act (R.S.N.S. 1989, c. 418) applies. (5) In Ontario, instead of subsection (1), section 133 of the Securities Act (R.S.O. 1990, c. S.5) applies. (6) In Québec, instead of subsection (1), section 214.1 of the Securities Act (chapter V-1.1) applies. (7) In British Columbia, for the purpose of subsection (1), “statutory right of action” means section 135 of the Securities Act. (R.S.B.C. 1996, c. 418). _______________ M.O. 2017-04, s. 4, I.N. 2020-05-01.
PART 4 FINANCIAL STATEMENTS AND RELATED DOCUMENTS IN A LONG
FORM PROSPECTUS
4.1. Application
(1) An issuer, other than an investment fund, that files a long form prospectus must include in the long form prospectus the financial statements and the management’s discussion and analysis required by this Regulation. (2) Subject to Part 15, an investment fund that files a long form prospectus must include in the long form prospectus the financial statements and the management reports of fund performance required by this Regulation. (3) For the purposes of this Part, “financial statements” do not include pro forma financial statements. _______________ M.O. 2008-05, s. 4.1.
4.2. Audit of financial statements
(1) Any financial statements included in a long form prospectus filed in the form of Form 41-101F1 must be audited in accordance with Regulation 52-107 respecting Acceptable Accounting Principles and Auditing Standards (chapter V-1.1, r. 25) unless an exception in section 32.5 or subsection 35.1(3) of Form 41-101F1 applies. (2) Any financial statements, other than an interim financial report, included in or incorporated by reference into a long form prospectus of an investment fund filed in the form of From 41-101F2 or From 41-101F3 must meet the audit requirements of Part 2 of
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 24 Regulation 81-106 respecting Investment Fund Continuous Disclosure (chapter V-1.1, r. 42). _______________ M.O. 2008-05, s. 4.2; M.O. 2010-17, s. 2; M.O. 2013-08, s. 5.
4.3. Review of unaudited financial statements
(1) Any unaudited financial statements included in, or incorporated by reference into, a long form prospectus must have been reviewed in accordance with the relevant standards set out in the Handbook for a review of financial statements by the person's auditor or a review of financial statements by a public accountant. (2) Subsection (1) does not apply to an investment fund's unaudited financial statements filed after the date of filing of the prospectus that are incorporated by reference into the prospectus under Part 15. (3) If Regulation 52-107 respecting Acceptable Accounting Principles and Auditing Standards (chapter V-1.1, r. 25) permits the financial statements of the person in subsection (1) to be audited in accordance with (a) U.S. AICPA GAAS, the unaudited financial statements may be reviewed in accordance with the review standards issued by the American Institute of Certified Public Accountants; (a.1) U.S. PCAOB GAAS, the unaudited financial statements may be reviewed in accordance with the review standards issued by the Public Company Accounting Oversight Board (United States of America); (b) International Standards on Auditing, the unaudited financial statements may be reviewed in accordance with International Standards on Review Engagement issued by the International Auditing and Assurance Standards Board, or (c) auditing standards that meet the foreign disclosure requirements of the designated foreign jurisdiction to which the person is subject, the unaudited financial statements (i) may be reviewed in accordance with review standards that meet the foreign disclosure requirements of the designated foreign jurisdiction, or (ii) do not have to be reviewed if (A) the designated foreign jurisdiction does not have review standards for unaudited financial statements, and
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 25 (B) the long form prospectus includes disclosure that the unaudited financial statements have not been reviewed. _______________ M.O. 2008-05, s. 4.3; M.O. 2010-17, s. 3.
4.4. Approval of financial statements and related documents
(1) An issuer must not file a long form prospectus unless each financial statement, each management’s discussion and analysis, and each management report of fund performance, as applicable, of a person included in, or incorporated by reference into, the long form prospectus has been approved by the board of directors of the person. (2) An investment fund that is a trust must not file a long form prospectus unless each financial statement and each management report of fund performance of the investment fund included in, or incorporated by reference into, the long form prospectus has been approved by the trustee or trustees of the investment fund or another person authorized to do so by the constating documents of the investment fund. _______________ M.O. 2008-05, s. 4.4.
PART 5 CERTIFICATES
5.1. Interpretation
For the purposes of this Part,
(a) “issuer certificate form” means a certificate in the form set out in (i) section 37.2 of Form 41-101F1, (ii) section 39.1 of Form 41-101F2, (ii.1) section 9.1 of Part D of Form 41-101F3, (iii) section 21.2 of Form 44-101F1, (iv) Regulation 44-102 respecting Shelf Distributions (chapter V-1.1, r. 17) in (A) section 1.1 of Appendix A, (B) section 2.1 of Appendix A, (C) section 1.1 of Appendix B, or (D) section 2.1 of Appendix B, or
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 26 (v) Regulation 44-103 respecting Post-Receipt Pricing (chapter V-1.1, r.
18) in
(A) paragraph 7 of subsection 3.2(1), or
(B) paragraph 3 of subsection 4.5(2), and
(b) “underwriter certificate form” means a certificate in the form set out in (i) section 37.3 of Form 41-101F1, (ii) section 39.3 of Form 41-101F2, (ii.1) section 9.3 of Part D of Form 41-101F3, (iii) section 21.3 of Form 44-101F1, (iv) Regulation 44-102 respecting Shelf Distributions in (A) section 1.2 of Appendix A, (B) section 2.2 of Appendix A, (C) section 1.2 of Appendix B, or (D) section 2.2 of Appendix B, or (v) Regulation 44-103 respecting Post-Receipt Pricing in (A) paragraph 8 of subsection 3.2(1), or (B) paragraph 4 of subsection 4.5(2). _______________ M.O. 2008-05, s. 5.1; M.O. 2013-08, s. 6.
5.2. Date of certificates
The date of the certificates in a prospectus or an amendment to a prospectus must be the same as the date of the prospectus or the amendment to the prospectus, as applicable. _______________ M.O. 2008-05, s. 5.2.
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5.3. Certificate of issuer
(1) Except in Ontario, a prospectus must contain a certificate signed by the issuer. (2) A prospectus certificate that is required to be signed by the issuer under this Regulation or other securities legislation must be in the applicable issuer certificate form. _______________ M.O. 2008-05, s. 5.3.
5.4. Corporate issuer
(1) Except in Ontario, if the issuer is a company, a prospectus certificate that is required to be signed by the issuer under this Regulation or other securities legislation must be signed (a) by the chief executive officer and the chief financial officer of the issuer, and (b) on behalf of the board of directors, by (i) any 2 directors of the issuer, other than the persons referred to in paragraph (a) above, or (ii) if the issuer has only 3 directors, 2 of whom are the persons referred to in paragraph (a), all of the directors of the issuer. (2) Except in Ontario, if the regulator or, in Québec, the securities regulatory authority is satisfied that either or both of the chief executive officer or chief financial officer cannot sign a certificate in a prospectus, the regulator or, in Québec, the securities regulatory authority may accept a certificate signed by another officer. _______________ M.O. 2008-05, s. 5.4.
5.5. Trust issuer
(1) If the issuer is a trust, a prospectus certificate that is required to be signed by the issuer under this Regulation or other securities legislation must be signed by (a) the individuals who perform functions for the issuer similar to those performed by the chief executive officer and the chief financial officer of a company, and (b) 2 trustees of the issuer, on behalf of the trustees of the issuer. (2) If a trustee that is signing the certificate of the issuer is (a) an individual, the individual must sign the certificate,
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 28 (b) a company, the certificate must be signed (i) by the chief executive officer and the chief financial officer of the trustee, and (ii) on behalf of the board of directors of the trustee, by (A) any 2 directors of the trustee, other than the persons referred to in subparagraph (i), or (B) if the trustee has only 3 directors, 2 of whom are the persons referred to in subparagraph (i), all of the directors of the trustee, (c) a limited partnership, the certificate must be signed by each general partner of the limited partnership as described in subsection 5.6(2) in relation to an issuer that is a limited partnership, or (d) not referred to in paragraphs (a), (b) or (c), the certificate may be signed by any person with authority to bind the trustee. (3) Despite subsections (1) and (2), if the issuer is an investment fund and the declaration of trust, trust indenture or trust agreement establishing the investment fund delegates the authority to do so, or otherwise authorizes an individual or company to do so, the certificate may be signed by the individual or company to whom the authority is delegated or that is authorized to sign the certificate. (4) Despite subsections (1) and (2), if the trustees of an issuer, other than an investment fund, do not perform functions for the issuer similar to those performed by the directors of a company, the trustees are not required to sign the prospectus certificate of the issuer provided that at least 2 individuals who do perform functions for the issuer similar to those performed by the directors of a company sign the certificate. (5) If the regulator or, in Québec, the securities regulatory authority is satisfied that an individual who performs functions for the issuer similar to those performed by either the chief executive officer or the chief financial officer of a company cannot sign a certificate in a prospectus, the regulator or, in Québec, the securities regulatory authority may accept a certificate signed by another individual. _______________ M.O. 2008-05, s. 5.5.
5.6. Limited partnership issuer
(1) If the issuer is a limited partnership, a prospectus certificate that is required to be signed by the issuer under this Regulation or other securities legislation must be signed by
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 29 (a) the individuals who perform functions for the issuer similar to those performed by the chief executive officer and the chief financial officer of a company, and (b) each general partner of the issuer. (2) If a general partner of the issuer is (a) an individual, the individual must sign the certificate, (b) a company, the certificate must be signed (i) by the chief executive officer and the chief financial officer of the general partner, and (ii) on behalf of the board of directors of the general partner, by (A) any 2 directors of the general partner, other than the persons referred to in subparagraph (i), or (B) if the general partner has only 3 directors, 2 of whom are the persons referred to in subparagraph (i), all of the directors of the general partner, (c) a limited partnership, the certificate must be signed by each general partner of the limited partnership and, for greater certainty, this subsection applies to each general partner required to sign, (d) a trust, the certificate must be signed by the trustees of the general partner as described in subsection 5.5(2) in relation to an issuer that is a trust, or (e) not referred to in paragraphs (a) to (d), the certificate may be signed by any person with authority to bind the general partner. (3) If the regulator or, in Québec, the securities regulatory authority is satisfied that an individual who performs functions for the issuer similar to those performed by either the chief executive officer or the chief financial officer of a company cannot sign a certificate in a prospectus, the regulator or, in Québec, the securities regulatory authority may accept a certificate signed by another individual. _______________ M.O. 2008-05, s. 5.6.
5.7. Other issuer
If an issuer is not a company, trust or limited partnership, a prospectus certificate that is required to be signed by the issuer under this Regulation or other securities legislation must be signed by the persons that, in relation to the issuer, are in a similar
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 30 position or perform a similar function to the persons required to sign under sections 5.4 to 5.6. _______________ M.O. 2008-05, s. 5.7.
5.8. Reverse takeovers
Except in Ontario, if an issuer is involved in a proposed reverse takeover that has progressed to a state where a reasonable person would believe that the likelihood of the reverse takeover being completed is high, a prospectus must contain a certificate, in the applicable issuer certificate form, signed (a) by the chief executive officer and the chief financial officer of the reverse takeover acquirer, and (b) on behalf of the board of directors of the reverse takeover acquirer, by (i) any 2 directors of the reverse takeover acquirer, other than the persons referred to in paragraph (a) above, or (ii) if the reverse takeover acquirer has only 3 directors, 2 of whom are the persons referred to in paragraph (a), all of the directors of the reverse takeover acquirer. _______________ M.O. 2008-05, s. 5.8.
5.9. Certificate of underwriter
(1) Except in Ontario, a prospectus must contain a certificate signed by each underwriter who, with respect to the securities offered by the prospectus, is in a contractual relationship with the issuer or a securityholder whose securities are being offered by the prospectus. (2) A prospectus certificate that is required to be signed by an underwriter under this Regulation or other securities legislation must be in the applicable underwriter certificate form. (3) Except in Ontario, with the consent of the regulator or, in Québec, the securities regulatory authority, a certificate in a prospectus may be signed by the underwriter’s agent duly authorized in writing by the underwriter. _______________ M.O. 2008-05, s. 5.9.
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5.10. Certificate of investment fund manager
(1) If the issuer has an investment fund manager, a prospectus must contain a certificate, in the applicable issuer certificate form, signed by the investment fund manager. (2) If the investment fund manager is a company, the certificate must be signed (a) by the chief executive officer and the chief financial officer of the investment fund manager, and (b) on behalf of the board of directors, by (i) any 2 directors of the investment fund manager, other than the persons referred to in paragraph (a) above, or (ii) if the investment fund manager has only 3 directors, 2 of whom are the persons referred to in paragraph (a), all of the directors of the investment fund manager. (3) If the investment fund manager is a limited partnership, the certificate must be signed by the general partner of such limited partnership as described in subsection 5.6(2) in relation to an issuer that is a limited partnership. _______________ M.O. 2008-05, s. 5.10.
5.10.1. Certificate of principal distributor
(1) If the issuer is an investment fund that has a principal distributor, a prospectus must contain a certificate, in the applicable underwriter certificate form, signed by the principal distributor. (2) The certificate to be signed by the principal distributor must be signed by an officer or director of the principal distributor who is authorized to sign. _______________ M.O. 2013-03, s. 3.
5.11. Certificate of promoter
(1) Except in Ontario, a prospectus must contain a certificate signed by each promoter of the issuer. (2) A prospectus certificate required to be signed by a promoter under this Regulation or other securities legislation must be in the applicable issuer certificate form.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 32 (3) Except in Ontario, the regulator or, in Québec, the securities regulatory authority may require any person who was a promoter of the issuer within the 2 preceding years to sign a certificate to the prospectus, in the applicable issuer certificate form. (4) Despite subsection (3), in British Columbia, the powers of the regulator with respect to the matters described in subsection (3) are set out in the Securities Act (R.S.B.C. 1996, c. 418). (5) Except in Ontario, with the consent of the regulator or, in Québec, the securities regulatory authority, a certificate of a promoter in a prospectus may be signed by an agent duly authorized in writing by the person required to sign the certificate. _______________ M.O. 2008-05, s. 5.11.
5.12. Certificate of credit supporter
(1) If there is a related credit supporter of the issuer or a subsidiary of the issuer, a prospectus must contain a certificate of the related credit supporter, in the applicable issuer certificate form, signed (a) by the chief executive officer and the chief financial officer of the credit supporter, and (b) on behalf of the board of directors of the credit supporter, by (i) any 2 directors of the credit supporter, other than the persons referred to in paragraph (a) above, or (ii) if the credit supporter has only 3 directors, 2 of whom are the persons referred to in paragraph (a), all of the directors of the credit supporter. (2) With the consent of the regulator or, in Québec, the securities regulatory authority, a certificate in a prospectus may be signed by the credit supporter’s agent duly authorized in writing by the credit supporter. (3) Except in Ontario, the regulator or, in Québec, the securities regulatory authority may require any other person that is a credit supporter of either the issuer or a subsidiary of the issuer to sign a certificate to the prospectus, in the applicable issuer certificate form. (4) Despite subsection (3), in British Columbia, the powers of the regulator with respect to the matters described in subsection (3) are set out in the Securities Act (R.S.B.C. 1996, c. 418). _______________ M.O. 2008-05, s. 5.12.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 33
5.13. Certificate of selling securityholders
(1) Except in Ontario, the regulator or, in Québec, the securities regulatory authority may require any person that is a selling securityholder to sign a certificate to the prospectus, in the applicable issuer certificate form. (2) Despite subsection (1), in British Columbia, the powers of the regulator with respect to the matters described in subsection (1) are set out in the Securities Act (R.S.B.C. 1996, c. 418). _______________ M.O. 2008-05, s. 5.13.
5.14. Certificate of operating entity
(1) For the purposes of this section, the term “operating entity” means, in relation to an issuer, a person through which the business of the issuer, or a material part of the business of the issuer, is conducted and for which the issuer is required under securities legislation, or has undertaken, to provide to its securityholders separate financial statements of the person if the issuer’s financial statements do not include consolidated information concerning the person. (2) A prospectus of an issuer that is a trust must contain a certificate, in the applicable issuer certificate form, signed (a) by the chief executive officer and the chief financial officer of the operating entity, and (b) on behalf of the board of directors of the operating entity, by (i) any 2 directors of the operating entity, other than the persons referred to in paragraph (a) above, or (ii) if the operating entity has only 3 directors, 2 of whom are the persons referred to in paragraph (a), all of the directors of the operating entity. _______________ M.O. 2008-05, s. 5.14.
5.15. Certificate of other persons
(1) Except in Ontario, the regulator or, in Québec, the securities regulatory authority may, in its discretion, require any person to sign a certificate to the prospectus, in the form that the regulator or, in Québec, the securities regulatory authority considers appropriate.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 34 (2) Despite subsection (1), in British Columbia, the powers of the regulator with respect to the matters described in subsection (1) are set out in the Securities Act (R.S.B.C. 1996, c. 418). _______________ M.O. 2008-05, s. 5.15.
PART 6 AMENDMENTS
6.1. Form of amendment
(1) An amendment to a prospectus must be either (a) an amendment that does not fully restate the text of the prospectus, or (b) an amended and restated prospectus. (2) An amendment to a prospectus must be identified as follows:
(a) for an amendment that does not restate the text of the prospectus:
“Amendment no. [insert amendment number] dated [insert date of amendment] to [identify prospectus] dated [insert date of prospectus being amended].”; or (b) for an amended and restated prospectus:
“Amended and restated [identify prospectus] dated [insert date of amendment], amending and restating [identify prospectus] dated [insert date of prospectus being amended].”
3) Despite subsections (1) and (2), an amendment to a plan summary must be
prepared in accordance with Part A of Form 41-101F3 without any further identification, and dated as of the date the plan summary is being amended. (4) An amendment to an ETF facts document must be prepared in accordance with Form 41-101F4 without any further identification, and dated as of the date the ETF facts document is being amended. _______________ M.O. 2008-05, s. 6.1; M.O. 2013-08, s. 7; M.O. 2017-04, s. 5.
6.2. Required documents for filing an amendment
An issuer that files an amendment to a prospectus must (a) file a signed copy of the amendment,
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 35 (b) deliver to the regulator or, in Québec, the securities regulatory authority a copy of the prospectus blacklined to show the changes made by the amendment, if the amendment is also a restatement of the prospectus, (c) file or deliver any supporting documents required under this Regulation or other securities legislation to be filed or delivered with a prospectus, unless the documents originally filed or delivered with the prospectus are correct as of the date the amendment is filed, and (d) in case of an amendment to a final prospectus, file any consent letter required to be filed with a final prospectus, dated as of the date of the amendment; (e) in the case of an ETF, if the amendment relates to information in the ETF facts document, (i) file an amendment to the ETF facts document, and (ii) deliver to the regulator or, in Québec, the securities regulatory authority a copy of the ETF facts document, blacklined to show changes, including text deletions, from the latest ETF facts document previously filed. _______________ M.O. 2008-05, s. 6.2; M.O. 2017-04, s. 6.
6.2.1. Required documents for filing an amendment to an ETF facts document
An ETF that files an amendment to an ETF facts document must, unless
section 6.2 applies,
(a) file an amendment to the corresponding prospectus, certified in accordance with Part 5, (b) deliver to the regulator or, in Québec, the securities regulatory authority a copy of the ETF facts document, blacklined to show changes, including text deletions, from the latest ETF facts document previously filed, and (c) file or deliver any other supporting documents required under this Regulation or other securities legislation, unless the documents originally filed or delivered are correct as of the date the amendment is filed. _______________ M.O. 2017-04, s. 7.
6.3. Auditor’s comfort letter
An issuer must deliver a new auditor’s comfort letter, if an amendment to
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 36 (a) a preliminary long form prospectus materially affects, or relates to, an auditor’s comfort letter delivered under subparagraph 9.1(b)(iii), (b) a preliminary short form prospectus materially affects, or relates to, an auditor’s comfort letter delivered under subparagraph 4.1(b)(ii) of Regulation 44-101 respecting Short Form Prospectus Distributions (chapter V-1.1, r. 16). _______________ M.O. 2008-05, s. 6.3.
6.4. Delivery of amendments
Except in Ontario, an issuer must deliver an amendment to a preliminary prospectus as soon as practicable to each recipient of the preliminary prospectus according to the record of recipients required to be maintained under securities legislation. _______________ M.O. 2008-05, s. 6.4.
6.5. Amendment to a preliminary prospectus
(1) Except in Ontario, if, after a receipt for a preliminary prospectus is issued but before a receipt for the final prospectus is issued, a material adverse change occurs, an amendment to the preliminary prospectus must be filed as soon as practicable, but in any event within 10 days after the day the change occurs. (2) The regulator or, in Québec, the securities regulatory authority must issue a receipt for an amendment to a preliminary prospectus as soon as practicable after the amendment is filed. _______________ M.O. 2008-05, s. 6.5.
6.6. Amendment to a final prospectus
(1) Except in Ontario, if, after a receipt for a final prospectus is issued but before the completion of the distribution under the final prospectus, a material change occurs, an issuer must file an amendment to the final prospectus as soon as practicable, but in any event within 10 days after the day the change occurs. (2) Except in Ontario, if, after a receipt for a final prospectus or an amendment to the final prospectus is issued but before the completion of the distribution under the final prospectus or the amendment to the final prospectus, securities in addition to the securities previously disclosed in the final prospectus or the amendment to the final prospectus are to be distributed, an amendment to the final prospectus disclosing the additional securities must be filed, as soon as practicable, but in any event within 10 days after the decision to increase the number of securities offered.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 37 (3) Except in Ontario, the regulator or, in Québec, the securities regulatory authority must issue a receipt for an amendment to a final prospectus filed under this section unless the regulator or, in Québec, the securities regulatory authority considers that there are grounds set out in securities legislation that would cause the regulator or, in Québec, the securities regulatory authority not to issue the receipt for a prospectus. (4) Except in Ontario, the regulator or, in Québec, the securities regulatory authority must not refuse to issue a receipt under subsection (3) without giving the issuer who filed the prospectus an opportunity to be heard or, in Québec, to present observations and, if applicable, to produce documents to complete its record. (5) Except in Ontario, an issuer must not proceed with a distribution or additional distribution if an amendment to a final prospectus is required to be filed until a receipt for the amendment to the final prospectus is issued by the regulator or, in Québec, the securities regulatory authority. (6) Subsection (5) does not apply to an investment fund in continuous distribution. _______________ M.O. 2008-05, s. 6.6.
PART 7 NON-FIXED PRICE OFFERINGS AND REDUCTION OF OFFERING
PRICE UNDER A FINAL PROSPECTUS
7.1. Application
This Part does not apply to an investment fund in continuous distribution. _______________ M.O. 2008-05, s. 7.1.
7.2. Non-fixed price offerings and reduction of offering price
(1) A person distributing a security under a prospectus must do so at a fixed price. (2) Despite subsection (1), and subject to subsection (2.1), securities may be distributed for cash at non-fixed prices under a prospectus if the securities have received a credit rating, on a provisional or final basis, from at least one designated rating organization or its DRO affiliate at the time of (a) the filing of the preliminary short form prospectus, if the issuer is filing a prospectus in the form of a short form prospectus under Regulation 44-101 respecting Short Form Prospectus Distributions (chapter V-1.1, r. 16), or (b) the filing of the long form prospectus. (2.1) If the only credit ratings of the securities referred to in subsection (2) are from Kroll Bond Rating Agency, Inc., its DRO affiliate, any successor credit rating organization of
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 38 Kroll Bond Rating Agency, Inc. or any DRO affiliate of any successor credit rating organization of Kroll Bond Rating Agency, Inc., subsection (2) does not apply unless the distribution is of asset-backed securities. (3) Despite subsection (1), if securities are distributed for cash under a prospectus, the price of the securities may be decreased from the initial offering price disclosed in the prospectus and, after such a decrease, changed from time to time to an amount not greater than the initial offering price, without filing an amendment to the prospectus to reflect the change, if (a) the securities are distributed through one or more underwriters that have agreed to purchase all of the securities at a specified price, (b) the proceeds to be received by the issuer or selling securityholders are disclosed in the prospectus as being fixed, and (c) the underwriters have made a reasonable effort to sell all of the securities distributed under the prospectus at the initial offering price disclosed in the final prospectus. (4) Despite subsections (2) and (3), the price at which securities may be acquired on exercise of rights must be fixed. _______________ M.O. 2008-05, s. 7.2; M.O. 2013-08, s. 8; M.O. 2018-03, a. 2.
PART 8 BEST EFFORTS DISTRIBUTIONS
8.1. Application
This Part does not apply to an investment fund in continuous distribution. _______________ M.O. 2008-05, s. 8.1.
8.2. Distribution period
(1) Unless an amendment to the final prospectus is filed and the regulator or, in Québec, the securities regulatory authority has issued a receipt for the amendment, if securities are being distributed on a best efforts basis, the distribution must cease within 90 days after the date of the receipt for the final prospectus. (2) Unless a further amendment to the final prospectus is filed and the regulator or, in Québec, the securities regulatory authority has issued a receipt for the further amendment, if an amendment to a final prospectus is filed and the regulator or, in Québec, the securities regulatory authority has issued a receipt for the amendment under subsection (1), the distribution must cease within 90 days after the date of the receipt for the amendment to the final prospectus.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 39 (3) The total period of the distribution under subsections (1) and (2) must not end more than 180 days from the date of receipt for the final prospectus. _______________ M.O. 2008-05, s. 8.2.
8.3. Minimum amount of funds
If securities are being distributed on a best efforts basis, other than an offering of securities to be distributed continuously, and the prospectus discloses that a minimum amount of funds must be raised, (a) the issuer must appoint a registered dealer authorized to make the distribution, a Canadian financial institution, or a lawyer who is a practicing member in good standing with a law society of a jurisdiction in which the securities are being distributed, or a notary in Québec, to hold in trust all funds received from subscriptions until the minimum amount of funds stipulated in the final prospectus has been raised, and (b) if the minimum amount of funds is not raised within the appropriate period of the distribution prescribed by section 8.2, the person holding the funds in trust referred to in paragraph (a) must return the funds to the subscribers without any deductions. _______________ M.O. 2008-05, s. 8.3.
PART 8A RIGHTS OFFERINGS
M.O. 2015-17, s. 1.
8A.1. Application and definitions
(1) This Part applies to an issuer that files a preliminary or final prospectus to distribute rights. (2) In this Part, “additional subscription privilege” means a privilege, granted to a holder of a right, to subscribe for a security not subscribed for by any holder under a basic subscription privilege; “basic subscription privilege” means a privilege to subscribe for the number or amount of securities set out in a rights certificate held by the holder of the rights certificate; “managing dealer” means a person that has entered into an agreement with an issuer under which the person has agreed to organize and participate in the solicitation of the exercise of the rights issued by the issuer;
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 40 “market price” means, for securities of a class for which there is a published market, (a) except as provided in paragraph (b), (i) if the published market provides a closing price, the simple average of the closing price of securities of that class on the published market for each of the trading days on which there was a closing price falling not more than 20 trading days immediately before the day as of which the market price is being determined, or (ii) if the published market does not provide a closing price, but provides only the highest and lowest prices of securities of the class traded, the average of the simple averages of the highest and lowest prices of securities of the class on the published market for each of the trading days on which there were highest and lowest prices falling not more than 20 trading days immediately before the day as of which the market price is being determined, or (b) if trading of securities of the class on the published market has occurred on fewer than 10 of the immediately preceding 20 trading days, the average of the following amounts established for each of the 20 trading days immediately before the day as of which the market price is being determined:
(i) the average of the closing bid and closing ask prices for each day on which there was no trading; (ii) if the published market (A) provides a closing price of securities of the class for each day that there was trading, the closing price, or (B) provides only the highest and lowest prices, the average of the highest and lowest prices of securities of that class for each day that there was trading; “published market” means, for a class of securities, a marketplace on which the securities are traded, if the prices at which they have been traded on that marketplace are regularly (a) disseminated electronically, or (b) published in a newspaper or business or financial publication of general and regular paid circulation; “soliciting dealer” means a person whose interest in a distribution of rights is limited to soliciting the exercise of the rights by holders of those rights;
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 41 “stand-by commitment” means an agreement by a person to acquire the securities of an issuer not subscribed for under the basic subscription privilege or the additional subscription privilege. (3) For the purpose of the definition of “market price”, if there is more than one published market for a security and (a) only one of the published markets is in Canada, the market price is determined solely by reference to that market, (b) more than one of the published markets is in Canada, the market price is determined solely by reference to the published market in Canada on which the greatest volume of trading in the particular class of securities occurred during the 20 trading days immediately before the date as of which the market price is being determined, and (c) none of the published markets are in Canada, the market price is determined solely by reference to the published market on which the greatest volume of trading in the particular class of securities occurred during the 20 trading days immediately before the date as of which the market price is being determined. _______________ M.O. 2015-17, s. 1. 8A.2. Filing of prospectus for a rights offering (1) An issuer must not file a prospectus for a distribution of rights unless all of the following apply:
(a) in addition to qualifying the distribution of the rights, the prospectus qualifies the distribution of the securities issuable upon the exercise of the rights; (b) if there is a managing dealer, the managing dealer complies with section 5.9 as if the dealer were an underwriter; (c) the exercise period for the rights is at least 21 days after the date on which the prospectus is sent to security holders; (d) the subscription price for a security to be issued upon the exercise of a right is, (i) if there is a published market for the security, lower than the market price of the security on the date of the final prospectus, or (ii) if there is no published market for the security, lower than the fair value of the security on the date of the final prospectus unless the issuer restricts all of its insiders from increasing their proportionate interest in the issuer through the exercise of the rights distributed under the prospectus or through a stand-by commitment.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 42 (2) If subparagraph (1)(d)(ii) applies, the issuer must deliver to the regulator or, in Québec, the securities regulatory authority independent evidence of fair value. _______________ M.O. 2015-17, s. 1. 8A.3. Additional subscription privilege An issuer must not grant an additional subscription privilege to a holder of a right unless all of the following apply:
(a) the issuer grants the additional subscription privilege to all holders of a right; (b) each holder of a right is entitled to receive, upon the exercise of the additional subscription privilege, the number or amount of securities equal to the lesser of (i) the number or amount of securities subscribed for by the holder under the additional subscription privilege, and (ii) the number calculated in accordance with the following formula:
x(y/z) where x = the aggregate number or amount of securities available through unexercised rights after giving effect to the basic subscription privilege; y = the number of rights exercised by the holder under the basic subscription privilege; z = the aggregate number of rights exercised under the basic subscription privilege by holders of the rights that have subscribed for securities under the additional subscription privilege; (c) all unexercised rights have been allocated on a pro rata basis to holders who subscribed for additional securities under the additional subscription privilege; (d) the subscription price for the additional subscription privilege is the same as the subscription price for the basic subscription privilege. _______________ M.O. 2015-17, s. 1. 8A.4. Stand-by commitments If an issuer enters into a stand-by commitment for a distribution of rights, all of the following apply:
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 43 (a) the issuer must grant an additional subscription privilege to all holders of a right; (b) the issuer must deliver to the regulator or, in Québec, the securities regulatory authority evidence that the person providing the stand-by commitment has the financial ability to carry out the stand-by commitment; (c) the subscription price under the stand-by commitment must be the same as the subscription price under the basic subscription privilege. _______________ M.O. 2015-17, s. 1. 8A.5. Appointment of depository If an issuer has stated in a prospectus that no security will be issued upon the exercise of a right unless a stand-by commitment is provided, or unless proceeds of no less than the stated minimum amount are received by the issuer, all of the following apply:
(a) the issuer must appoint a depository to hold all money received upon the exercise of the rights until either the stand-by commitment is provided or the stated minimum amount is received and the depository is one of the following:
(i) a Canadian financial institution;
(ii) a registrant in the jurisdiction in which the funds are proposed to be held that is acting as managing dealer for the distribution of the rights, or, if there is no managing dealer for the distribution of the rights, that is acting as a soliciting dealer; (b) the issuer and the depository must enter into an agreement, the terms of which require the depository to return the money referred to in paragraph (a) in full to the holders of rights that have subscribed for securities under the distribution of the rights if the stand-by commitment is not provided or if the stated minimum amount is not received by the depository during the exercise period for the rights. _______________ M.O. 2015-17, s. 1. 8A.6. Amendment If an issuer has filed a final prospectus for a distribution of rights, the issuer must not change the terms of the distribution. _______________ M.O. 2015-17, s. 1.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 44
PART 9 REQUIREMENTS FOR FILING A LONG FORM PROSPECTUS
9.1. Required documents for filing a preliminary or pro forma long form
prospectus
(1) An issuer that files a preliminary or pro forma long form prospectus must (a) file the following with the preliminary or pro forma long form prospectus (i) in the case of a preliminary long form prospectus, a signed copy of the preliminary long form prospectus; (ii) a copy of the following documents, and any amendments to the following documents, that have not previously been filed:
(A) articles of incorporation, amalgamation, continuation or any other constating or establishing documents of the issuer, unless the constating or establishing document is a statutory or regulatory instrument, (B) by-laws or other corresponding instruments currently in effect, (C) any securityholder or voting trust agreement that the issuer has access to and that can reasonably be regarded as material to an investor in securities of the issuer, (D) any securityholders’ rights plans or other similar plans, and (E) any other contract of the issuer or a subsidiary of the issuer that creates or can reasonably be regarded as materially affecting the rights or obligations of the issuer’s securityholders generally; (iii) a copy of any material contract required to be filed under section 9.3; (iv) if the issuer is an investment fund, the documents filed under subparagraphs (ii) and (iii) must include a copy of (A) any declaration of trust or trust agreement of the investment fund, limited partnership agreement, or any other constating or establishing documents of the investment fund, (B) any agreement of the investment fund or the trustee with the manager of the investment fund, (C) any agreement of the investment fund, the manager or trustee with the portfolio advisers of the investment fund,
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 45 (D) any agreement of the investment fund, the manager or trustee with the custodian of the investment fund, and (E) any agreement of the investment fund, the manager or trustee with the principal distributor of the investment fund; (iv.1) if the issuer is a scholarship plan, in addition to the documents filed under subparagraph (iv), a copy of the scholarship plan contract for the scholarship plan under the prospectus; (iv.2) if the issuer is an ETF, in addition to the documents filed under subparagraph (iv), an ETF facts document for each class or series of securities of the ETF; (v) if the issuer has a mineral project, the technical reports required to be filed with a preliminary long form prospectus under Regulation 43-101 respecting Standards of Disclosure for Mineral Projects (chapter V-1.1, r. 15); and (vi) a copy of each report or valuation referred to in the preliminary long form prospectus for which a consent is required to be filed under section 10.1 and that has not previously been filed, other than a technical report that (A) deals with a mineral project or oil and gas activities, and (B) is not otherwise required to be filed under subparagraph (v); (vii) a copy of any template version of the marketing materials required to be filed under paragraph 13.7(1)(e); and (b) deliver to the regulator or, in Québec, the securities regulatory authority, concurrently with the filing of the preliminary or pro forma long form prospectus, the following:
(i) in the case of a pro forma prospectus, a copy of the pro forma prospectus blacklined to show changes and the text of deletions from the latest prospectus filed; (i.1) in the case of a pro forma prospectus for an ETF, a copy of the pro forma ETF facts document for each class or series of securities of the ETF blacklined to show changes and the text of deletions from the latest ETF facts document previously filed; (ii) a completed personal information form for (A) each director and executive officer of an issuer,
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 46 (B) if the issuer is an investment fund, each director and executive officer of the manager of the issuer, (C) each promoter of the issuer, and (D) if the promoter is not an individual, each director and executive officer of the promoter; (iii) if a financial statement of an issuer or a business included in, or incorporated by reference into, a preliminary or pro forma long form prospectus is accompanied by an unsigned auditor’s report, a signed letter addressed to the regulator or, in Québec, the securities regulatory authority from the auditor of the issuer or of the business, as applicable, prepared in accordance with the form suggested for this circumstance in the Handbook; (iv) a copy of any template version of the marketing materials required to be delivered under paragraph 13.7(4)(c) or 13.12(2)(c). (2) Despite subparagraph (1)(b)(ii), an issuer is not required to deliver to the regulator or, in Québec, the securities regulatory authority a personal information form for an individual if the issuer, another issuer or, if the issuer is an investment fund, the manager of the investment fund issuer or another investment fund issuer, previously delivered a personal information form for the individual and all of the following are satisfied:
(a) the certificate and consent included in or attached to the personal information form was executed by the individual within 3 years preceding the date of filing of the preliminary or pro-forma long form prospectus; (b) the responses given by the individual to questions 6 through 10 of the individual’s personal information form are correct as at a date that is within 30 days of the filing of the preliminary or pro-forma long form prospectus; (c) if the personal information form was previously delivered to the regulator or, in Québec, the securities regulatory authority by another issuer, the issuer delivers to the regulator or, in Québec, the securities regulatory authority, concurrently with the filing of the preliminary or pro forma long form prospectus, a copy of the previously delivered personal information form or alternative information that is satisfactory to the regulator or, in Québec, the securities regulatory authority. (3) Until May 14, 2016, subparagraph (1)(b)(ii) does not apply to an issuer in respect of the delivery of a personal information form for an individual if the issuer or, if the issuer is an investment fund, the manager of the investment fund issuer, previously delivered to the regulator or, in Québec, the securities regulatory authority a predecessor personal information form for the individual and all of the following are satisfied:
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 47 (a) the certificate and consent included in or attached to the predecessor personal information form was executed by the individual within 3 years preceding the date of filing of the preliminary or pro-forma long form prospectus; (b) the responses given by the individual to questions 4(B) and (C) and questions 6 through 9 or, in the case of a TSX/TSXV personal information form in effect after September 8, 2011, questions 6 through 10, of the individual’s predecessor personal information form are correct as at a date that is within 30 days of the filing of the preliminary or pro-forma long form prospectus. _______________ M.O. 2008-05, s. 9.1; M.O. 2013-03, s. 4; M.O. 2013-08, s. 9; M.O. 2013-13, s. 2; M.O. 2017-04, s. 8.
9.2. Required documents for filing a final long form prospectus
An issuer that files a final long form prospectus must (a) file the following with the final long form prospectus:
(i) a signed copy of the final long form prospectus; (ii) a copy of any document described under subparagraph 9.1(1)(a)(ii) that has not previously been filed; (iii) a copy of each material contract required to be filed under section 9.3 that has not previously been filed under subparagraph 9.1(1)(a)(iii); (iv) a copy of any document described under subparagraph 9.1(1)(a)(iv), (iv.1) or (iv.2) that has not previously been filed; (v) a copy of any report or valuation referred to in the final long form prospectus, for which a consent is required to be filed under section 10.1 and that has not previously been filed, other than a technical report that (A) deals with a mineral project or oil and gas activities of the issuer, and (B) is not otherwise required to be filed under subparagraph 9.1(1)(a)(v) or (vi); (vi) a submission to jurisdiction and appointment of agent for service of process of the issuer in the form set out in Appendix B, if an issuer is incorporated or organized in a foreign jurisdiction and does not have an office in Canada; (vii) a submission to jurisdiction and appointment of agent for service of process of
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 48 (A) each selling securityholder, and (A.1) each director of the issuer, and (B) any other person that provides or signs a certificate under Part 5 or other securities legislation, other than an issuer, in the form set out in Appendix C, if the person is incorporated or organized in a foreign jurisdiction and does not have an office in Canada or is an individual who resides outside of Canada; (viii) the consents required to be filed under section 10.1; (ix) the written consent of the credit supporter to the inclusion of its financial statements in the final long form prospectus, if financial statements of a credit supporter are required under Item 33 of Form 41-101F1 to be included in a final long form prospectus and a certificate of the credit supporter is not required under section 5.12 to be included in the final long form prospectus; (x) an undertaking of the issuer to file the periodic and timely disclosure of a credit supporter similar to the disclosure provided under section 12.1 of Form 44- 101F1 of Regulation 44-101 respecting Short Form Prospectus Distributions (chapter V1.1, r. 16), so long as the securities being distributed are issued and outstanding; (xi) An undertaking of the issuer to provide to its securityholders separate financial statements for an operating entity that investors need to make an informed decision about investing in the issuer’s securities if (A) the issuer is an income trust that is formed as a mutual fund trust as that term is used in the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)), other than an "investment fund" as defined in section 1.1 of Regulation 81-106 respecting Investment Fund Continuous Disclosure (chapter V-1.1, r. 42), (B) the underlying business or income producing assets of the operating entity generate net cash flow available for distribution to the issuer’s securityholders, and (C) the issuer’s performance and prospects depend primarily on the performance and operations of the operating entity; (xii) if an agreement, contract or declaration of trust under subparagraph (ii) or (iv) or a material contract under subparagraph (iii) has not been executed before the filing of the final long form prospectus but will be executed on or before the completion of the distribution, the issuer must file with the securities regulatory authority, no later than the time of filing of the final long form prospectus, an undertaking of the issuer to the
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 49 securities regulatory authority to file the agreement, contract, declaration of trust or material contract promptly and in any event no later than 7 days after execution of the agreement, contract, declaration of trust or material contract; (xii.1) if a document referred to in subparagraph (ii) does not need to be executed in order to become effective and has not become effective before the filing of the final long form prospectus, but will become effective on or before the completion of the distribution, the issuer must file with the securities regulatory authority, no later than the time of filing of the final long form prospectus, an undertaking of the issuer to the securities regulatory authority to file the document promptly and in any event no later than 7 days after the document becomes effective; and (xiii) for distributions of non-voting securities, an undertaking of the issuer to give notice to holders of non-voting securities of a meeting of securityholders if a notice of such a meeting is given to its registered holders of voting securities; (xiv) a copy of any template version of the marketing materials required to be filed under paragraph 13.7(1)(e), 13.7(7)(a), 13.8(1)(e) or 13.8(7)(b) that has not previously been filed; and (b) deliver to the regulator or, in Québec, the securities regulatory authority, no later than the filing of the final long form prospectus (i) a copy of the final long form prospectus blacklined to show changes from the preliminary or pro forma long form prospectus; (i.1) in the case of a final long form prospectus for an ETF, a copy of the ETF facts document for each class or series of securities of the ETF blacklined to show changes and the text of deletions from the preliminary or pro forma ETF facts document; and (ii) if the issuer has made an application to list the securities being distributed on an exchange in Canada, a copy of a communication in writing from the exchange stating that the application for listing has been made and has been accepted subject to the issuer meeting the requirements for listing of the exchange; (iii) a copy of any template version of the marketing materials required to be delivered under paragraph 13.7(4)(c), 13.8(4)(c) or 13.12(2)(c) that has not previously been delivered; (iv) the evidence of financial ability required to be delivered under section 8A.4 if it has not previously been delivered; and
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 50 (v) the evidence of fair value required to be delivered under subsection 8A.2(2) if it has not previously been delivered. _______________ M.O. 2008-05, s. 9.2; M.O. 2013-03, s. 5; M.O. 2013-08, s. 10; M.O. 2013-13, s. 3; M.O. 2015-17, s. 2; M.O. 2017-04, s. 9.
9.3. Material contracts
(1) Unless previously filed, an issuer that files a long form prospectus must file a material contract entered into (a) since the beginning of the last financial year ending before the date of the prospectus, or (b) before the beginning of the last financial year ending before the date of the prospectus if that material contract is still in effect. (2) Despite subsection (1), an issuer is not required to file a material contract entered into in the ordinary course of business unless the material contract is (a) a contract to which directors, officers, promoters, selling securityholders or underwriters are parties, other than a contract of employment, (b) a continuing contract to sell the majority of the issuer’s products or services or to purchase the majority of the issuer’s requirements of goods, services, or raw materials, (c) a franchise or licence or other agreement to use a patent, formula, trade secret, process or trade name, (d) a financing or credit agreement with terms that have a direct correlation with anticipated cash distributions, (e) an external management or external administration agreement, or (f) a contract on which the issuer’s business is substantially dependent. (3) A provision in a material contract filed pursuant to subsections (1) or (2) may be omitted or marked to be unreadable if an executive officer of the issuer reasonably believes that disclosure of that provision would be seriously prejudicial to the interests of the issuer or would violate confidentiality provisions. (4) Subsection (3) does not apply if the provision relates to (a) debt covenants and ratios in financing or credit agreements,
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 51 (b) events of default or other terms relating to the termination of the material contract, or (c) other terms necessary for understanding the impact of the material contract on the business of the issuer. (5) If a provision is omitted or marked to be unreadable under subsection (3), the issuer must include a description of the type of information that has been omitted or marked to be unreadable immediately after the provision in the copy of the material contract filed by the issuer. (6) Despite subsections (1) and (2), an issuer is not required to file a material contract entered into before January 1, 2002 if the issuer is a reporting issuer in at least one jurisdiction immediately before filing the prospectus. _______________ M.O. 2008-05, s. 9.3.
PART 10 CONSENTS AND LICENCES, REGISTRATIONS AND APPROVALS
10.1. Consents of experts
(1) An issuer must file the written consent of (a) any solicitor, auditor, accountant, engineer, or appraiser, (b) any notary in Québec, and (c) any person whose profession or business gives authority to a statement made by that person. (1.1) Subsection (1) does not apply unless the person is named in a prospectus or an amendment to a prospectus directly or, if applicable, in a document incorporated by reference into the prospectus or amendment, (a) as having prepared or certified any part of the prospectus or the amendment, (b) as having opined on financial statements from which selected information included in the prospectus has been derived and which audit opinion is referred to in the prospectus directly or in a document incorporated by reference, or (c) as having prepared or certified a report, valuation, statement or opinion referred to in the prospectus or the amendment directly or in a document incorporated by reference. (2) A consent referred to in subsection (1) must
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 52 (a) be filed no later than the time the final prospectus or the amendment to the final prospectus is filed or, for the purposes of future financial statements that have been incorporated by reference in a prospectus under subsection 15.2(3), no later than the date that those financial statements are filed, (b) state that the person being named consents (i) to being named, and (ii) to the use of that person’s report, valuation, statement or opinion, (c) refer to the report, valuation, statement or opinion stating the date of the report, valuation, statement or opinion, and (d) contain a statement that the person referred to in subsection (1) (i) has read the prospectus, and (ii) has no reason to believe that there are any misrepresentations in the information contained in it that are (A) derived from the report, valuation, statement or opinion, or (B) within the knowledge of the person as a result of the services performed by the person in connection with the report, financial statements, valuation, statement or opinion. (3) In addition to any other requirement of this section, the consent of an auditor or accountant must also state (a) the dates of the financial statements on which the report of the person is made, and (b) that the person has no reason to believe that there are any misrepresentations in the information contained in the prospectus that are (i) derived from the financial statements on which the person has reported, or (ii) within the knowledge of the person as a result of the audit of the financial statements.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 53 (4) Subsection (1) does not apply to a designated rating organization or its DRO affiliate that issues a rating to the securities being distributed under the prospectus. _______________ M.O. 2008-05, s. 10.1; M.O. 2013-03, s. 6; M.O. 2013-08, s. 11.
10.2. Licences, registrations and approvals
If the proceeds of the distribution will be used to substantially fund a material undertaking that would constitute a material departure from the business or operations of the issuer and the issuer has not obtained all material licences, registrations and approvals necessary for the stated principal use of proceeds, (a) the issuer must appoint a registered dealer authorized to make the distribution, a Canadian financial institution, or a lawyer who is a practicing member in good standing with a law society of a jurisdiction in which the securities are being distributed, or a notary in Québec, to hold in trust all funds received from subscriptions until all material licences, registrations and approvals necessary for the stated principal use of proceeds have been obtained, and (b) if all material licences, registrations and approvals necessary for the operation of the stated principal use of proceeds have not been obtained within 90 days from the date of receipt of the final prospectus, the trustee must return the funds to subscribers. _______________ M.O. 2008-05, s. 10.2.
PART 11 OVER-ALLOCATION AND UNDERWRITERS
11.1. Over-allocation
Securities that are sold to create the over-allocation position in connection with a distribution under a prospectus must be distributed under the prospectus. _______________ M.O. 2008-05, s. 11.1.
11.2. Distribution of securities under a prospectus to an underwriter
Except as required under section 11.3, no person may distribute securities under a prospectus to any person acting as an underwriter in connection with the distribution of securities under the prospectus, other than (a) an over-allotment option granted to one or more persons for acting as an underwriter in connection with the distribution or any security issuable or transferable on the exercise of such an over-allotment option; or
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 54 (b) securities issued or paid as compensation to one or more persons for acting as an underwriter in respect of other securities that are distributed under the prospectus, where the number or principal amount of the securities issued as compensation, on an as-if-converted basis, does not in the aggregate exceed 10% of the total of the base offering on an as-if converted basis plus any securities that would be acquired upon the exercise of an over-allotment option. _______________ M.O. 2008-05, s. 11.2; M.O. 2013-03, s. 7.
11.3. Take-up by underwriter
If an underwriter has agreed to purchase a specified number or principal amount of the securities at a specified price, the underwriter must take up the securities, if at all, within 42 days after the date of the receipt for the final prospectus. _______________ M.O. 2008-05, s. 11.3.
PART 12 RESTRICTED SECURITIES
12.1. Application
This Part does not apply to
(a) securities of mutual funds,
(b) securities that carry a right to vote subject to a restriction on the number or percentage of securities that may be voted or owned by persons that are not citizens or residents of Canada or that are otherwise considered as a result of any law applicable to the issuer to be non-Canadians, but only to the extent of the restriction, and (c) securities that are subject to a restriction, imposed by any law governing the issuer, on the level of ownership of the securities by a person or combination of persons, but only to the extent of the restriction. _______________ M.O. 2008-05, s. 12.1.
12.2. Use of restricted security term
(1) An issuer must not refer to a security in a prospectus by a term or a defined term that includes the word "common" unless the security is an equity security to which are attached voting rights exercisable in all circumstances, irrespective of the number or percentage of securities owned, that are not less, per security, than the voting rights attached to any other outstanding security of the issuer. (2) An issuer must not refer in a prospectus to a term or defined term that includes the word “preference” or “preferred”, unless the security is a security, other than an equity
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 55 security, to which is attached a preference or right over any class of equity security of the issuer. (3) If restricted securities are referred to in the constating documents of the issuer by a term that is different from the appropriate restricted security term, the restricted securities may be described, in one place only in the prospectus, by the term used in the constating documents of the issuer; provided that, the description is not on the front page of the prospectus and is in the same type face and type size as that used generally in the body of the prospectus. (4) A class of securities that is or may become restricted securities must be referred to in a prospectus using a term or a defined term that includes the appropriate restricted security term. _______________ M.O. 2008-05, s. 12.2.
12.3. Prospectus filing eligibility
(1) An issuer must not file a prospectus under which restricted securities, subject securities or securities that are, directly or indirectly, convertible into, or exercisable or exchangeable for, restricted securities or subject securities, are distributed unless (a) the distribution has received prior majority approval of the securityholders of the issuer in accordance with applicable law, including approval on a class basis if required and excluding any votes attaching at the time to securities held, directly or indirectly, by affiliates of the issuer or control persons of the issuer, or (b) at the time of any restricted security reorganization related to the securities to be distributed (i) the restricted security reorganization received prior majority approval of the securityholders of the issuer in accordance with applicable law, including approval on a class basis if required and excluding any votes attaching at the time to securities held, directly or indirectly, by affiliates of the issuer or control persons of the issuer, (ii) the issuer was a reporting issuer in at least one jurisdiction, and (iii) no purposes or business reasons for the creation of restricted securities were disclosed that are inconsistent with the purpose of the distribution. (2) For each approval referred to in subsection (1), the issuer must have provided prior written disclosure in an information circular or notice to its securityholders that included (a) the name of each affiliate of the issuer that was a beneficial owner of securities of the issuer and the number of securities beneficially owned, directly or
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 56 indirectly, by the affiliate as of the date of the information circular or notice to the extent known to the issuer after reasonable inquiry, (b) the name of each control person and the number of securities beneficially owned, directly or indirectly, by the control person as of the date of the information circular or notice, to the extent known to the issuer after reasonable inquiry, (c) a statement of the number of votes attaching to the securities that were excluded for the purpose of the approval to the extent known to the issuer after reasonable inquiry, and (d) the purpose and business reasons for the creation of restricted securities. (3) Subsections (1) and (2) do not apply if (a) the securities offered by the prospectus are of an existing class of restricted securities that were created before December 21, 1984, (b) the issuer was a private issuer immediately before filing the prospectus, (c) the securities offered by the prospectus are of the same class as securities distributed under a previous prospectus that was filed by an issuer that was, at the time of filing the previous prospectus, a private issuer, (d) the securities offered by the prospectus are previously unissued restricted securities distributed by way of stock dividend in the ordinary course to securityholders instead of a cash dividend if at the time of distribution there is a published market for the restricted securities, (e) the securities offered by the prospectus are distributed as a stock split that takes the form of a distribution of previously unissued restricted securities by way of stock dividend to holders of the same class of restricted securities if at the time of distribution there is a published market for the restricted securities and the distribution is part of a concurrent distribution by way of stock dividend to holders of all equity securities under which all outstanding equity securities of the issuer are increased in the same proportion, or (f) as of a date not more than 7 days before the date of the prospectus, the issuer expects that in each local jurisdiction in which the prospectus will be filed the number of securities of each class of equity securities held by registered holders whose last address as shown on the books of the issuer is in the local jurisdiction, or beneficially owned by persons in the local jurisdiction, will be less than 2% of the outstanding number of securities of the class after giving effect to the proposed distribution. _______________ M.O. 2008-05, s. 12.3.
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PART 13 ADVERTISING AND MARKETING IN CONNECTION WITH
PROSPECTUS OFFERINGS OF ISSUERS OTHER THAN INVESTMENT FUNDS _______________ M.O. 2008-05, Part 13; M.O. 2013-13, s. 4.
13.0. Application
(1) This Part applies to issuers other than investment funds filing a prospectus in the form of Form 41-101F2 or Form 41-101F3. (2) In this Part, “comparables” means information that compares an issuer to other issuers; “convertible security” has the same meaning as in section 1.1 of Regulation 45-102 respecting Resale of Securities (chapter V-1.1, r. 20); “exchangeable security” has the same meaning as in section 1.1 of Regulation 45- 102 respecting Resale of Securities; “underlying security” has the same meaning as in section 1.1 of Regulation 45-102 respecting Resale of Securities; “U.S. cross-border initial public offering” means an initial public offering of securities of an issuer being made contemporaneously in the United States of America and Canada by way of a prospectus filed with a securities regulatory authority in a jurisdiction of Canada and a U.S. prospectus filed with the SEC; “U.S. cross-border offering” means an offering of securities of an issuer being made contemporaneously in the United States of America and Canada by way of a prospectus filed with a securities regulatory authority in a jurisdiction of Canada and a U.S. prospectus filed with the SEC, and includes a U.S. cross-border initial public offering; “U.S. prospectus” means a prospectus that has been prepared in accordance with the disclosure and other requirements of U.S. federal securities law for an offering of securities registered under the 1933 Act. (3) In this Part, for greater certainty, a reference to “provides” includes showing a document to a person without allowing the person to retain, or make a copy of, the document. _______________ M.O. 2013-13, s. 4.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 58
13.1. Legend for communications during the waiting period
(1) A preliminary prospectus notice or other communication used in connection with a prospectus offering during the waiting period must contain the following legend or words to the same effect:
“A preliminary prospectus containing important information relating to these securities has been filed with securities commissions or similar authorities in certain jurisdictions of Canada. The preliminary prospectus is still subject to completion or amendment. Copies of the preliminary prospectus may be obtained from [insert name and contact information for dealer or other relevant person or entity.] There will not be any sale or any acceptance of an offer to buy the securities until a receipt for the final prospectus has been issued.”. (2) If the preliminary prospectus notice or other communication is in writing, include the wording required under subsection (1) in bold type that is at least as large as that used generally in the body of the text. (3) Subsection (1) does not apply to standard term sheets and marketing materials. _______________ M.O. 2008-05, s. 13.1; M.O. 2013-13, s. 4.
13.2. Legend for communications following receipt for the final prospectus
(1) A final prospectus notice or other communication used in connection with a prospectus offering following the issuance of a receipt for the final prospectus must contain the following legend or words to the same effect:
“This offering is only made by prospectus. The prospectus contains important detailed information about the securities being offered. Copies of the prospectus may be obtained from [insert name and contact information for dealer or other relevant person or entity.] Investors should read the prospectus before making an investment decision.” (2) If the final prospectus notice or other communication is in writing, include the wording required under subsection (1) in bold type that is at least as large as that used generally in the body of the text. (3) Subsection (1) does not apply to standard term sheets and marketing materials. _______________ M.O. 2008-05, s. 13.2; M.O. 2013-13, s. 5.
13.3. (Revoked).
M.O. 2008-05, s. 13.3; M.O. 2013-03, s. 8; M.O. 2013-13, s. 6.
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13.4. Testing of the waters exemption – IPO issuers
(1) In this section, “public issuer” means an issuer that (a) is a reporting issuer in a jurisdiction of Canada; (b) is an SEC issuer; (c) has a class of securities that has been assigned a ticker symbol by the Financial Industry Regulatory Authority in the United States of America for use on any of the over-the-counter markets in the United States of America; (d) has a class of securities that have been traded on an over-the-counter market with respect to which trade data is publicly reported; or (e) has any of its securities listed, quoted or traded on a marketplace outside of Canada or any other facility outside of Canada for bringing together buyers and sellers of securities and with respect to which trade data is publicly reported. (2) Subject to subsections (3) to (7), the prospectus requirement does not apply to a solicitation of an expression of interest in order to ascertain if there would be sufficient interest in an initial public offering of securities by an issuer pursuant to a long form prospectus, if (a) the issuer has a reasonable expectation of filing a preliminary long form prospectus in respect of an initial public offering in at least one jurisdiction of Canada; (b) the issuer is not a public issuer before the date of the preliminary long form prospectus; (c) an investment dealer makes the solicitation on behalf of the issuer; (d) the issuer provided written authorization to the investment dealer to act on its behalf before the investment dealer made the solicitation; (e) the solicitation is made to an accredited investor; and (f) subject to subsection (3), the issuer and the investment dealer keep all information about the proposed offering confidential until the earlier of (i) the information being generally disclosed in a preliminary long form prospectus or otherwise, or (ii) the issuer confirming in writing that it will not be pursuing the potential offering.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 60 (3) An investment dealer must not solicit an expression of interest from an accredited investor pursuant to subsection (2) unless (a) all written material provided to the accredited investor (i) is approved in writing by the issuer before it is provided, (ii) is marked confidential, and (iii) contains a legend stating that the material does not provide full disclosure of all material facts relating to the issuer, the securities or the offering and is not subject to liability for misrepresentations under applicable securities legislation; and (b) before providing the investor with any information about the issuer, the securities or the offering, the investment dealer obtains confirmation in writing from the investor that the investor will keep information about the proposed offering confidential, and will not use the information for any purpose other than assessing the investor’s interest in the offering, until the earlier of (i) the information being generally disclosed in a preliminary long form prospectus or otherwise, or (ii) the issuer confirming in writing that it will not be pursuing the potential offering. (4) If any investment dealer solicits an expression of interest pursuant to subsection (2), the issuer must not file a preliminary long form prospectus in respect of an initial public offering until the date which is at least 15 days after the date on which any investment dealer last solicited an expression of interest from an accredited investor pursuant to that subsection. (5) An issuer relying on the exemption in subsection (2) must keep (a) a written record of any investment dealer that it authorized to act on its behalf in making solicitations in reliance on the exemption; and (b) a copy of any written authorizations referred to in paragraph (2)(d). (6) If an investment dealer solicits an expression of interest pursuant to subsection (2), the investment dealer must keep (a) a written record of any accredited investor that it solicited in reliance on the exemption; (b) a copy of any written material and written approval referred to in subparagraph (3)(a)(i); and
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 61 (c) any written confirmations referred to in paragraph (3)(b). (7) Subsection (2) does not apply if (a) any of the issuer’s securities are held by a control person that is a public issuer; and (b) the initial public offering of the issuer would be a material fact or material change with respect to the control person. _______________ M.O. 2013-13, s. 7.
13.5. Standard term sheets during the waiting period
(1) An investment dealer that provides a standard term sheet to a potential investor during the waiting period is exempt from the prospectus requirement with respect to providing the standard term sheet if (a) the standard term sheet complies with subsections (2) and (3); (b) other than contact information for the investment dealer or underwriters, all information in the standard term sheet concerning the issuer, the securities or the offering is disclosed in, or derived from, the preliminary prospectus or any amendment; and (c) a receipt for the preliminary prospectus has been issued in the local jurisdiction. (2) A standard term sheet provided under subsection (1) must be dated and include the following legend, or words to the same effect, on the first page:
“A preliminary prospectus containing important information relating to the securities described in this document has been filed with the securities regulatory authorit[y/ies] in [each of/certain of the provinces/provinces and territories of Canada]. The preliminary prospectus is still subject to completion. Copies of the preliminary prospectus may be obtained from [insert contact information for the investment dealer or underwriters]. There will not be any sale or any acceptance of an offer to buy the securities until a receipt for the final prospectus has been issued. This document does not provide full disclosure of all material facts relating to the securities offered. Investors should read the preliminary prospectus, the final prospectus and any amendment for disclosure of those facts, especially risk factors relating to the securities offered, before making an investment decision.”.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 62 (3) A standard term sheet provided under subsection (1) may contain only the information referred to in subsection (2) and the following information in respect of the issuer, the securities or the offering:
(a) the name of the issuer;
(b) the jurisdiction or foreign jurisdiction in which the issuer’s head office is located; (c) the statute under which the issuer is incorporated, continued or organized or, if the issuer is an unincorporated entity, the laws of the jurisdiction or foreign jurisdiction under which it is established and exists; (d) a brief description of the business of the issuer; (e) a brief description of the securities; (f) the price or price range of the securities; (g) the total number or dollar amount of the securities, or range of the total number or dollar amount of the securities; (h) the terms of any over-allotment option; (i) the names of the underwriters; (j) whether the offering is on a firm commitment or best efforts basis; (k) the amount of the underwriting commission, fee or discount; (l) the proposed or expected closing date of the offering; (m) a brief description of the use of proceeds; (n) the exchange on which the securities are proposed to be listed, provided that the standard term sheet complies with the requirements of securities legislation for listing representations; (o) in the case of debt securities, the maturity date of the debt securities and a brief description of any interest payable on the debt securities; (p) in the case of preferred shares, a brief description of any dividends payable on the securities; (q) in the case of convertible securities, a brief description of the underlying securities into which the convertible securities are convertible;
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 63 (r) in the case of exchangeable securities, a brief description of the underlying securities into which the exchangeable securities are exchangeable; (s) in the case of restricted securities, a brief description of the restriction; (t) in the case of securities for which a credit supporter has provided a guarantee or alternative credit support, a brief description of the credit supporter and the guarantee or alternative credit support provided; (u) whether the securities are redeemable or retractable; (v) a statement that the securities are eligible, or are expected to be eligible, for investment in registered retirement savings plans, tax-free savings accounts or other registered plans, if the issuer has received, or reasonably expects to receive, a legal opinion that the securities are so eligible; (w) contact information for the investment dealer or underwriters. (4) For the purposes of subsection (3), “brief description” means a description consisting of no more than three lines of text in type that is at least as large as that used generally in the body of the standard term sheet. _______________ M.O. 2013-13, s. 7.
13.6. Standard term sheets after a receipt for a final prospectus
(1) An investment dealer must not provide a standard term sheet to a potential investor after a receipt for a final prospectus or any amendment is issued unless (a) the standard term sheet complies with subsections (2) and (3); (b) other than contact information for the investment dealer or underwriters, all information in the standard term sheet concerning the issuer, the securities or the offering is disclosed in, or derived from, the final prospectus or any amendment; and (c) a receipt for the final prospectus has been issued in the local jurisdiction. (2) A standard term sheet provided under subsection (1) must be dated and include the following legend, or words to the same effect, on the first page:
“A final prospectus containing important information relating to the securities described in this document has been filed with the securities regulatory authorit[y/ies] in [each of/certain of the provinces/provinces and territories of Canada].
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 64 Copies of the final prospectus may be obtained from [insert contact information for the investment dealer or underwriters]. This document does not provide full disclosure of all material facts relating to the securities offered. Investors should read the final prospectus, and any amendment, for disclosure of those facts, especially risk factors relating to the securities offered, before making an investment decision.”. (3) A standard term sheet provided under subsection (1) may contain only the information referred to in subsection (2) and the information referred to in subsection 13.5(3). _______________ M.O. 2013-13, s. 7.
13.7. Marketing materials during the waiting period
(1) An investment dealer that provides marketing materials to a potential investor during the waiting period is exempt from the prospectus requirement with respect to providing the marketing materials if (a) the marketing materials comply with subsections (2) to (8); (b) other than contact information for the investment dealer or underwriters and any comparables, all information in the marketing materials concerning the issuer, the securities or the offering is disclosed in, or derived from, the preliminary prospectus or any amendment; (c) other than prescribed language, the marketing materials contain the same cautionary language in bold type as contained on the cover page, and in the summary, of the preliminary prospectus; (d) a template version of the marketing materials is approved in writing by the issuer and the lead underwriter before the marketing materials are provided; (e) a template version of the marketing materials is filed on or before the day that the marketing materials are first provided; (f) a receipt for the preliminary prospectus has been issued in the local jurisdiction; and (g) the investment dealer provides a copy of the preliminary prospectus and any amendment with the marketing materials. (2) If a template version of the marketing materials is approved in writing by the issuer and lead underwriter under paragraph (1)(d) and filed under paragraph (1)(e), an
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 65 investment dealer may provide a limited-use version of the marketing materials that (a) has a date that is different than the template version, (b) contains a cover page referring to the investment dealer or underwriters or a particular investor or group of investors, (c) contains contact information for the investment dealer or underwriters, or (d) has text in a format, including the type’s font, colour or size, that is different than the template version. (3) If a template version of the marketing materials is divided into separate sections for separate subjects and is approved in writing by the issuer and lead underwriter under paragraph (1)(d), and that template version is filed under paragraph (1)(e), an investment dealer may provide a limited-use version of the marketing materials that includes only one or more of those separate sections. (4) The issuer may remove any comparables, and any disclosure relating to those comparables, from the template version of the marketing materials before filing it under paragraph (1)(e) or (7)(a) if (a) the comparables, and any disclosure relating to the comparables, are in a separate section of the template version of the marketing materials; (b) the template version of the marketing materials that is filed contains a note advising that the comparables, and any disclosure relating to the comparables, were removed in accordance with this subsection, provided that the note appears immediately after where the removed comparables and related disclosure would have been; (c) if the prospectus is filed in the local jurisdiction, a complete template version of the marketing materials containing the comparables, and any disclosure relating to the comparables, is delivered to the securities regulatory authority; and (d) the complete template version of the marketing materials contains disclosure proximate to the comparables which (i) explains what comparables are; (ii) explains the basis on which the other issuers were included in the comparables and why the other issuers are considered to be an appropriate basis for a comparison with the issuer; (iii) explains the basis on which the compared attributes were included;
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 66 (iv) states that the information about the other issuers was obtained from public sources and has not been verified by the issuer or the underwriters; (v) discloses any risks relating to the comparables, including risks in making an investment decision based on the comparables; and (vi) states that if the comparables contain a misrepresentation, the investor does not have a remedy under securities legislation. (5) Marketing materials provided under subsection (1) must be dated and include the following legend, or words to the same effect, on the first page:
“A preliminary prospectus containing important information relating to the securities described in this document has been filed with the securities regulatory authorit[y/ies] in [each of/certain of the provinces/provinces and territories of Canada]. A copy of the preliminary prospectus, and any amendment, is required to be delivered with this document. The preliminary prospectus is still subject to completion. There will not be any sale or any acceptance of an offer to buy the securities until a receipt for the final prospectus has been issued. This document does not provide full disclosure of all material facts relating to the securities offered. Investors should read the preliminary prospectus, the final prospectus and any amendment for disclosure of those facts, especially risk factors relating to the securities offered, before making an investment decision.”. (6) If marketing materials are provided during the waiting period under subsection (1), the issuer must include the template version of the marketing materials filed under paragraph 1(e) in its final prospectus, or incorporate by reference the template version of the marketing materials filed under paragraph 1(e) into its final prospectus, in the manner described in subsection 36A.1(1) of Form 41-101F1 or subsection 11.6(1) of Form 44- 101F1, as applicable. (7) If the final prospectus or any amendment modifies a statement of a material fact that appeared in marketing materials provided during the waiting period under subsection (1), the issuer must (a) prepare and file, at the time the issuer files the final prospectus or any amendment, a revised template version of the marketing materials that is blacklined to show the modified statement, and (b) include in the final prospectus, or any amendment, the disclosure required by subsection 36A.1(3) of Form 41-101F1 or subsection 11.6(3) of Form 44-101F1, as applicable.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 67 (8) A revised template version of the marketing materials filed under subsection (7) must comply with section 13.8. (9) If marketing materials are provided during the waiting period under subsection (1) but the issuer does not comply with subsection (6), the marketing materials are deemed for purposes of securities legislation to be incorporated into the issuer’s final prospectus as of the date of the final prospectus to the extent not otherwise expressly modified or superseded by a statement contained in the final prospectus. _______________ M.O. 2013-13, s. 7.
13.8. Marketing materials after a receipt for a final prospectus
(1) An investment dealer must not provide marketing materials to a potential investor after a receipt for a final prospectus or any amendment is issued unless (a) the marketing materials comply with subsections (2) to (8); (b) other than contact information for the investment dealer or underwriters and any comparables, all information in the marketing materials concerning the issuer, the securities or the offering is disclosed in, or derived from, the final prospectus and any amendment; (c) other than prescribed language, the marketing materials contain the same cautionary language in bold type as contained on the cover page, and in the summary, of the final prospectus; (d) a template version of the marketing materials is approved in writing by the issuer and the lead underwriter before the marketing materials are provided; (e) a template version of the marketing materials is filed on or before the day that the marketing materials are first provided; (f) a receipt for the final prospectus has been issued in the local jurisdiction; and (g) the investment dealer provides a copy of the final prospectus, and any amendment, with the marketing materials. (2) If a template version of the marketing materials is approved in writing by the issuer and lead underwriter under paragraph (1)(d) and filed under paragraph (1)(e), an investment dealer may provide a limited-use version of the marketing materials that (a) has a date that is different than the template version,
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 68 (b) contains a cover page referring to the investment dealer or underwriters or a particular investor or group of investors, (c) contains contact information for the investment dealer or underwriters; or (d) has text in a format, including the type’s font, colour or size, that is different than the template version. (3) If a template version of the marketing materials is divided into separate sections for separate subjects and is approved in writing by the issuer and lead underwriter under paragraph (1)(d), and that template version is filed under paragraph (1)(e), an investment dealer may provide a limited-use version of the marketing materials that includes only one or more of those separate sections. (4) The issuer may remove any comparables, and any disclosure relating to those comparables, from the template version of the marketing materials before filing it under paragraph (1)(e) or (7)(b) if (a) the comparables, and any disclosure relating to the comparables, are in a separate section of the template version of the marketing materials; (b) the template version of the marketing materials that is filed contains a note advising that the comparables, and any disclosure relating to the comparables, were removed in accordance with this subsection, provided that the note appears immediately after where the removed comparables and related disclosure would have been; (c) if the prospectus is filed in the local jurisdiction, a complete template version of the marketing materials containing the comparables, and any disclosure relating to the comparables, is delivered to the securities regulatory authority; and (d) the complete template version of the marketing materials contains the disclosure referred to in paragraph 13.7(4)(d). (5) Marketing materials provided under subsection (1) must be dated and include the following legend, or words to the same effect, on the first page:
“A final prospectus containing important information relating to the securities described in this document has been filed with the securities regulatory authorit[y/ies] in [each of/certain of the provinces/provinces and territories of Canada]. A copy of the final prospectus, and any amendment, is required to be delivered with this document. This document does not provide full disclosure of all material facts relating to the securities offered. Investors should read the final prospectus, and any amendment, for disclosure of those facts, especially risk factors relating to the securities offered, before making an investment decision.”.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 69 (6) An investment dealer must not provide marketing materials under subsection (1) unless the issuer (a) has included the template version of the marketing materials filed under paragraph 1(e) in its final prospectus, and any amendment, or incorporated by reference the template version of the marketing materials filed under paragraph 1(e) into its final prospectus, and any amendment, in the manner described in subsection 36A.1(1) of Form 41-101F1 or subsection 11.6(1) of Form 44-101F1, as applicable, or (b) has included in its final prospectus, and any amendment, the statement described in subsection 36A.1(4) of Form 41-101F1 or subsection 11.6(4) of Form 44-101F1, as applicable. (7) If an amendment to a final prospectus modifies a statement of material fact that appeared in marketing materials provided under subsection (1), the issuer must (a) indicate in the amendment to the final prospectus that the marketing materials are not part of the final prospectus, as amended, to the extent that the contents of the marketing materials have been modified or superseded by a statement contained in the amendment; (b) prepare and file, at the time the issuer files the amendment to the final prospectus, a revised template version of the marketing materials that is blacklined to show the modified statement; and (c) include in the amendment to the final prospectus the disclosure required by subsection 36A.1(3) of Form 41-101F1 or subsection 11.6(3) of Form 44 101F1, as applicable. (8) Any revised template version of the marketing materials filed under subsection (7) must comply with this section. (9) If marketing materials are provided under subsection (1) but the issuer did not comply with subsection (6), the marketing materials are deemed for purposes of securities legislation to be incorporated into the issuer’s final prospectus as of the date of the final prospectus to the extent not otherwise expressly modified or superseded by a statement contained in the final prospectus. _______________ M.O. 2013-13, s. 7.
13.9. Road shows during the waiting period
(1) An investment dealer that conducts a road show for potential investors during the waiting period is exempt from the prospectus requirement with respect to that road show if
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 70 (a) the road show complies with subsections (2) to (4); and (b) a receipt for the preliminary prospectus has been issued in the local jurisdiction. (2) Subject to section 13.12, an investment dealer must not provide marketing materials to an investor attending a road show conducted under subsection (1) unless the marketing materials are provided in accordance with section 13.7. (3) If an investment dealer conducts a road show, the investment dealer must establish and follow reasonable procedures to (a) ask any investor attending the road show in person, by telephone conference call, on the internet or by other electronic means to provide their name and contact information; (b) keep a record of any information provided by the investor; and (c) provide the investor with a copy of the preliminary prospectus and any amendment. (4) If an investment dealer permits an investor, other than an accredited investor, to attend a road show, the investment dealer must commence the road show with the oral reading of the following statement or a statement to the same effect:
“This presentation does not provide full disclosure of all material facts relating to the securities offered. Investors should read the preliminary prospectus, the final prospectus and any amendment for disclosure of those facts, especially risk factors relating to the securities offered, before making an investment decision.”. _______________ M.O. 2013-13, s. 7.
13.10. Road shows after a receipt for a final prospectus
(1) An investment dealer must not conduct a road show for potential investors after a receipt for a final prospectus or any amendment is issued unless (a) the road show complies with subsections (2) to (4); and (b) a receipt for the final prospectus has been issued in the local jurisdiction. (2) Subject to section 13.12, an investment dealer must not provide marketing materials to an investor attending a road show conducted under subsection (1) unless the marketing materials are provided in accordance with section 13.8.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 71 (3) If an investment dealer conducts a road show, the investment dealer must establish and follow reasonable procedures to (a) ask any investor attending the road show in person, by telephone conference call, on the internet or by other electronic means to provide their name and contact information; (b) keep a record of any information provided by the investor; and (c) provide the investor with a copy of the final prospectus and any amendment. (4) If an investment dealer permits an investor, other than an accredited investor, to attend a road show, the investment dealer must commence the road show with the oral reading of the following statement or a statement to the same effect:
“This presentation does not provide full disclosure of all material facts relating to the securities offered. Investors should read the final prospectus and any amendment for disclosure of those facts, especially risk factors relating to the securities offered, before making an investment decision.”. _______________ M.O. 2013-13, s. 7.
13.11. Exception from procedures for road shows for certain U.S. cross-border
initial public offerings
(1) Subject to subsection (2), the following provisions do not apply to an investment dealer that conducts a road show in connection with a U.S. cross-border initial public offering:
(a) paragraphs 13.9(3)(a) and (b);
(b) paragraphs 13.10(3)(a) and (b).
(2) Subsection (1) does not apply unless
(a) the issuer is relying on the exemption from United States filing requirements in Rule 433(d)(8)(ii) under the 1933 Act in respect of the road show; and (b) the investment dealer establishes and follows reasonable procedures to (i) ask any investor attending the road show in person, by telephone conference call, on the internet or by other electronic means to voluntarily provide their name and contact information; and
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 72 (ii) keep a record of any information voluntarily provided by the investor. _______________ M.O. 2013-13, s. 7.
13.12. Exception from filing and incorporation requirements for road shows for
certain U.S. cross-border offerings
(1) Subject to subsections (2) to (4), if an investment dealer provides marketing materials to a potential investor in connection with a road show for a U.S. cross-border offering, the following provisions do not apply to the template version of the marketing materials relating to the road show:
(a) paragraphs 13.7(1)(e) and 13.8(1)(e);
(b) subsections 13.7(6) to (9);
(c) subsections 13.8(6) to (9);
(d) paragraphs 36A.1(1)(b) and (c), paragraph 36A.1(3)(b), subsection 36A.1(4) and section 37.6 of Form 41-101F1; (e) paragraphs 11.6(1)(b) and (c), paragraph 11.6(3)(b) and subsection 11.6(4) of Form 44-101F1. (2) Subsection (1) does not apply unless (a) the underwriters have a reasonable expectation that the securities offered under the U.S. cross-border offering will be sold primarily in the United States of America; (b) the issuer and the underwriters who sign the prospectus filed in the local jurisdiction provide a contractual right containing the language set out in subsection 36A.1(5) of Form 41-101F1, or words to the same effect, except that the language may specify that the contractual right does not apply to any comparables provided in accordance with subsection (3); and (c) if the prospectus is filed in the local jurisdiction, the template version of the marketing materials relating to the road show is delivered to the securities regulatory authority. (3) If the template version of the marketing materials relating to the road show contains comparables, the template version of the marketing materials must contain the disclosure referred to in paragraph 13.7(4)(d).
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 73 (4) For greater certainty, subsection (1) does not apply to marketing materials other than the marketing materials provided in connection with the road show. _______________ M.O. 2013-13, s. 7.
PART 13A ADVERTISING AND MARKETING IN CONNECTION WITH
PROSPECTUS OFFERINGS OF INVESTMENT FUNDS
M.O. 2013-13, s. 7.
13A.1. Application
This Part applies to investment funds filing a prospectus in the form of Form 41-101F2 or Form 41-101F3. _______________ M.O. 2013-13, s. 7. 13A.2. Legend for communications during the waiting period (1) A preliminary prospectus notice or other communication used in connection with a prospectus offering during the waiting period must contain the following legend, or words to the same effect:
“A preliminary prospectus containing important information relating to these securities has been filed with securities commissions or similar authorities in certain jurisdictions of Canada. The preliminary prospectus is still subject to completion or amendment. Copies of the preliminary prospectus may be obtained from [insert name and contact information for dealer or other relevant person]. There will not be any sale or acceptance of an offer to buy the securities until a receipt for the final prospectus has been issued.”; (2) If the preliminary prospectus notice or other communication is in writing, include the wording required under subsection (1) in bold type that is at least as large as that used generally in the body of the text. _______________ M.O. 2013-13, s. 7. 13A.3. Legend for communications following receipt for the final prospectus (1) A final prospectus notice or other communication used in connection with a prospectus offering following the issuance of a receipt for the final prospectus must contain the following legend, or words to the same effect:
“This offering is made only by prospectus. The prospectus contains important detailed information about the securities being offered. Copies of the prospectus may be
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 74 obtained from [insert name and contact information for dealer or other relevant person]. Investors should read the prospectus before making an investment decision.”. (2) If the final prospectus notice or other communication is in writing, include the wording required under subsection (1) in bold type that is at least as large as that used generally in the body of the text. _______________ M.O. 2013-13, s. 7. 13A.4. Advertising during the waiting period If the issuer is an investment fund, an advertisement used in connection with a prospectus offering during the waiting period may state only the following information:
(a) whether the security represents a share in an incorporated entity or an interest in an unincorporated entity; (b) the name of the issuer; (c) the price of the security; (d) the fundamental investment objectives of the investment fund; (e) the name of the manager of the investment fund; (f) the name of the portfolio manager of the investment fund; (g) the name and address of a person from whom a preliminary prospectus may be obtained and purchases of securities may be made; (h) how many securities will be made available; (i) whether the security is or will be a qualified investment for a registered retirement savings plan, registered retirement income fund, registered education savings plan or tax free savings account or qualifies, or will qualify, the holder for special tax treatment. _______________ M.O. 2013-13, s. 7.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 75
PART 14 CUSTODIANSHIP OF PORTFOLIO ASSETS OF AN INVESTMENT
FUND
14.1. General
(1) This Part applies to an investment fund that prepares a prospectus in accordance with this Regulation, other than an investment fund subject to Regulation 81-102 respecting Investment Funds (chapter V-1.1, r. 39). (2) All portfolio assets of an investment fund must be held under the custodianship of one custodian that satisfies the requirements of section 14.2. (3) No manager of an investment fund may act as a custodian or sub-custodian of the investment fund. _______________ M.O. 2008-05, s. 14.1; M.O. 2014-05, s. 3.
14.2. Who may act as custodian or sub-custodian
(1) I f portfolio assets are held in Canada by a custodian or sub-custodian, the custodian or sub-custodian must be one of the following:
(a) a bank listed in Schedule I, II or III of the Bank Act (S.C. 1991, c. 46); (b) a trust company that (i) is incorporated and licenced or registered under the laws of Canada or a jurisdiction, and (ii) has equity, as reported in its most recent audited financial statement, of not less than $10,000,000; (c) a company that is incorporated under the laws of Canada or a jurisdiction and is an affiliate of a bank or trust company referred to in paragraph (a) or (b), if (i) the company has equity, as reported in its most recent audited financial statements that have been made public, of not less than $10,000,000, or (ii) the bank or trust company has assumed responsibility for all of the custodial obligations of the company for that investment fund. (2) If portfolio assets are held outside of Canada by a sub-custodian, the subcustodian must be one of the following:
(a) an entity referred to in subsection (1);
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 76 (b) an entity that (i) is incorporated or organized under the law of a country, or a political subdivision of a country, other than Canada, (ii) is regulated as a banking institution or trust company by the government, or an agency of the government of the country or political subdivision of the country under whose laws it is incorporated or organized, and (iii) has equity, as reported in its most recent audited financial statements of not less than the equivalent of $100,000,000; (c) an affiliate of an entity referred to in paragraph (a) or (b) if (i) the affiliate has equity, as reported in its most recent audited financial statements that have been made public, of not less than the equivalent of $100,000,000, or (ii) the entity referred to in paragraphs (a) or (b) has assumed responsibility for all of the custodial obligations of the affiliate for that investment fund. _______________ M.O. 2008-05, s. 14.2; M.O. 2010-17, s. 4.
14.3. Standard of care
(1) The custodian and each sub-custodian of an investment fund, in carrying out their duties concerning the safekeeping of, and dealing with, the portfolio assets of the investment fund, must exercise (a) the degree of care, diligence and skill that a reasonably prudent person would exercise in the circumstances, or (b) at least the same degree of care as they exercise with respect to their own property of a similar kind, if this is a higher degree of care than the degree of care referred to in paragraph (a). (2) No investment fund may relieve the custodian or a sub-custodian of the investment fund from liability to the investment fund or to a securityholder of the investment fund for loss that arises out of the failure of the custodian or sub-custodian to exercise the standard of care imposed by subsection (1). (3) An investment fund may indemnify a custodian or sub-custodian against legal fees, judgments and amounts paid in settlement, actually and reasonably incurred by that entity in connection with custodial or sub-custodial services provided by that entity to the investment fund, if those fees, judgments and amounts were not incurred as a result of a breach of the standard of care described in subsection (1).
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 77 (4) No investment fund may incur the cost of any portion of liability insurance that insures a custodian or sub-custodian for a liability, except to the extent that the custodian or sub-custodian may be indemnified for that liability under this section. _______________ M.O. 2008-05, s. 14.3.
14.4. Appointment of sub-custodian
(1) The custodian or a sub-custodian of an investment fund may appoint one or more sub-custodians to hold portfolio assets of the investment fund if, (a) in the case where the appointment is by the custodian, the investment fund gives written consent to each appointment, (b) in the case where the appointment is by a sub-custodian, the investment fund and the custodian of the investment fund give written consent to each appointment, (c) the sub-custodian is an entity described in subsection 14.2(1) or (2), as applicable, (d) the arrangements under which a sub-custodian is appointed are such that the investment fund may enforce rights directly, or require the custodian or a subcustodian to enforce rights on behalf of the investment fund, to the portfolio assets held by the appointed sub-custodian, and (e) the appointment is otherwise in compliance with this Regulation. (2) Despite paragraphs (1)(a) and (b), a general consent to the appointment of persons that are part of an international network of sub-custodians within the organization of the custodian appointed by the investment fund or the sub-custodian appointed by the custodian is sufficient if that general consent is part of an agreement governing the relationship between the investment fund and the appointed custodian or the custodian and the appointed sub-custodian. (3) A custodian or sub-custodian must provide to the investment fund a list of each person that is appointed sub-custodian under a general consent referred to in subsection (2). _______________ M.O. 2008-05, s. 14.4.
14.5. Content of agreements
(1) All custodian agreements and sub-custodian agreements of an investment fund must provide for
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 78 (a) the location of portfolio assets, (b) the appointment of a sub-custodian, if any, (c) the provision of lists of sub-custodians, (d) the method of holding portfolio assets, (e) the standard of care and responsibility for loss, (f) review and compliance reports, and (g) the safekeeping of portfolio assets on terms consistent with the agreement between the investment fund and the custodian, for an agreement between a custodian and a sub-custodian. (2) The provisions of an agreement referred to under subsection (1) must comply with the requirements of this Part. (3) A custodian agreement or sub-custodian agreement concerning the portfolio assets of an investment fund must not (a) provide for the creation of any security interest on the portfolio assets except for a good faith claim for payment of the fees and expenses of the custodian or subcustodian for acting in that capacity or to secure the obligations of the investment fund to repay borrowings by the investment fund from a custodian or sub-custodian for the purpose of settling portfolio transactions, or (b) contain a provision that would require the payment of a fee to the custodian or sub-custodian for the transfer of the beneficial ownership of portfolio assets, other than for safekeeping and administrative services in connection with acting as custodian or subcustodian. _______________ M.O. 2008-05, s. 14.5; M.O. 2013-03, s. 9.
14.6. Review and compliance reports
(1) The custodian of an investment fund must, on a periodic basis and at least annually, (a) review the agreements referred to in section 14.5 to determine if those agreements are in compliance with this Part, (b) make reasonable enquiries to ensure that each sub-custodian is an entity referred to in subsection 14.2(1) or (2), as applicable, and
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 79 (c) make or cause to be made any changes that may be necessary to ensure that (i) the agreements are in compliance with this Part, and (ii) each sub-custodian is an entity referred to in subsection 14.2(1) or (2), as applicable. (2) The custodian of an investment fund must, within 60 days after the end of each financial year of the investment fund, advise the investment fund in writing (a) of the names and addresses of all sub-custodians of the investment fund, (b) if the agreements are in compliance with this Part, and (c) if, to the best of the knowledge and belief of the custodian, each subcustodian is an entity that satisfies the requirements of subsection 14.2(1) or (2), as applicable. (3) A copy of the report referred to in subsection (2) must be delivered by or on behalf of the investment fund to the securities regulatory authority within 30 days after the filing of the annual financial statements of the investment fund. _______________ M.O. 2008-05, s. 14.6
14.7. Holding of portfolio assets and payment of fees
(1) Except as provided in subsections (2) and (3) and sections 14.8 and 14.9, portfolio assets not registered in the name of the investment fund must be registered in the name of the custodian or a sub-custodian of the investment fund or any of their respective nominees with an account number or other designation in the records of the custodian sufficient to show that the beneficial ownership of the portfolio assets is vested in the investment fund. (2) The custodian or a sub-custodian of the investment fund or the applicable nominee must segregate portfolio assets issued in bearer form to show that the beneficial ownership of the property is vested in the investment fund. (3) A custodian or sub-custodian of an investment fund may deposit portfolio assets with a depository or a clearing agency that operates a book-based system. (4) The custodian or sub-custodian of an investment fund arranging for the deposit of portfolio assets with, and their delivery to, a depository, or clearing agency, that operates a book-based system must ensure that the records of any of the applicable participants in that book-based system or the custodian contain an account number or other
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 80 designation sufficient to show that the beneficial ownership of the portfolio assets is vested in the investment fund. (5) No investment fund may pay a fee to a custodian or sub-custodian for the transfer of beneficial ownership of portfolio assets other than for safekeeping and administrative services in connection with acting as custodian or sub-custodian. _______________ M.O. 2008-05, s. 14.7.
14.8. Custodial provisions relating to derivatives and securities lending,
repurchases and reverse repurchase agreements (1) For the purposes of subsection (4), “specified derivative” has the same meaning as in Regulation 81-102 respecting Investment Funds (chapter V-1.1, r. 39). (2) An investment fund may deposit portfolio assets as margin for transactions in Canada involving clearing corporation options, options on futures or standardized futures with a dealer that is a member of an SRO that is a participating member of CIPF if the amount of margin deposited does not, when aggregated with the amount of margin already held by the dealer on behalf of the investment fund, exceed 10% of the net assets of the investment fund, taken at market value as at the time of deposit. (3) An investment fund may deposit portfolio assets with a dealer as margin for transactions outside Canada involving clearing corporation options, options on futures or standardized futures if (a) in the case of standardized futures and options on futures, the dealer is a member of a futures exchange or, in the case of clearing corporation options, is a member of a stock exchange, and, as a result in either case, is subject to a regulatory audit, (b) the dealer has a net worth, determined from its most recent audited financial statements that have been made public, in excess of the equivalent of $50,000,000, and (c) the amount of margin deposited does not, when aggregated with the amount of margin already held by the dealer on behalf of the investment fund, exceed 10% of the net assets of the investment fund, taken at market value as at the time of deposit. (4) An investment fund may deposit with its counterparty portfolio assets over which it has granted a security interest in connection with a particular specified derivatives transaction. (5) The agreement by which portfolio assets are deposited in accordance with subsection (2), (3) or (4) must require the person holding the portfolio assets to ensure that its records show that the investment fund is the beneficial owner of the portfolio assets.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 81 (6) An investment fund may deliver portfolio assets to a person in satisfaction of its obligations under a securities lending, repurchase or reverse purchase agreement if the collateral, cash proceeds or purchased securities that are delivered to the investment fund in connection with the transaction are held under the custodianship of the custodian or a sub-custodian of the investment fund in compliance with this Part. _______________ M.O. 2008-05, s. 14.8; M.O. 2014-05, s. 3.
14.8.1. Custodial provisions relating to short sales
(1) For the purposes of subsection (2), “borrowing agent” has the same meaning as in Regulation 81-102 respecting Investment Funds (chapter V-1.1, r. 39). (2) Except where the borrowing agent is the investment fund’s custodian or subcustodian, if an investment fund deposits portfolio assets with a borrowing agent as security in connection with a short sale of securities, the market value of portfolio assets deposited with the borrowing agent must not, when aggregated with the market value of portfolio assets already held by the borrowing agent as security for outstanding short sales of securities by the investment fund, exceed 10% of the net asset value of the investment fund at the time of deposit. (3) An investment fund must not deposit portfolio assets as security in connection with a short sale of securities with a dealer in Canada unless that dealer is a registered dealer and is a member of the Investment Industry Regulatory Organization of Canada. (4) An investment fund must not deposit portfolio assets as security in connection with a short sale of securities with a dealer outside Canada unless that dealer (a) is a member of a stock exchange and is subject to a regulatory audit, and (b) has a net worth, determined from its most recent audited financial statements that have been made public, in excess of the equivalent of $50 million. _______________ M.O. 2012-07, s. 1; M.O. 2014-05, s. 1.
14.9. Separate account for paying expenses
An investment fund may deposit cash in Canada with an entity referred to in paragraph (a) or (b) of subsection 14.2(1) to facilitate the payment of regular operating expenses of the investment fund. _______________ M.O. 2008-05, s. 14.9.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 82
PART 15 DOCUMENTS INCORPORATED BY REFERENCE BY INVESTMENT
FUNDS
15.1. Application
This Part applies only to an investment fund in continuous distribution. _______________ M.O. 2008-05, s. 15.1; M.O. 2013-08, s. 12.
15.2. Incorporation by reference
(1) An investment fund must incorporate by reference into its long form prospectus, by means of a statement to that effect, the filed documents listed in (a) section 37.1 of Form 41-101F2 for investment funds other than scholarship plans, and (b) subsection 4.1(1) of Part B of Form 41-101F3 for scholarship plans. (2) If an investment fund does not incorporate by reference into its long form prospectus a document referred to in subsection (1), the document is deemed, for the purposes of securities legislation, to be incorporated by reference in the investment fund’s long form prospectus as of the date of the long form prospectus. (3) An investment fund must incorporate by reference in its long form prospectus, by means of a statement to that effect, the subsequently filed documents referred to in (a) section 37.2 of Form 41-101F2 for investment funds other than scholarship plans, and (b) subsection 4.1(2) of Part B of Form 41-101F3 for scholarship plans. (4) If an investment fund does not incorporate by reference into its long form prospectus a document referred to in subsection (3), the document is deemed, for the purposes of securities legislation, to be incorporated by reference in the investment fund’s long form prospectus as of the date the investment fund filed the document. _______________ M.O. 2008-05, s. 15.2; M.O. 2013-08, s. 13.
15.3. Documents to be delivered or sent upon request
(1) An ETF must deliver or send to any person that requests the prospectus of the ETF or any of the documents incorporated by reference into the prospectus, a copy of the prospectus or requested document.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 83 (2) A document requested under subsection (1) must be delivered or sent within 3 business days of receipt of the request and free of charge. _______________ M.O. 2017-04, s. 10.
PART 16 DISTRIBUTION OF PRELIMINARY PROSPECTUS AND DISTRIBUTION
LIST
16.1. Distribution of preliminary prospectus and distribution list
Except in Ontario, any dealer distributing a security during the waiting period must (a) send a copy of the preliminary prospectus to each prospective purchaser who indicates an interest in purchasing the security and requests a copy of such preliminary prospectus, and (b) maintain a record of the names and addresses of all persons to whom the preliminary prospectus has been forwarded. _______________ M.O. 2008-05, s. 16.1.
PART 17 LAPSE DATE
17.1. Pro forma prospectus
(1) In this Part, “pro forma prospectus” means a long form prospectus that complies with the requirements described in subsection (2). (2) A pro forma prospectus must be prepared in the form of a long form prospectus in accordance with Form 41-101F1, Form 41-101F2 or Form 41-101F3, as applicable, and other securities legislation, except that a pro forma prospectus is not required to contain prospectus certificates or to comply with sections 4.2, 4.3 and 4.4 of this Regulation. (3) This Part does not apply to a prospectus filed in accordance with Regulation 44-101 respecting Short Form Prospectus Distributions (chapter V-1.1, r. 16), Regulation 44-102 respecting Shelf Distributions (chapter V-1.1, r. 17) or Regulation 44- 103 respecting Post-Receipt Pricing (chapter V-1.1, r. 18). _______________ M.O. 2008-05, s. 17.1; M.O. 2013-08, s. 14.
17.2. Refiling of prospectus
(1) This section does not apply in Ontario.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 84 (2) In this section, “lapse date” means, with reference to the distribution of a security that has been qualified under a prospectus, the date that is 12 months after the date of the most recent final prospectus relating to the security. (3) An issuer must not continue the distribution of a security to which the prospectus requirement applies after the lapse date unless the issuer files a new prospectus that complies with securities legislation and a receipt for that new prospectus is issued by the regulator or, in Québec, the securities regulatory authority. (4) Despite subsection (3), a distribution may be continued for a further 12 months after a lapse date if, (a) the issuer delivers a pro forma prospectus not less than 30 days before the lapse date of the previous prospectus; (b) the issuer files a new final prospectus not later than 10 days after the lapse date of the previous prospectus; and (c) a receipt for the new final prospectus is issued by the regulator or, in Québec, the securities regulatory authority within 20 days after the lapse date of the previous prospectus. (5) The continued distribution of securities after the lapse date does not contravene subsection (3) unless and until any of the conditions of subsection (4) are not complied with. (6) Subject to any extension granted under subsection (7), if a condition in subsection (4) is not complied with, a purchaser may cancel a purchase made in a distribution after the lapse date in reliance on subsection (4) within 90 days after the purchaser first became aware of the failure to comply with the condition. (7) The regulator or, in Québec, the securities regulatory authority may, on an application of a reporting issuer, extend, subject to such terms and conditions as it may impose, the times provided by subsection (4) where in its opinion it would not be prejudicial to the public interest to do so. _______________ M.O. 2008-05, s. 17.2.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 85
PART 18 STATEMENT OF RIGHTS
18.1. Statement of rights
Except in Ontario, a prospectus must contain a statement of the rights given to a purchaser under securities legislation in case of a failure to deliver the prospectus or in case of a misrepresentation in a prospectus. _______________ M.O. 2008-05, s. 18.1.
PART 19 EXEMPTION
19.1. Exemption
(1) The regulator, except in Québec, or the securities regulatory authority may grant an exemption from the provisions of this Regulation, in whole or in part, subject to such conditions or restrictions as may be imposed in the exemption. (2) Despite subsection (1), in Ontario, only the regulator may grant such an exemption. (3) Except in Alberta and Ontario, an exemption referred to in subsection (1) is granted under the statute referred to in Appendix B of Regulation 14-101 respecting Definitions (chapter V-1.1, r. 3) opposite the name of the local jurisdiction. _______________ M.O. 2008-05, s. 19.1; M.O. 2018-03, s. 3.
19.2. Application for exemption
An application made to the securities regulatory authority or regulator for an exemption from the provisions of this Regulation must include a letter or memorandum describing the matters relating to the exemption, and indicating why consideration should be given to the granting of the exemption. _______________ M.O. 2008-05, s. 19.2.
19.3. Evidence of exemption
(1) Subject to subsection (2) and without limiting the manner in which an exemption under this Part may be evidenced, the granting under this Part of an exemption, other than an exemption from subsection 2.2(2), may be evidenced by the issuance of a receipt for a final prospectus or an amendment to a final prospectus. (2) The issuance of a receipt for a final prospectus or an amendment to a final prospectus is not evidence that the exemption has been granted unless
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 86 (a) the person that sought the exemption sent to the regulator or, in Québec, the securities regulatory authority (i) the letter or memorandum referred to in section 19.2 on or before the date of the filing of the pro forma or preliminary prospectus, or (ii) the letter or memorandum referred to in section 19.2 after the date of the filing of pro forma or the preliminary prospectus and received a written acknowledgement from the regulator or, in Québec, the securities regulatory authority that the exemption may be evidenced in the manner set out in subsection (1), and (b) the regulator or, in Québec, the securities regulatory authority has not before, or concurrently with, the issuance of the receipt sent notice to the person that sought the exemption, that the exemption sought may not be evidenced in the manner set out in subsection (1). _______________ M.O. 2008-05, s. 19.3; M.O. 2013-03, s. 10.
PART 20 TRANSITION, EFFECTIVE DATE, AND REPEAL
20.1. (Revoked).
M.O. 2008-05, s. 20.1; M.O. 2010-17, s. 6.
20.2. Effective date
(Omitted).
M.O. 2008-05, s. 20.2.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 87
APPENDIX A
SCHEDULE 1
PART A PERSONAL INFORMATION FORM AND AUTHORIZATION OF
INDIRECT COLLECTION, USE AND DISCLOSURE OF PERSONAL INFORMATION This Personal Information Form and Authorization of Indirect Collection, Use and Disclosure of Personal Information (the “Form”) is to be completed by every individual who, in connection with an issuer filing a prospectus (the “Issuer”), is required to do so under Part 9 of Regulation 41-101 respecting General Prospectus Requirements (chapter V-1.1, r. 14), Part 4 of Regulation 44-101 respecting Short Form Prospectus Distributions (chapter V-1.1, r. 16) or Part 2 of Regulation 81-101 respecting Mutual Fund Prospectus Disclosure (chapter V-1.1, r. 38). The securities regulatory authorities do not make any of the information provided in this Form public. General Instructions:
All Questions
All questions must have a response. The response of “N/A” or “Not Applicable” will not be accepted for any questions, except Questions 1(B), 2(iii) and (v) and 5. For the purposes of answering the questions in this Form, the term “issuer” includes an investment fund manager. Questions 6 to 10 Please place a checkmark (√) in the appropriate space provided. If your answer to any of questions 6 to 10 is “YES”, you must, in an attachment, provide complete details, including the circumstances, relevant dates, names of the parties involved and final disposition, if known. Any attachment must be initialled by the person completing this Form. Responses must consider all time periods. Delivery The issuer should deliver completed Forms electronically via the System for Electronic Document Analysis and Retrieval (SEDAR) under the document type “Personal Information Form and Authorization”. Access to this document type is not available to the public. CAUTION An individual who makes a false statement commits an offence under securities legislation. Steps may be taken to verify the answers you have given in this Form, including verification of information relating to any previous criminal record.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 88 DEFINITIONS “Offence” An offence includes:
(a) a summary conviction or indictable offence under the Criminal Code (R.S., 1985, c. C-46); (b) a quasi-criminal offence (for example under the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)), the Immigration and Refugee Protection Act (S.C., 2001,
c. 27) or the tax, immigration, drugs, firearms, money laundering or securities legislation
of any Canadian or foreign jurisdiction);
(c) a misdemeanour or felony under the criminal legislation of the United States of America, or any state or territory therein; or (d) an offence under the criminal legislation of any other foreign jurisdiction; GUIDANCE: If you have received a pardon under the Criminal Records Act (R.S., 1985, c. C-47) for an Offence that relates to fraud (including any type of fraudulent activity), misappropriation of money or other property, theft, forgery, falsification of books or documents or similar Offences, you must disclose the pardoned Offence in this Form. In such circumstances:
(a) the appropriate written response would be “Yes, pardon granted on (date)”; and (b) you must provide complete details in an attachment to this Form. “Proceedings” means:
(a) a civil or criminal proceeding or inquiry which is currently before a court; (b) a proceeding before an arbitrator or umpire or a person or group of persons authorized by law to make an inquiry and take evidence under oath in the matter; (c) a proceeding before a tribunal in the exercise of a statutory power of decision making where the tribunal is required by law to hold or afford the parties to the proceeding an opportunity for a hearing before making a decision; or (d) a proceeding before a self-regulatory entity authorized by law to regulate the operations and the standards of practice and business conduct of its members (including where applicable, issuers listed on a stock exchange) and individuals associated with those members and issuers, in which the self-regulatory entity is required under its by-laws, rules or policies to hold or afford the parties the opportunity to be heard before making a decision, but does not apply to a proceeding in which one or more persons are required to make an investigation and to make a report, with or without
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 89 recommendations, if the report is for the information or advice of the person to whom it is made and does not in any way bind or limit that person in any decision the person may have the power to make; “securities regulatory authority” or “SRA” means a body created by statute in any Canadian or foreign jurisdiction to administer securities law, regulation and policy (e.g. securities commission), but does not include an exchange or other self regulatory entity; “self regulatory entity” or “SRE” means:
(a) a stock, derivatives, commodities, futures or options exchange; (b) an association of investment, securities, mutual fund, commodities, or future dealers; (c) an association of investment counsel or portfolio managers; (d) an association of other professionals (e.g. legal, accounting, engineering); and (e) any other group, institution or self-regulatory organization, recognized by a securities regulatory authority, that is responsible for the enforcement of rules, policies, disciplines or codes under any applicable legislation, or considered an SRE in another country.
- IDENTIFICATION OF INDIVIDUAL COMPLETING FORM
A. LAST NAME(S) FIRST NAME(S) FULL MIDDLE NAME(S) (No initials. If none, please state) NAME(S) MOST COMMONLY KNOWN BY:
NAME OF ISSUER
PRESENT or PROPOSED
POSITION(S) WITH THE
ISSUER – check (√) all positions below that are applicable.
IF DIRECTOR / OFFICER
DISCLOSE THE DATE
ELECTED / APPOINTED
IF OFFICER – PROVIDE
TITLE
IF OTHER – PROVIDE
DETAILS
(√) Month Day Year
Director
Officer
Other
B. Other than the name given in Question 1A above, provide any legal names, assumed names or nicknames under which you have carried on business or have otherwise been known, including information regarding any name change(s) resulting from marriage, divorce, court order or any other process. Use an attachment if necessary. FROM TO MM YY MM YY
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 90
C. GENDER DATE OF BIRTH PLACE OF BIRTH
Month Day Year City Province/State Country
Male
Female
D. MARITAL STATUS FULL NAME OF SPOUSE – include common-law OCCUPATION OF SPOUSE E. TELEPHONE AND FACSIMILE NUMBERS AND E-MAIL ADDRESS RESIDENTIAL ( ) FACSIMILE ( ) BUSINESS ( ) E-MAIL*
- Provide an email address that the regulator or, in Québec, the securities regulatory authority may use to contact you
regarding this personal information form. This email address may be used to exchange personal information relating to you. F. RESIDENTIAL HISTORY – Provide all residential addresses for the past 10 YEARS starting with your current principal residential address. If you are unable to recall the complete residential address for a period which is beyond 5 years from the date of completion of this Form, the municipality and province or state and country must be identified. The regulator or, in Québec, the securities regulatory authority reserves the right to require the full address. STREET ADDRESS, CITY, PROVINCE/STATE, COUNTRY & POSTAL/ZIP CODE FROM TO MM YY MM YY
- CITIZENSHIP
YES NO
(i) Are you a Canadian citizen?
(ii) Are you a person lawfully in Canada as an immigrant but are not yet a Canadian citizen? (iii) If “Yes” to Question 2(ii), the number of years of continuous residence in Canada:
(iv) Do you hold citizenship in any country other than Canada?
(v) If “Yes” to Question 2(iv), the name of the country(ies): - EMPLOYMENT HISTORY
Provide your complete employment history for the 5 YEARS immediately prior to the date of this Form starting with your current employment. Use an attachment if necessary. If you were unemployed during this period of time, state this and identify the period of unemployment. EMPLOYER NAME EMPLOYER ADDRESS POSITION HELD FROM TO MM YY MM YY
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4. INVOLVEMENT WITH ISSUERS
YES NO
A. Are you or have you during the last 10 years ever been a director, officer, promoter, insider or control person for any reporting issuer? B. If “YES” to 4A above, provide the names of each reporting issuer. State the position(s) held and the period(s) during which you held the position(s). Use an attachment if necessary. NAME OF REPORTING ISSUER POSITION(S) HELD MARKET TRADED ON FROM TO MM YY MM YY YES NO
C. While you were a director, officer or insider of an issuer, did any exchange or other selfregulatory entity ever refuse approval for listing or quotation of the issuer, including (i) a
listing resulting from a business combination, reverse takeover or similar transaction involving the issuer that is regulated by an SRE or SRA, (ii) a backdoor listing or qualifying acquisition involving the issuer (as those terms are defined in the TSX Company Manual as amended from time to time) or (iii) a qualifying transaction, reverse takeover or change of business involving the issuer (as those terms are defined in the TSX Venture Corporate Finance Manual as amended from time to time)? If yes, attach full particulars.
5. EDUCATIONAL HISTORY
A. PROFESSIONAL DESIGNATION(S) – Identify any professional designation held and professional associations to which you belong, for example, Barrister & Solicitor, C.A., C.M.A., C.G.A., P.Eng., P.Geol., CFA, etc. and indicate which organization and the date the designations were granted. PROFESSIONAL DESIGNATION and MEMBERSHIP NUMBER GRANTOR OF DESIGNATION and CANADIAN or FOREIGN JURISDICTION DATE GRANTED MM YY Describe the current status of any designation and/or association (e.g. active, retired, non-practicing, suspended)
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 92 B. Provide your post-secondary educational history starting with the most recent. SCHOOL LOCATION DEGREE OR DIPLOMA DATE OBTAINED MM DD YY
6. OFFENCES
If you answer “YES” to any item in Question 6, you must provide complete details in an attachment. If you have received a pardon under the Criminal Records Act (R.S.C., 1985, c. C-47) for an Offence that relates to fraud (including any type of fraudulent activity), misappropriation of money or other property, theft, forgery, falsification of books or documents or similar Offences, you must disclose the pardoned Offence in this Form. YES NO A. Have you ever, in any Canadian or foreign jurisdiction, pled guilty to or been found guilty of an Offence? B. Are you the subject of any current charge, indictment or proceeding for an Offence, in any Canadian or foreign jurisdiction?
C. To the best of your knowledge, are you currently or have you ever been a director, officer,
promoter, insider, or control person of an issuer, in any Canadian or foreign jurisdiction, at the time of events that resulted in the issuer:
(i) pleading guilty to or being found guilty of an Offence?
(ii) now being the subject of any charge, indictment or proceeding for an alleged Offence?
7. BANKRUPTCY
If you answer “YES” to any item in Question 7, you must provide complete details in an attachment and attach a copy of any discharge, release or other applicable document. You must answer “YES” or “NO” for EACH of (A), (B) and (C), below. YES NO A. Have you, in any Canadian or foreign jurisdiction, within the past 10 years had a petition in bankruptcy issued against you, made a voluntary assignment in bankruptcy, made a proposal under any bankruptcy or insolvency legislation, been subject to any proceeding, arrangement or compromise with creditors, or had a receiver, receiver-manager or trustee appointed to manage your assets? B. Are you now an undischarged bankrupt?
C. To the best of your knowledge, are you currently or have you ever been a director, officer,
promoter, insider or control person of an issuer, in any Canadian or foreign jurisdiction, at the time of events, or for a period of 12 months preceding the time of events, where the issuer:
(i) has made a petition in bankruptcy, a voluntary assignment in bankruptcy, a proposal under any bankruptcy or insolvency legislation, been subject to any proceeding, arrangement or compromise with creditors or had a receiver, receiver-manager or trustee appointed to manage the issuer’s assets? (ii) is now an undischarged bankrupt?
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 93
8. PROCEEDINGS
If you answer “YES” to any item in Question 8, you must provide complete details in an attachment. YES NO A. CURRENT PROCEEDINGS BY SECURITIES REGULATORY AUTHORITY OR SELF REGULATORY ENTITY. Are you now, in any Canadian or foreign jurisdiction, the subject of:
(i) a notice of hearing or similar notice issued by an SRA or SRE?
(ii) a proceeding of or, to your knowledge, an investigation by, an SRA or SRE? (iii) settlement discussions or negotiations for settlement of any nature or kind whatsoever with an SRA or SRE? YES NO B. PRIOR PROCEEDINGS BY SECURITIES REGULATORY AUTHORITY OR SELF REGULATORY ENTITY. Have you ever:
(i) been reprimanded, suspended, fined, been the subject of an administrative penalty, or been the subject of any proceedings of any kind whatsoever, in any Canadian or foreign jurisdiction, by an SRA or SRE? (ii) had a registration or licence for the trading of securities, exchange or commodity futures contracts, real estate, insurance or mutual fund products cancelled, refused, restricted or suspended, by an SRA or SRE? (iii) been prohibited or disqualified by an SRA or SRE under securities, corporate or any other legislation from acting as a director or officer of a reporting issuer or been prohibited or restricted by an SRA or SRE from acting as a director, officer or employee of, or an agent or consultant to, a reporting issuer? (iv) had a cease trading or similar order issued against you or an order issued against you by an SRA or SRE that denied you the right to use any statutory prospectus or registration exemption? (v) had any other proceeding of any kind taken against you by an SRA or SRE? YES NO
C. SETTLEMENT AGREEMENT(S)
Have you ever entered into a settlement agreement with an SRA, SRE, attorney general or comparable official or body, in any Canadian or foreign jurisdiction, in a matter that involved actual or alleged fraud, theft, deceit, misrepresentation, conspiracy, breach of trust, breach of fiduciary duty, insider trading, unregistered trading in securities or exchange or commodity futures contracts, illegal distributions, failure to disclose material facts or changes or similar conduct, or any other settlement agreement with respect to any other violation of securities legislation in a Canadian or foreign jurisdiction or the rules, bylaws or policies of any SRE? YES NO D. To the best of your knowledge, are you now or have you ever been a director, officer, promoter, insider, or control person of an issuer at the time of such event, in any Canadian or foreign jurisdiction, for which a securities regulatory authority or self regulatory entity has:
(i) refused, restricted, suspended or cancelled the registration or licensing of an issuer to trade securities, exchange or commodity futures contracts, or to sell or trade real estate, insurance or mutual fund products? (ii) issued a cease trade or similar order or imposed an administrative penalty of any nature or kind whatsoever against the issuer, other than an order for failure to file financial statements that was revoked within 30 days of its issuance? (iii) refused a receipt for a prospectus or other offering document, denied any application for listing or quotation or any other similar application, or issued an order that denied the issuer the right to use any statutory prospectus or registration exemptions? (iv) issued a notice of hearing, notice as to a proceeding or similar notice against the issuer?
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 94 (v) commenced any other proceeding of any kind against the issuer, including a trading halt, suspension or delisting of the issuer, in connection with an alleged or actual contravention of an SRA’s or SRE’s rules, regulations, policies or other requirements, but excluding halts imposed (i) in the normal course for proper dissemination of information, or (ii) pursuant to a business combination, reverse takeover or similar transaction involving the issuer that is regulated by an SRE or SRA, including a qualifying transaction, reverse takeover or change of business involving the issuer (as those terms are defined in the TSX Venture Corporate Finance Manual as amended from time to time)? (vi) entered into a settlement agreement with the issuer in a matter that involved actual or alleged fraud, theft, deceit, misrepresentation, conspiracy, breach of trust, breach of fiduciary duty, insider trading, unregistered trading in securities or exchange or commodity futures contracts, illegal distributions, failure to disclose material facts or changes or similar conduct by the issuer, or any other violation of securities legislation or the rules, by-laws or policies of an SRE?
9. CIVIL PROCEEDINGS
If you answer “YES” to any item in Question 9, you must provide complete details in an attachment. YES NO A. JUDGMENT, GARNISHMENT AND INJUNCTIONS Has a court in any Canadian or foreign jurisdiction:
(i) rendered a judgment, ordered garnishment or issued an injunction or similar ban (whether by consent or otherwise) against you in a claim based in whole or in part on fraud, theft, deceit, misrepresentation, conspiracy, breach of trust, breach of fiduciary duty, insider trading, unregistered trading, illegal distributions, failure to disclose material facts or changes, or allegations of similar conduct? (ii) rendered a judgment, ordered garnishment or issued an injunction or similar ban (whether by consent or otherwise) against an issuer of which you are currently or have ever been a director, officer, promoter, insider or control person in a claim based in whole or in part on fraud, theft, deceit, misrepresentation, conspiracy, breach of trust, breach of fiduciary duty, insider trading, unregistered trading, illegal distributions, failure to disclose material facts or changes, or allegations of similar conduct? YES NO B. CURRENT CLAIMS (i) Are you now subject, in any Canadian or foreign jurisdiction, to a claim that is based in whole or in part on actual or alleged fraud, theft, deceit, misrepresentation, conspiracy, breach of trust, breach of fiduciary duty, insider trading, unregistered trading, illegal distributions, failure to disclose material facts or changes, or allegations of similar conduct? (ii) To the best of your knowledge, are you currently or have you ever been a director, officer, promoter, insider or control person of an issuer that is now subject, in any Canadian or foreign jurisdiction, to a claim that is based in whole or in part on actual or alleged fraud, theft, deceit, misrepresentation, conspiracy, breach of trust, breach of fiduciary duty, insider trading, unregistered trading, illegal distributions, failure to disclose material facts or changes, or allegations of similar conduct?
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 95 YES NO
C. SETTLEMENT AGREEMENT
(i) Have you ever entered into a settlement agreement, in any Canadian or foreign jurisdiction, in a civil action that involved actual or alleged fraud, theft, deceit, misrepresentation, conspiracy, breach of trust, breach of fiduciary duty, insider trading, unregistered trading, illegal distributions, failure to disclose material facts or changes, or allegations of similar conduct? (ii) To the best of your knowledge, are you currently or have you ever been a director, officer, promoter, insider or control person of an issuer that has entered into a settlement agreement, in any Canadian or foreign jurisdiction, in a civil action that involved actual or alleged fraud, theft, deceit, misrepresentation, conspiracy, breach of trust, breach of fiduciary duty, insider trading, unregistered trading, illegal distributions, failure to disclose material facts or changes, or allegations of similar conduct?
10. INVOLVEMENT WITH OTHER ENTITIES
YES NO
A. Has your employment in a sales, investment or advisory capacity with any employer engaged in the sale of real estate, insurance or mutual funds ever been suspended or terminated for cause? If yes, attach full particulars. B. Has your employment with a firm or company registered under the securities laws of any Canadian or foreign jurisdiction as a securities dealer, broker, investment advisor or underwriter, ever been suspended or terminated for cause? If yes, attach full particulars.
C. Has your employment as an officer of an issuer ever been suspended or terminated for
cause? If yes, attach full particulars.
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SCHEDULE 1
PART B CERTIFICATE AND CONSENT
I, hereby certify that:
(Please Print – Name of Individual)
(a) I have read and understand the questions, cautions, acknowledgement and consent in the personal information form to which this certificate and consent is attached or of which this certificate and consent forms a part (the “Form”), and the answers I have given to the questions in the Form and in any attachments to it are correct, except where stated to be answered to the best of my knowledge, in which case I believe the answers to be correct; (b) I have been provided with and have read and understand the Personal Information Collection Policy (the “Personal Information Collection Policy”) in Schedule 2 of Appendix A to Regulation 41-101 respecting General Prospectus Requirements; (c) I consent to the collection, use and disclosure by a regulator or a securities regulatory authority listed in Schedule 3 of Appendix A to Regulation 41-101 respecting General Prospectus Requirements (collectively the “regulators”) of the information in the Form and to the collection, use and disclosure by the regulators of further personal information in accordance with the Personal Information Collection Policy including the collection, use and disclosure by the regulators of the information in the Form in respect of the prospectus filings of the Issuer and the prospectus filings of any other issuer in a situation where I am or will be:
(i) a director, executive officer or promoter of the other issuer, (ii) a director or executive officer of a promoter of the other issuer, if the promoter is not an individual, or (iii) where the other issuer is an investment fund, a director or executive officer of the investment fund manager; and (d) I am aware that I am providing the Form to the regulators and I understand that I am under the jurisdiction of the regulators to which I submit the Form, and that it is a breach of securities legislation to provide false or misleading information to the regulators, whenever the Form is provided in respect of the prospectus filings of the Issuer or the prospectus filings of any other issuer of which I am or will be a director, executive officer or promoter. Date [within 30 days of the date of the preliminary prospectus] Signature of Person Completing this Form
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 97
SCHEDULE 2
PERSONAL INFORMATION COLLECTION POLICY
The regulators and securities regulatory authorities (the “regulators”) listed in
Schedule 3 of Appendix A to Regulation 41-101 respecting General Prospectus
Requirements collect the personal information in the personal information form as this term is defined in Regulation 41-101 respecting General Prospectus Requirements (the “Personal Information Form”), under the authority granted to them under provincial and territorial securities legislation. Under securities legislation, the regulators do not make any of the information provided in the Personal Information Form public. The regulators collect the personal information in the Personal Information Form for the purpose of enabling the regulators to administer and enforce provincial and territorial securities legislation, including those provisions that require or permit the regulators to refuse to issue a receipt for a prospectus if it appears to the regulators that the past conduct of management or promoters of the Issuer affords reasonable grounds for belief that the business of the Issuer will not be conducted with integrity and in the best interests of its securityholders. You understand that by signing the certificate and consent in the Personal Information Form, you are consenting to the Issuer submitting your personal information in the Personal Information Form (the “Information”) to the regulators and to the collection and use by the regulators of the Information, as well as any other information that may be necessary to administer and enforce provincial and territorial securities legislation. This may include the collection of information from law enforcement agencies, other government or non-governmental regulatory authorities, self-regulatory organizations, exchanges, and quotation and trade reporting systems in order to conduct background checks, verify the Information and perform investigations and conduct enforcement proceedings as required to ensure compliance with provincial and territorial securities legislation. Your consent also extends to the collection, use and disclosure of the Information as described above in respect of other prospectus filings of the Issuer and the prospectus filings of any other issuer in a situation where you are or will be a:
(a) a director, executive officer or promoter of the other issuer, (b) a director or executive officer of a promoter of the other issuer, if the promoter is not an individual, or (c) where the other issuer is an investment fund, a director or executive officer of the investment fund manager. You understand that the Issuer is required to deliver the Information to the regulators because the Issuer has filed a prospectus under provincial and territorial securities legislation. You also understand that you have a right to be informed of the existence of personal information about you that is kept by regulators, that you have the right to request access to that information, and that you have the right to request that such
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 98 information be corrected, subject to the applicable provisions of the freedom of information and protection of privacy legislation adopted by each province and territory. You also understand and agree that the Information the regulators collect about you may also be disclosed, as permitted by law, where its use and disclosure is for the purposes described above. The regulators may also use a third party to process the Information, but when this happens, the third party will be carefully selected and obligated to comply with the limited use restrictions described above and with provincial and federal privacy legislation. Warning: It is an offence to submit information that, in a material respect and at the time and in the light of the circumstances in which it is submitted, is misleading or untrue. Questions If you have any questions about the collection, use, and disclosure of the information you provide to the regulators, you may contact the regulator in the jurisdiction in which the required information is filed, at the address or telephone number listed in
Schedule 3.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 99
SCHEDULE 3
REGULATORS AND SECURITIES REGULATORY AUTHORITIES Local Jurisdiction Regulator Alberta Securities Review Officer Alberta Securities Commission Suite 600 250 – 5th Street S.W Calgary, Alberta T2P 0R4 Telephone: 403-297-6454 E-mail: inquiries@seccom.ab.ca www.albertasecurities.com British Columbia Review Officer British Columbia Securities Commission P.O. Box 10142 Pacific Centre 701 West Georgia Street Vancouver, British Columbia V7Y 1L2 Telephone: 604-899-6854 Toll Free within British Columbia and Alberta: 800-373-6393 E-mail: inquiries@bcsc.bc.ca www.bcsc.bc.ca Manitoba Director, Corporate Finance The Manitoba Securities Commission 500-400 St. Mary Avenue Winnipeg, Manitoba R3C 4K5 Telephone: 204-945-2548 E-mail: securities@gov.mb.ca www.msc.gov.mb.ca New Brunswick Director Corporate Finance and Chief Financial Officer New Brunswick Securities Commission 85 Charlotte Street, Suite 300 Saint John, New Brunswick E2L 2J2 Telephone: 506-658-3060 Fax: 506-658-3059 E-mail: information@nbsc-cvmnb.ca
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 100 Local Jurisdiction Regulator Newfoundland and Labrador Director of Securities Department of Government Services and Lands P.O. Box 8700 West Block, 2nd Floor, Confederation Building St. John’s, Newfoundland A1B 4J6 Telephone: 709-729-4189 www.gov.nf.ca/gsl/cca/s Northwest Territories Superintendent of Securities Department of Justice Government of the Northwest Territories P.O. Box 1320, Yellowknife, Northwest Territories X1A 2L9 Telephone: 867-873- 7490 www.justice.gov.nt.ca/SecuritiesRegistry Nova Scotia Deputy Director Compliance and Enforcement Division Nova Scotia Securities Commission P.O. Box 458 Halifax, Nova Scotia B3J 2P8 Telephone: 902-424-5354 www.gov.ns.ca/nssc Nunavut Superintendent of Securities Government of Nunavut Legal Registries Division P.O. Box 1000 – Station 570 Iqaluit, Nunavut X0A 0H0 Telephone: 867-975-6590 Ontario Administrative Assistant to the Director of Corporate Finance Ontario Securities Commission 19th Floor, 20 Queen Street West Toronto, Ontario M5H 2S8 Telephone: 416-597-0681 E-mail: Inquiries@osc.gov.on.ca www.osc.gov.on.ca
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 101 Local Jurisdiction Regulator Prince Edward Island Superintendent of Securities Government of Prince Edward Island 95 Rochford Street, P.O. Box 2000, 4th Floor Charlottetown, Prince Edward Island C1A 7N8 Telephone: 902-368-4550 www.gov.pe.ca/securities Québec Autorité des marchés financiers 800, square Victoria, 22e étage C.P. 246, tour de la Bourse Montréal (Québec) H4Z 1G3 Attention: Responsable de l’accès à l’information Telephone: 514-395-0337 Toll Free in Québec: 1-877-525-0337 www.lautorite.qc.ca Saskatchewan Director Financial and Consumer Affairs Authority of Saskatchewan Suite 601, 1919 Saskatchewan Drive Regina, Saskatchewan S4P 4H2 Telephone: 306-787-5842 www.fcaa.gov.sk.ca Yukon Superintendent of Securities Office of the Yukon Superintendent of Securities Department of Community Services 307 Black Street, Whitehorse, Yukon, Y1A 2N1 Phone: 867-667-5466, Fax: 867-393-6251 _______________ M.O. 2008-05, Sch. A; M.O. 2010-17, s. 7; M.O. 2013-03, s. 11.
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APPENDIX B ISSUER FORM OF SUBMISSION TO JURISDICTION AND
APPOINTMENT OF AGENT FOR SERVICE OF PROCESS
- Name of issuer (the "Issuer"):
- Jurisdiction of incorporation, or equivalent, of Issuer:
- Address of principal place of business of Issuer:
- Description of securities (the "Securities"):
- Date of the prospectus (the "Prospectus") under which the Securities are offered:
- Name of agent for service of process (the "Agent"):
- Address for service of process of Agent in Canada (the address may be anywhere
in Canada): - The Issuer designates and appoints the Agent at the address of the Agent stated
above as its agent upon whom may be served any notice, pleading, subpoena, summons or other process in any action, investigation or administrative, criminal, quasi-criminal, penal or other proceeding (the "Proceeding") arising out of, relating to or concerning the distribution of the Securities made or purported to be made under the Prospectus or the obligations of the Issuer as a reporting issuer, and irrevocably waives any right to raise as a defence in any such Proceeding any alleged lack of jurisdiction to bring such Proceeding. - The Issuer irrevocably and unconditionally submits to the non-exclusive jurisdiction
of
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 103 (a) the judicial, quasi-judicial and administrative tribunals of each of the provinces [and territories] of Canada in which the securities are distributed under the Prospectus; and (b) any administrative proceeding in any such province [or territory], in any Proceeding arising out of or related to or concerning the distribution of the Securities made or purported to be made under the Prospectus or the obligations of the issuer as a reporting issuer.
10. Until 6 years after it has ceased to be a reporting issuer in any Canadian province
or territory, the Issuer shall file a new submission to jurisdiction and appointment of agent for service of process in this form at least 30 days before termination of this submission to jurisdiction and appointment of agent for service of process.
11. Until 6 years after it has ceased to be a reporting issuer in any Canadian province
or territory, the Issuer shall file an amended submission to jurisdiction and appointment of agent for service of process at least 30 days before any change in the name or above address of the Agent.
12. This submission to jurisdiction and appointment of agent for service of process
shall be governed by and construed in accordance with the laws of [insert province or territory of above address of Agent]. Dated:
Signature of Issuer
Print name and title of signing officer of Issuer AGENT The undersigned accepts the appointment as agent for service of process of [insert name of Issuer] under the terms and conditions of the appointment of agent for service of process stated above. Date :
Signature of Agent
Print name of person signing and, if Agent is not an individual, the title of the person _______________ M.O. 2008-05, Sch. B.
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APPENDIX C NON-ISSUER FORM OF SUBMISSION TO JURISDICTION AND
APPOINTMENT OF AGENT FOR SERVICE OF PROCESS
- Name of issuer (the "Issuer"):
- Jurisdiction of incorporation, or equivalent, of Issuer:
- Address of principal place of business of Issuer:
- Description of securities (the "Securities"):
- Date of the prospectus (the "Prospectus") under which the Securities are offered:
- Name of person filing this form (the "Filing Person"):
- Filing Person’s relationship to Issuer:
- Jurisdiction of incorporation, or equivalent, of Filing Person, if applicable, or
jurisdiction of residence of Filing Person: - Address of principal place of business of Filing Person:
- Name of agent for service of process (the "Agent"):
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 105
11. Address for service of process of Agent in Canada (the address may be anywhere
in Canada):
12. The Filing Person designates and appoints the Agent at the address of the Agent
stated above as its agent upon whom may be served any notice, pleading, subpoena, summons or other process in any action, investigation or administrative, criminal, quasicriminal, penal or other proceeding (the "Proceeding") arising out of, relating to or concerning the distribution of the Securities made or purported to be made under the Prospectus, and irrevocably waives any right to raise as a defence in any such Proceeding any alleged lack of jurisdiction to bring the Proceeding.
13. The Filing Person irrevocably and unconditionally submits to the non-exclusive
jurisdiction of
(a) the judicial, quasi-judicial and administrative tribunals of each of the provinces [and territories] of Canada in which the securities are distributed under the Prospectus; and (b) any administrative proceeding in any such province [or territory], in any Proceeding arising out of or related to or concerning the distribution of the Securities made or purported to be made under the Prospectus.
14. Until 6 years after completion of the distribution of the Securities made under the
Prospectus, the Filing Person shall file a new submission to jurisdiction and appointment of agent for service of process in this form at least 30 days before termination of this submission to jurisdiction and appointment of agent for service of process.
15. Until 6 years after completion of the distribution of the Securities under the
Prospectus, the Filing Person shall file an amended submission to jurisdiction and appointment of agent for service of process at least 30 days before a change in the name or above address of the Agent.
16. This submission to jurisdiction and appointment of agent for service of process
shall be governed by and construed in accordance with the laws of [insert province or territory of above address of Agent]. Dated:
Signature of Filing Person
Print name of person signing and, if the Filing Person is not an individual, the title of the person
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 106 AGENT The undersigned accepts the appointment as agent for service of process of [insert name of Filing Person] under the terms and conditions of the appointment of agent for service of process stated above. Dated: Dated:
Signature of Agemt
Print name of person signing and, if Agent is not an individual, the title of the person _______________ M.O. 2008-05, Sch. C; M.O. 2013-03, s. 12.
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APPENDIX D PRELIMINARY PROSPECTUS NOTICE PROVISIONS
Jurisdiction Securities Legislation Reference Alberta Paragraph 123(a) of the Securities Act (R.S.A. 2000, c. S-4) British Columbia Paragraph 78(2)(a) of the Securities Act (R.S.B.C. 1996, ch. 418) Manitoba Paragraph 38(b) of the Securities Act (C.C.S.M. c. S50) New Brunswick Paragraph 82(2)(a) of the Securities Act (SNB 2004, c S-5.5) Newfoundland and Labrador Paragraph 66(2)(a) of the Securities Act (R.S.N.L. 1990, c. S-13) Northwest Territories Paragraph 97(a) of the Securities Act (SNWT 2008, c. 10) Nova Scotia Paragraph 70(2)(a) of the Securities Act (R.S.N.S. 1989, c. 418) Nunavut Paragraph 97(a) of the Securities Act (S.Nu. 2008, c. 12) Ontario Paragraph 65(2)(a) of the Securities Act (R.S.O. 1990, c. S.5) Prince Edward Island Paragraph 97(a) of the Securities Act (R.S.P.E.I. 1988, c S-3) Saskatchewan Paragraph 73(2)(a) of The Securities Act, 1988 (S.S. 1988-89, c. S-42.2) Yukon Paragraph 97(a) of the Securities Act (R.S.Y. 2002, c. 201) _______________ M.O. 2013-13, s. 8
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APPENDIX E FINAL PROSPECTUS NOTICE PROVISIONS
Jurisdiction Securities Legislation Reference British Columbia Paragraph 82(c) of the Securities Act New Brunswick Section 86 of the Securities Act, but only in respect of a communication described in paragraph 82(2)(a) of that Act Newfoundland and Labrador Section 70 of the Securities Act, but only in respect of a communication described in paragraph 66(2)(a) of that Act Nova Scotia Section 74 of the Securities Act, but only in respect of a communication described in paragraph 70(2)(a) of that Act Ontario Section 69 of the Securities Act (Ontario), but only in respect of a communication described in clause 65(2)(a) of that Act Saskatchewan Paragraph 77(c) of The Securities Act, 1988 _______________ M.O. 2013-13, s. 8
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 109 FORM 41-101F1 INFORMATION REQUIRED IN A PROSPECTUS GENERAL INSTRUCTIONS (1) The objective of the prospectus is to provide information concerning the issuer that an investor needs in order to make an informed investment decision. This Form sets out specific disclosure requirements that are in addition to the general requirement under securities legislation to provide full, true and plain disclosure of all material facts relating to the securities to be distributed. Certain rules of specific application impose prospectus disclosure obligations in addition to those described in this Form. (2) Terms used and not defined in this Form that are defined or interpreted in the Regulation bear that definition or interpretation. Other definitions are set out in Regulation 14-101 respecting Definitions (chapter V-1.1, r. 3). (3) In determining the degree of detail required, a standard of materiality must be applied. Materiality is a matter of judgment in the particular circumstance, and is determined in relation to an item’s significance to investors, analysts and other users of the information. An item of information, or an aggregate of items, is considered material if it is probable that its omission or misstatement would influence or change an investment decision with respect to the issuer’s securities. In determining whether information is material, take into account both quantitative and qualitative factors. The potential significance of items must be considered individually rather than on a net basis, if the items have an offsetting effect. (4) Unless an item specifically requires disclosure only in the preliminary prospectus, the disclosure requirements set out in this Form apply to both the preliminary prospectus and the prospectus. Details concerning the price and other matters dependent upon or relating to price, such as the number of securities being distributed, may be left out of the preliminary prospectus, along with specifics concerning the plan of distribution, to the extent that these matters have not been decided. (5) The disclosure must be understandable to readers and presented in an easy-toread format. The presentation of information should comply with the plain language principles listed in section 4.1 of Policy Statement to Regulation 41-101 respecting General Prospectus Requirements (Decision 2008-PDG-0055, 2008-02-28). If technical terms are required, clear and concise explanations should be included. (6) No reference need be made to inapplicable items and, unless otherwise required in this Form, negative answers to items may be omitted. (7) Where the term “issuer” is used, it may be necessary, in order to meet the requirement for full, true and plain disclosure of all material facts, to also include disclosure with respect to persons that the issuer is required, under the issuer’s GAAP, to consolidate, proportionately consolidate or
account for using the equity method (for example, including "subsidiaries" as that term is used in Canadian GAAP applicable to
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 110 publicly accountable enterprises). If it is more likely than not that a person will become an entity that the issuer will be required, under the issuer’s GAAP, to consolidate, proportionately consolidate or account for using the equity method, it may be necessary to also include disclosure with respect to the person. (8) An issuer that is a special purpose entity may have to modify the disclosure items to reflect the special purpose nature of its business. (9) If disclosure is required as of a specific date and there has been a material change or change that is otherwise significant in the required information subsequent to that date, present the information as of the date of the change or a date subsequent to the change instead. (10) If an issuer discloses financial information in a preliminary prospectus or prospectus in a currency other than the Canadian dollar, prominently display the presentation currency. (11) Except as otherwise required or permitted, include information in a narrative form. The issuer may include graphs, photographs, maps, artwork or other forms of illustration, if relevant to the business of the issuer or the distribution and not misleading. Include descriptive headings. Except for information that appears in a summary, information required under more than 1 Item need not be repeated. (12) Certain requirements in this Form make reference to requirements in another regulation or form. Unless this Form states otherwise, issuers must also follow the instruction or requirement in the other regulation or form. These references include references to Form 51-102F2 of Regulation 51-102 respecting Continuous Disclosure Obligations (chapter V-1.1, r. 24). Venture issuers must include such disclosure in a preliminary prospectus or prospectus even if they are not otherwise required to file an annual information form under that regulation. (13) Wherever this Form uses the word “subsidiary”, the term includes companies and other types of business organizations such as partnerships, trusts and other unincorporated business entities. (14) Where requirements in this Form make reference to, or are substantially similar to, requirements in Form 51-102F2 of Regulation 51-102 respecting Continuous Disclosure Obligations, issuers may apply the general provision in subpart 1(d) of Form 51-102F2 of Regulation 51-102 respecting Continuous Disclosure Obligations. However, issuers must supplement this disclosure if the supplemented disclosure is necessary to ensure that the prospectus provides full, true and plain disclosure of all material facts related to the securities to be distributed as required under Item 29 of this Form. (15) Forward-looking information, as defined in Regulation 51-102 respecting Continuous Disclosure Obligations, included in a prospectus must comply with
section 4A.2 of Regulation 51-102 respecting Continuous Disclosure Obligations and
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 111 must include the disclosure described in section 4A.3 of Regulation 51-102 respecting Continuous Disclosure Obligations. In addition to the foregoing, FOFI or a financial outlook, each as defined in Regulation 51-102 respecting Continuous Disclosure Obligations, included in a prospectus must comply with Part 4B of Regulation 51-102 respecting Continuous Disclosure Obligations. If the forward-looking information relates to an issuer or other entity that is not a reporting issuer in any jurisdiction, section 4A.2,
section 4A.3 and Part 4B of Regulation 51-102 respecting Continuous Disclosure
Obligations apply as if the issuer or other entity were a reporting issuer in at least 1 jurisdiction. (16) Marketing materials prepared in accordance with subsections 13.7(1) or 13.8(1) of the Regulation are the only documents that can be incorporated by reference into a long form prospectus. Item 1 Cover Page Disclosure
1.1. Required statement
State in italics at the top of the cover page the following:
“No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise.”
1.2. Preliminary prospectus disclosure
Every preliminary prospectus must have printed in red ink and in italics at the top of the cover page immediately above the disclosure required under section 1.1 the following, with the bracketed information completed:
“A copy of this preliminary prospectus has been filed with the securities regulatory authority(ies) in [each of/certain of the provinces/provinces and territories of Canada] but has not yet become final for the purpose of the sale of securities. Information contained in this preliminary prospectus may not be complete and may have to be amended. The securities may not be sold until a receipt for the prospectus is obtained from the securities regulatory authority(ies).” INSTRUCTION Issuers must complete the bracketed information by (a) inserting the names of each jurisdiction in which the issuer intends to offer securities under the prospectus, (b) stating that the filing has been made in each of the provinces of Canada or each of the provinces and territories of Canada, or
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 112 (c) identifying the filing jurisdictions by exception (i.e., every province of Canada or every province and territory of Canada, except [excluded jurisdictions]).
1.3. Basic disclosure about the distribution
State the following immediately below the disclosure required under sections 1.1 and 1.2 with the bracketed information completed:
“[PRELIMINARY] PROSPECTUS
[INITIAL PUBLIC OFFERING OR NEW ISSUE AND/OR SECONDARY OFFERING] [(Date)] [Name of Issuer] [number and type of securities qualified for distribution under the prospectus, including any options or warrants, and the price per security]”
1.4. Distribution
(1) If the securities are being distributed for cash, provide the information called for below, in substantially the following tabular form or in a note to the table:
Price to public
(a)
Underwriting discounts or commission
(b)
Proceeds to issuer selling securityholders
(c)
Per Security
Total
(2) Describe the terms of any over-allotment option or any option to increase the size of the distribution before closing. (2.1) If there may be an over-allocation position provide the following disclosure:
A purchaser who acquires [insert type of securities qualified for distribution under the prospectus] forming part of the underwriters’ over-allocation position acquires those securities under this prospectus, regardless of whether the over-allocation position is ultimately filled through the exercise of the over-allotment option or secondary market purchases. (3) If the distribution of the securities is to be on a best efforts basis and a minimum offering amount (a) is required for the issuer to achieve one or more of the purposes of the offering, provide totals for both the minimum and maximum offering amount, or
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 113 (b) is not required for the issuer to achieve any of the purposes of the offering, state the following in boldface type:
“No minimum amount of funds must be raised under this offering. This means that the issuer could complete this offering after raising only a small proportion of the offering amount set out above.”. (4) If a minimum subscription amount is required from each subscriber, provide details of the minimum subscription requirements in the table required under subsection (1). (5) If debt securities are being distributed at a premium or a discount, state in boldface type the effective yield if held to maturity. (6) Disclose separately those securities that are underwritten, those under option and those to be sold on a best efforts basis, and, in the case of a best efforts distribution, the latest date that the distribution is to remain open. (7) In column (b) of the table, disclose only commissions paid or payable in cash by the issuer or selling securityholder and discounts granted. Set out in a note to the table (a) commissions or other consideration paid or payable by persons other than the issuer or selling securityholder, (b) consideration other than discounts granted and cash paid or payable by the issuer or selling securityholder, including warrants and options, and (c) any finder’s fees or similar required payment. (8) If a security is being distributed for the account of a selling securityholder, state the name of the securityholder and a cross-reference to the applicable section in the prospectus where further information about the selling securityholder is provided. State the portion of the expenses of the distribution to be borne by the selling securityholder and, if none of the expenses of the distribution are being borne by the selling securityholder, include a statement to that effect and discuss the reason why this is the case. Price to public (a) Underwriting discounts or commission (b) Proceeds to issuer or selling securityholders (c) Per Security Total
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 114 INSTRUCTIONS (1) Estimate amounts, if necessary. For non-fixed price distributions that are being made on a best efforts basis, disclosure of the information called for by the table may be set forth as a percentage or a range of percentages and need not be set forth in tabular form. (2) If debt securities are being distributed, also express the information in the table as a percentage.
1.5. Offering price in currency other than Canadian dollar
If the offering price of the securities being distributed is disclosed in a currency other than the Canadian dollar, disclose in boldface type the currency.
1.6. Non-fixed price distributions
If the securities are being distributed at non-fixed prices, disclose (a) the discount allowed or commission payable to the underwriter, (b) any other compensation payable to the underwriter and, if applicable, that the underwriter’s compensation will be increased or decreased by the amount by which the aggregate price paid for the securities by the purchasers exceeds or is less than the gross proceeds paid by the underwriter to the issuer or selling securityholder, (c) that the securities to be distributed under the prospectus will be distributed, as applicable, at (i) prices determined by reference to the prevailing price of a specified security in a specified market, (ii) market prices prevailing at the time of sale, or (iii) prices to be negotiated with purchasers, (d) that prices may vary from purchaser to purchaser and during the period of distribution, (e) if the price of the securities is to be determined by reference to the prevailing price of a specified security in a specified market, the price of the specified security in the specified market at the latest practicable date, (f) if the price of the securities will be the market price prevailing at the time of the sale, the market price at the latest practicable date, and
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 115 (g) the net proceeds or, if the distribution is to be made on a best efforts basis, the minimum amount of net proceeds, if any, to be received by the issuer or selling securityholder.
1.7. Pricing disclosure
If the offering price or the number of securities being distributed, or an estimate of the range of the offering price or of the number of securities being distributed, has been publicly disclosed in a jurisdiction or a foreign jurisdiction as of the date of the preliminary prospectus, include this information in the preliminary prospectus.
1.8. Reduced price distributions
If an underwriter wishes to be able to decrease the price at which securities are distributed for cash from the initial offering price fixed in the prospectus, include in boldface type a cross-reference to the section in the prospectus where disclosure concerning the possible price decrease is provided.
1.9. Market for securities
(1) Identify the exchange(s) and quotation system(s), if any, on which securities of the issuer of the same class or series as the securities being distributed are traded or quoted and the market price of those securities as of the latest practicable date. (2) Disclose any intention to stabilize the market. Provide a cross-reference to the
section in the prospectus where further information about market stabilization is provided.
(3) If no market for the securities being distributed under the prospectus exists or is expected to exist upon completion of the distribution, state the following in boldface type:
“There is no market through which these securities may be sold and purchasers may not be able to resell securities purchased under this prospectus. This may affect the pricing of the securities in the secondary market, the transparency and availability of trading prices, the liquidity of the securities, and the extent of issuer regulation. See ‘Risk Factors’.” (4) If the issuer has complied with the requirements of the Regulation as an IPO venture issuer, include a statement, in substantially the following form, with bracketed information completed:
“As at the date of this prospectus, [name of issuer] does not have any of its securities listed or quoted, has not applied to list or quote any of its securities, and does not intend to apply to list or quote any of its securities, on the Toronto Stock Exchange, Aequitas NEO Exchange Inc., a U.S. marketplace, or a marketplace outside Canada and the United States of America(other than the Alternative Investment Market of the London Stock Exchange or the PLUS markets operated by PLUS Markets Group plc).”
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 116
1.10. Risk factors
Include a cross-reference to sections in the prospectus where information about the risks of an investment in the securities being distributed is provided.
1.11. Underwriter(s)
(1) State the name of each underwriter.
(2) If applicable, comply with the requirements of Regulation 33-105 respecting Underwriting Conflicts (chapter V-1.1, r. 11) for front page prospectus disclosure. (3) If an underwriter has agreed to purchase all of the securities being distributed at a specified price and the underwriter’s obligations are subject to conditions, state the following, with bracketed information completed:
“We, as principals, conditionally offer these securities, subject to prior sale, if, as and when issued by [name of issuer] and accepted by us in accordance with the conditions contained in the underwriting agreement referred to under ‘Plan of Distribution’”. (4) If an underwriter has agreed to purchase a specified number or principal amount of the securities at a specified price, state that the securities are to be taken up by the underwriter, if at all, on or before a date not later than 42 days after the date of the receipt for the final prospectus. (5) If there is no underwriter involved in the distribution, provide a statement in boldface type to the effect that no underwriter has been involved in the preparation of the prospectus or performed any review or independent due diligence of the contents of the prospectus. (6) Provide the following tabular information Underwriter’s Position Maximum size or number of securities available Exercise period or Acquisition date Exercise price or average acquisition price Over-allotment option Compensation option Any other option granted by issuer or insider of issuer to underwriter Total securities under option issuable to underwriter Other compensation securities issuable to underwriter
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 117 INSTRUCTION If the underwriter has been granted compensation securities, state, in a footnote, whether the prospectus qualifies the grant of all or part of the compensation securities and provide a cross-reference to the applicable section in the prospectus where further information about the compensation securities is provided.
1.12. Enforcement of judgments against foreign persons
If the issuer, a director of the issuer, a selling securityholder, or any other person that is signing or providing a certificate under Part 5 of the Regulation or other securities legislation, or any person for whom the issuer is required to file a consent under Part 10 of the Regulation, is incorporated, continued, or otherwise organized under the laws of a foreign jurisdiction or resides outside of Canada, state the following on the cover page or under a separate heading elsewhere in the prospectus, with the bracketed information completed:
“The [issuer, director of the issuer, selling securityholder, or other person] is incorporated, continued or otherwise organized under the laws of a foreign jurisdiction or resides outside of Canada. [the person named below] has appointed the following agent(s) for service of process:
Name of Person Name and Address of Agent
Purchasers are advised that it may not be possible for investors to enforce judgments obtained in Canada against any person that is incorporated, continued or otherwise organized under the laws of a foreign jurisdiction or resides outside of Canada, even if the party has appointed an agent for service of process.
1.13. Restricted securities
(1) Describe the number and class or classes of restricted securities being distributed using the appropriate restricted security terms in the same type face and type size as the rest of the description. (2) If the securities being distributed are restricted securities and the holders of the securities do not have the right to participate in a takeover bid made for other equity securities of the issuer, disclose that fact.
1.14. Earnings coverage
If any of the earnings coverage ratios required to be disclosed under Item 9 is less than one-to-one, disclose this fact in boldface type.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 118 Item 2 Table of Contents
2.1. Table of contents
Include a table of contents.
Item 3 Summary of Prospectus
3.1. General
(1) Briefly summarize, near the beginning of the prospectus, information appearing elsewhere in the prospectus that, in the opinion of the issuer or selling securityholder, would be most likely to influence the investor’s decision to purchase the securities being distributed, including a description of (a) the principal business of the issuer and its subsidiaries, (b) the securities to be distributed, including the offering price and expected net proceeds, (c) use of proceeds, (d) risk factors, (e) financial information, and (f) if restricted securities, subject securities or securities that are directly or indirectly convertible into or exercisable or exchangeable for restricted securities or subject securities, are to be distributed under the prospectus (i) include a summary of the information required by section 10.6, and (ii) include, in boldface type, a statement of the rights the holders of restricted securities do not have, if the holders do not have all of the rights referred to in
section 10.6.
(2) For the financial information provided under paragraph (1)(e), (a) describe the type of information appearing elsewhere in the prospectus on which the financial information is based, (b) disclose whether the information appearing elsewhere in the prospectus on which the financial information is based has been audited, (c) disclose whether the financial information has been audited, and
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 119 (d) if neither the information appearing elsewhere in the prospectus on which the financial information is based nor the financial information has been audited, prominently disclose that fact. (3) For each item summarized under subsection (1), provide a cross-reference to the information in the prospectus.
3.2. Cautionary language
At the beginning of the summary, include a statement in italics in substantially the following form:
“The following is a summary of the principal features of this distribution and should be read together with the more detailed information and financial data and statements contained elsewhere in this prospectus.” Item 4 Corporate Structure
4.1. Name, address and incorporation
(1) State the issuer’s full corporate name or, if the issuer is an unincorporated entity, the full name under which it exists and carries on business, and the address(es) of the issuer’s head and registered office. (2) State the statute under which the issuer is incorporated, continued or organized or, if the issuer is an unincorporated entity, the laws of the jurisdiction or foreign jurisdiction under which it is established and exists. (3) Describe the substance of any material amendments to the articles or other constating or establishing documents of the issuer.
4.2. Intercorporate relationships
(1) Describe, by way of a diagram or otherwise, the intercorporate relationships among the issuer and its subsidiaries. (2) For each subsidiary described in subsection (1), state (a) the percentage of votes attaching to all voting securities of the subsidiary beneficially owned, or controlled or directed, directly or indirectly, by the issuer, (b) the percentage of each class of restricted securities of the subsidiary beneficially owned, or controlled or directed, directly or indirectly, by the issuer, and (c) where the subsidiary was incorporated, continued, formed or organized.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 120 (3) If the securities distributed under the prospectus are being issued in connection with a restructuring transaction, describe by way of a diagram or otherwise these intercorporate relationships both before and after the completion of the proposed transaction. (4) A particular subsidiary may be omitted from the disclosure required by this section if, at the most recent financial year end of the issuer (a) the total assets of the subsidiary do not exceed 10% of the consolidated assets of the issuer, (b) the revenue of the subsidiary does not exceed 10% of the consolidated revenue of the issuer, and (c) the conditions in paragraphs (a) and (b) would be satisfied if (i) the subsidiaries that may be omitted under paragraphs (a) and (b) were considered in the aggregate, and (ii) the reference to 10% in those paragraphs was changed to 20%. Item 5 Describe the Business
5.1. Describe the business
(1) Describe the business of the issuer and its operating segments that are reportable segments as those terms are described in the issuer's GAAP. Disclose information for each reportable segment of the issuer in accordance with subsection 5.1(1) of Form 51- 102F2 of Regulation 51-102 respecting Continuous Disclosure Obligations. (2) Disclose the nature and results of any bankruptcy, receivership or similar proceedings against the issuer or any of its subsidiaries, or any voluntary bankruptcy, receivership or similar proceedings by the issuer or any of its subsidiaries, within the 3 most recently completed financial years or, if the issuer is a venture issuer or an IPO venture issuer, the 2 most recently completed financial years, or completed during or proposed for the current financial year. (3) Disclose the nature and results of any material restructuring transaction of the issuer or any of its subsidiaries within the 3 most recently completed financial years or, if the issuer is a venture issuer or an IPO venture issuer, the 2 most recently completed financial years, or completed during or proposed for the current financial year. (4) If the issuer has implemented social or environmental policies that are fundamental to the issuer’s operations, such as policies regarding the issuer’s relationship with the environment or with the communities in which the issuer does business, or human rights policies, describe them and the steps the issuer has taken to implement them.
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5.2. History
(1) Describe how the issuer’s business has developed over the last 3 completed financial years or, if the issuer is a venture issuer or an IPO venture issuer, the last 2 completed financial years, and any subsequent period to the date of the prospectus, including only events, such as acquisitions or dispositions, or conditions that have influenced the general development of the business. (2) If the issuer produces or distributes more than 1 product or provides more than 1 kind of service, describe the products or services. (3) Discuss changes in the issuer’s business that the issuer expects will occur during the current financial year.
5.3. Issuers with asset-backed securities outstanding
If the issuer has asset-backed securities outstanding that were distributed under a prospectus, disclose information in accordance with section 5.3 of Form 51-102F2 of Regulation 51-102 respecting Continuous Disclosure Obligations.
5.4. Issuers with mineral projects
If the issuer has a mineral project, disclose information for the issuer in accordance with section 5.4 of Form 51-102F2 of Regulation 51-102 respecting Continuous Disclosure Obligations. For the purposes of this section, the alternative disclosure permitted in Instruction (ii) to section 5.4 of Form 51-102F2 does not apply.
5.5. Issuers with oil and gas operations
(1) If the issuer is engaged in oil and gas activities as defined in Regulation 51-101 respecting Standards of Disclosure for Oil and Gas Activities (chapter V-1.1, r. 23) and any of the oil and gas information is material as contemplated under Regulation 51-101 respecting Standards of Disclosure for Oil and Gas Activities in respect of the issuer, disclose that information in accordance with Form 51-101F1 of Regulation 51-101 respecting Standards of Disclosure for Oil and Gas Activities (a) as at the end of, and for, the most recent financial year for which the prospectus includes an audited statement of financial position of the issuer, (b) in the absence of a completed financial year referred to in paragraph (a), as at the most recent date for which the prospectus includes an audited statement of financial position of the issuer, and for the most recent financial period for which the prospectus includes an audited statement of comprehensive income of the issuer, or
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 122 (c) if the issuer was not engaged in oil and gas activities at the date set out in paragraphs (a) or (b), as of a date subsequent to the date the issuer first engaged in oil and gas activities as defined in Regulation 51-101 respecting Standards of Disclosure for Oil and Gas Activities and prior to the date of the preliminary prospectus. (2) Include with the disclosure under subsection (1) a report in the form of Form 51-101F2 of Regulation 51-101 respecting Standards of Disclosure for Oil and Gas Activities, on the reserves data included in the disclosure required under subsection (1). (3) Include with the disclosure under subsection (1) a report in the form of Form 51-101F3 of Regulation 51-101 respecting Standards of Disclosure for Oil and Gas Activities that refers to the information disclosed under subsection (1). (4) To the extent not reflected in the information disclosed in response to subsection (1), disclose the information contemplated by Part 6 of Regulation 51-101 respecting Standards of Disclosure for Oil and Gas Activities in respect of material changes that occurred after the applicable statement of financial position referred to in subsection (1). INSTRUCTION Disclosure in a prospectus must be consistent with Regulation 51-101 respecting Standards of Disclosure for Oil and Gas Activities if the issuer is engaged in oil and gas activities as defined in Regulation 51-101 respecting Standards of Disclosure for Oil and Gas Activities. Item 6 Use of Proceeds
6.1. Proceeds
(1) State the estimated net proceeds to be received by the issuer or selling securityholder or, in the case of a non-fixed price distribution or a distribution to be made on a best efforts basis, the minimum amount, if any, of net proceeds to be received by the issuer or selling securityholder from the sale of the securities distributed. (2) State the particulars of any provisions or arrangements made for holding any part of the net proceeds of the distribution in trust or escrow subject to the fulfillment of conditions. (3) If the prospectus is used for a special warrant or similar transaction, state the amount that has been received by the issuer of the special warrants or similar securities on the sale of the special warrants or similar securities.
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6.2. Junior issuers
A junior issuer must disclose
(a) the total funds available, and
(b) the following breakdown of those funds:
(i) the estimated net proceeds from the sale of the securities offered under the prospectus; (ii) the estimated consolidated working capital (deficiency) as at the most recent month end before filing the prospectus; (iii) the total other funds available to be used to achieve the principal purposes identified by the junior issuer pursuant to this Item.
6.3. Principal purposes – generally
(1) Describe in reasonable detail and, if appropriate, using tabular form, each of the principal purposes, with approximate amounts, for which (a) the net proceeds will be used by the issuer, or (b) the funds available as required under section 6.2 will be used by a junior issuer. (2) If the closing of the distribution is subject to a minimum offering amount, provide disclosure of the use of proceeds for the minimum and maximum offering amounts. (3) If the following apply, disclose how the proceeds will be used by the issuer, with reference to various potential thresholds of proceeds raised, in the event that the issuer raises less than the maximum offering amount:
(a) the closing of the distribution is not subject to a minimum offering amount; (b) the distribution is to be on a best efforts basis; (c) the issuer has significant short-term non-discretionary expenditures including those for general corporate purposes, or significant short-term capital or contractual commitments, and may not have other readily accessible resources to satisfy those expenditures or commitments. (4) If the issuer is required to provide disclosure under subsection (3), the issuer must discuss, in respect of each threshold, the impact, if any, of raising each threshold amount on its liquidity, operations, capital resources and solvency.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 124 INSTRUCTIONS If the issuer is required to disclose the use of proceeds at various thresholds under subsections 6.3(3) and (4), include as an example a threshold that reflects the receipt of 15% of the offering or less.
6.4. Principal purposes – indebtedness
(1) If more than 10% of the net proceeds will be used to reduce or retire indebtedness and the indebtedness was incurred within the 2 preceding years, describe the principal purposes for which the proceeds of the indebtedness were used. (2) If the creditor is an insider, associate or affiliate of the issuer, identify the creditor and the nature of the relationship to the issuer, and disclose the outstanding amount owed.
6.5. Principal purposes – asset acquisition
(1) If more than 10% of the net proceeds are to be used to acquire assets, describe the assets. (2) If known, disclose the particulars of the purchase price being paid for or being allocated to the assets or categories of assets, including intangible assets. (3) If the vendor of the assets is an insider, associate or affiliate of the issuer, identify the vendor and the nature of the relationship to the issuer, and disclose the method used in determining the purchase price. (4) Describe the nature of the title to or interest in the assets to be acquired by the issuer. (5) If part of the consideration for the acquisition of the assets consists of securities of the issuer, give brief particulars of the class, number or amount, voting rights, if any, and other appropriate information relating to the securities, including particulars of the issuance of securities of the same class within the 2 preceding years.
6.6. Principal purposes – insiders, etc.
If an insider, associate or affiliate of the issuer will receive more than 10% of the net proceeds, identify the insider, associate or affiliate and the nature of the relationship to the issuer, and disclose the amount of net proceeds to be received.
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6.7. Principal purposes – research and development
If more than 10% of the net proceeds from the distribution will be used for research and development of products or services, describe (a) the timing and stage of research and development programs that management anticipates will be reached using such proceeds, (b) the major components of the proposed programs that will be funded using the proceeds from the distribution, including an estimate of anticipated costs, (c) if the issuer is conducting its own research and development, is subcontracting out the research and development or is using a combination of those methods, and (d) the additional steps required to reach commercial production and an estimate of costs and timing.
6.8. Business objectives and milestones
(1) State the business objectives that the issuer expects to accomplish using the net proceeds of the distribution under section 6.1, or in the case of a junior issuer, using the funds available described under section 6.2. (2) Describe each significant event that must occur for the business objectives described under subsection (1) to be accomplished and state the specific time period in which each event is expected to occur and the costs related to each event.
6.9. Unallocated funds in trust or escrow
(1) Disclose that unallocated funds will be placed in a trust or escrow account, invested or added to the working capital of the issuer. (2) Give details of the arrangements made for, and the persons responsible for, (a) the supervision of the trust or escrow account or the investment of unallocated funds, and (b) the investment policy to be followed.
6.10. Other sources of funding
If any material amounts of other funds are to be used in conjunction with the proceeds, state the amounts and sources of the other funds.
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6.11. Financing by special warrants, etc.
(1) If the prospectus is used to qualify the distribution of securities issued upon the exercise of special warrants or the exercise of other securities acquired on a prospectusexempt basis, describe the principal purposes for which the proceeds of the prospectusexempt financing were used or are to be used. (2) If all or a portion of the funds have been spent, explain how the funds were spent. Item 7 Dividends or Distributions
7.1. Dividends or distributions
(1) Disclose the amount of cash dividends or distributions declared per security for each class of the issuer’s securities for each of the 3 most recently completed financial years and its current financial year. (2) Describe any restrictions that could prevent the issuer from paying dividends or distributions. (3) Disclose the issuer’s dividend or distribution policy and any intended change in dividend or distribution policy. Item 8 Management’s Discussion and Analysis
8.1. Interpretation
(1) For the purposes of this Item, MD&A means a completed Form 51-102F1 of Regulation 51-102 respecting Continuous Disclosure Obligations or, in the case of an SEC issuer, a completed Form 51-102F1 of Regulation 51-102 respecting Continuous Disclosure Obligations or management’s discussion and analysis prepared in accordance with Item 303 of Regulation S-K under the 1934 Act. (2) For MD&A in the form of Form 51-102F1 of Regulation 51-102 respecting Continuous Disclosure Obligations, the issuer (a) must read the references to a "venture issuer" in Form 51-102F1 of Regulation 51-102 respecting Continuous Disclosure Obligations to include an IPO venture issuer, (b) must disregard (i) the Instruction to section 1.11 of Form 51-102F1 of Regulation 51-102 respecting Continuous Disclosure Obligations, and
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 127 (ii) section 1.15 of Form 51-102F1 of Regulation 51-102 respecting Continuous Disclosure Obligations, and (c) must include the disclosure required by section 1.10 of Form 51-102F1 of Regulation 51-102 respecting Continuous Disclosure Obligations in the prospectus. INSTRUCTION For the purposes of paragraph (2)(c), an issuer cannot satisfy the requirement in
section 1.10 of Form 51-102F1 of Regulation 51-102 respecting Continuous Disclosure
Obligations by incorporating by reference its fourth quarter MD&A into the prospectus.
8.2. MD&A
(1) Provide MD&A for
(a) the most recent annual financial statements of the issuer included in the prospectus under Item 32, and (b) the most recent interim financial report of the issuer included in the prospectus under Item 32. (2) If the prospectus includes the issuer's annual statements of comprehensive income, statements of changes in equity, and statements of cash flow for 3 financial years under Item 32, provide MD&A for the second most recent annual financial statements of the issuer included in the prospectus under Item 32. (3) Despite subsection (2), MD&A for the second most recent annual financial statements of the issuer included in the prospectus under Item 32 may omit disclosure regarding statement of financial position items. GUIDANCE Under section 2.2.1 of Form 51-102F1 of Regulation 51-102 respecting Continuous Disclosure Obligations, for financial years beginning on or after July 1, 2015, venture issuers, or IPO venture issuers, have the option of meeting the requirement to provide interim MD&A under section 2.2 of Form 51-102F1 by providing quarterly highlights disclosure.
8.3. (Revoked)
8.4. Disclosure of outstanding security data
(1) Disclose the designation and number or principal amount of
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 128 (a) each class and series of voting or equity securities of the issuer for which there are securities outstanding, (b) each class and series of securities of the issuer for which there are securities outstanding if the securities are convertible into, or exercisable or exchangeable for, voting or equity securities of the issuer, and (c) subject to subsection (2), each class and series of voting or equity securities of the issuer that are issuable on the conversion, exercise or exchange of outstanding securities of the issuer. (2) If the exact number or principal amount of voting or equity securities of the issuer that are issuable on the conversion, exercise or exchange of outstanding securities of the issuer is not determinable, the issuer must disclose the maximum number or principal amount of each class and series of voting or equity securities that are issuable on the conversion, exercise or exchange of outstanding securities of the issuer and, if that maximum number or principal amount is not determinable, the issuer must describe the exchange or conversion features and the manner in which the number or principal amount of voting or equity securities will be determined. (3) The disclosure under subsections (1) and (2) must be prepared as of the latest practicable date.
8.5. More recent financial information
If the issuer is required to include more recent historical financial information in the prospectus under subsection 32.6(2), the issuer is not required to update the MD&A already included in the prospectus under this Item.
8.6. Additional disclosure for venture issuers or IPO venture issuers without
significant revenue
(1) If the issuer is a venture issuer or an IPO venture issuer that has not had significant revenue from operations in either of its last 2 financial years, disclose a breakdown of material components of (a) exploration and evaluation assets or expenditures, (b) expensed research and development costs, (c) intangible assets arising from development, (d) general and administrative expenses, and (e) any material costs, whether expensed or recognized as assets, not referred to in paragraphs (a) through (d).
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 129 (2) Present the analysis of exploration and evaluation assets or expenditures required by subsection (1) on a property-by-property basis, if the issuer’s business primarily involves mining exploration and development. (3) Provide the disclosure in subsection (1) for the following periods:
(a) the 2 most recently completed financial years; and (b) if the issuer is not providing disclosure in accordance with section 2.2.1 of Form 51-102F1, the most recent year-to-date interim period and the comparative yearto-date period presented in the interim financial report included in the prospectus, if any. (4) Subsection (1) does not apply if the information required under that subsection has been disclosed in the financial statements included in the prospectus.
8.7. Additional disclosure for junior issuers
For a junior issuer that had negative cash flow from operating activities in its most recently completed financial year for which financial statements have been included in the prospectus, disclose (a) the period of time the proceeds raised under the prospectus are expected to fund operations, (b) the estimated total operating costs necessary for the issuer to achieve its stated business objectives during that period of time, and (c) the estimated amount of other material capital expenditures during that period of time. In determining cash flow from operating activities, the issuer must include cash payments related to dividends and borrowing costs.
8.8. Additional disclosure for issuers with significant equity investees
(1) An issuer that has a significant equity investee must disclose (a) summarized financial information of the equity investee, including the aggregated amounts of assets, liabilities, revenue and profit or loss, and (b) the issuer's proportionate interest in the equity investee and any contingent issuance of securities by the equity investee that might significantly affect the issuer's share of profit or loss. (2) Provide the disclosure in subsection (1) for the following periods:
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 130 (a) the 2 most recently completed financial years; (b) if the issuer is not providing disclosure in accordance with section 2.2.1 of Form 51-102F1, the most recent year-to-date interim period and the comparative yearto-date period presented in the interim financial report included in the prospectus, if any. (3) Subsection (1) does not apply if (a) the information required under that subsection has been disclosed in the financial statements included in the prospectus, or (b) the issuer includes in the prospectus separate financial statements of the equity investee for the periods referred to in subsection (2). Item 9 Earnings Coverage Ratios
9.1 Earnings coverage ratios
(1) If the securities being distributed are debt securities having a term to maturity in excess of one year or are preferred shares, disclose the following earnings coverage ratios adjusted in accordance with subsection (2):
(a) the earnings coverage ratio based on the most recent 12-month period included in the issuer's annual financial statements included in the prospectus, (b) if there has been a change in year end and the issuer's most recent financial year is less than 9 months in length, the earnings coverage calculation for its old financial year, and (c) the earnings coverage ratio based on the 12-month period ended on the last day of the most recently completed period for which an interim financial report of the issuer has been included in the prospectus. (2) Adjust the ratios referred to in subsection (1) to reflect (a) the issuance of the securities being distributed under the prospectus, based on the price at which these securities are expected to be distributed, (b) in the case of a distribution of preferred shares, (i) the issuance of all preferred shares since the date of the annual financial statements or interim financial report, and (ii) the repurchase, redemption or other retirement of all preferred shares repurchased, redeemed, or otherwise retired since the date of the annual financial
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 131 statements or interim financial report and of all preferred shares to be repurchased, redeemed, or otherwise retired from the proceeds to be realized from the sale of securities under the prospectus, (c) the issuance of all financial liabilities, as defined in accordance with the issuer's GAAP, since the date of the annual financial statements or interim financial report, and (d) the repayment, redemption or other retirement of all financial liabilities, as defined in accordance with the issuer's GAAP, since the date of the annual financial statements or interim financial report and all financial liabilities to be repaid or redeemed from the proceeds to be realized from the sale of securities distributed under the prospectus. (3) (paragraph revoked). (4) If the earnings coverage ratio is less than one-to-one, disclose in the prospectus the dollar amount of the numerator required to achieve a ratio of one-to-one. (5) If the prospectus includes a pro forma income statement, calculate the pro forma earnings coverage ratios for the periods of the pro forma income statement, and disclose them in the prospectus. INSTRUCTIONS (1) Cash flow coverage may be disclosed but only as a supplement to earnings coverage and only if the method of calculation is fully disclosed. (2) Earnings coverage is calculated by dividing an entity's profit or loss attributable to owners of the parent (the numerator) by its borrowing costs and dividend obligations (the denominator). (3) For the earnings coverage calculation (a) the numerator should be calculated using consolidated profit or loss attributable to owners of the parent before borrowing costs and income taxes; (b) imputed interest income from the proceeds of a distribution should not be added to the numerator; (c) (paragraph revoked); (d) for distributions of debt securities, the appropriate denominator is borrowing costs, after giving effect to the new debt securities issue and any retirement of obligations, plus the borrowing costs that have been capitalized during the period;
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 132 (e) for distributions of preferred shares (i) the appropriate denominator is dividends declared during the period, together with undeclared dividends on cumulative preferred shares, after giving effect to the new preferred share issue, plus the issuer's annual borrowing cost requirements, including the borrowing costs that have been capitalized during the period, less any retirement of obligations, and (ii) dividends should be grossed-up to a before-tax equivalent using the issuer's effective income tax rate; and (f) for distributions of both debt securities and preferred shares, the appropriate denominator is the same as for a preferred share issue, except that the denominator should also reflect the effect of the debt securities being offered pursuant to the prospectus. (4) The denominator represents a pro forma calculation of the aggregate of an issuer's borrowing cost obligations on all financial liabilities and dividend obligations (including both dividends declared and undeclared dividends on cumulative preferred shares) with respect to all outstanding preferred shares, as adjusted to reflect (a) the issuance of all financial liabilities and, in addition in the case of an issuance of preferred shares, all preferred shares issued, since the date of the annual financial statements or interim financial report; (b) the issuance of the securities that are to be distributed under the prospectus, based on a reasonable estimate of the price at which these securities will be distributed; and (c) the repayment or redemption of all financial liabilities since the date of the annual financial statements or interim financial report, all financial liabilities to be repaid or redeemed from the proceeds to be realized from the sale of securities under the prospectus and, in addition, in the case of an issuance of preferred shares, all preferred shares repaid or redeemed since the date of the annual financial statements or interim financial report and all preferred shares to be repaid or redeemed from the proceeds to be realized from the sale of securities under the prospectus. (5) (paragraph revoked). (6) For debt securities, disclosure of earnings coverage shall include language similar to the following, with the bracketed and bulleted information completed:
"[Name of the issuer]'s borrowing cost requirements, after giving effect to the issue of [the debt securities to be distributed under the prospectus], amounted to $-- for the 12 months ended --. [Name of the issuer]'s profit or loss attributable to owners of the parent
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 133 before borrowing costs and income tax for the 12 months then ended was $--, which is -
- times [name of the issuer]'s borrowing cost requirements for this period."
(7) For preferred share issues, disclosure of earnings coverage shall include language similar to the following, with the bracketed and bulleted information completed:
"[Name of the issuer]'s dividend requirements on all of its preferred shares, after giving effect to the issue of [the preferred shares to be distributed under the prospectus], and adjusted to a before-tax equivalent using an effective income tax rate of --%, amounted to $-- for the 12 months ended --. [Name of the issuer]'s borrowing cost requirements for the 12 months then ended amounted to $--. [Name of the issuer]'s profit or loss attributable to owners of the parent before borrowing costs and income tax for the 12 months ended -- was $--, which is -- times [name of the issuer]'s aggregate dividend and borrowing cost requirements for this period." (8) Other earnings coverage calculations may be included as supplementary disclosure to the required earnings coverage calculations outlined above as long as their derivation is disclosed and they are not given greater prominence than the required earnings coverage calculations. Item 10 Description of the Securities Distributed
10.1. Equity securities
If equity securities are being distributed, state the description or the designation of the class of the equity securities and describe all material attributes and characteristics, including (a) dividend rights, (b) voting rights, (c) rights upon dissolution or winding-up, (d) pre-emptive rights, (e) conversion or exchange rights, (f) redemption, retraction, purchase for cancellation or surrender provisions, (g) sinking or purchase fund provisions, (h) provisions permitting or restricting the issuance of additional securities and any other material restrictions, and (i) provisions requiring a securityholder to contribute additional capital.
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10.2. Debt securities
If debt securities are being distributed, describe all material attributes and characteristics of the indebtedness and the security, if any, for the debt, including (a) provisions for interest rate, maturity and premium, if any, (b) conversion or exchange rights, (c) redemption, retraction, purchase for cancellation or surrender provisions, (d) sinking or purchase fund provisions, (e) the nature and priority of any security for the debt securities, briefly identifying the principal properties subject to lien or charge, (f) provisions permitting or restricting the issuance of additional securities, the incurring of additional indebtedness and other material negative covenants, including restrictions against payment of dividends and restrictions against giving security on the assets of the issuer or its subsidiaries, and provisions as to the release or substitution of assets securing the debt securities, (g) the name of the trustee under any indenture relating to the debt securities and the nature of any material relationship between the trustee or any of its affiliates and the issuer or any of its affiliates, and (h) any financial arrangements between the issuer and any of its affiliates or among its affiliates that could affect the security for the indebtedness.
10.3. Asset-backed securities
(1) This section applies only if any asset-backed securities are being distributed under the prospectus. (2) Describe the material attributes and characteristics of the asset-backed securities, including (a) the rate of interest or stipulated yield and any premium, (b) the date for repayment of principal or return of capital and any circumstances in which payments of principal or capital may be made before such date, including any redemption or pre-payment obligations or privileges of the issuer and any events that may trigger early liquidation or amortization of the underlying pool of financial assets,
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 135 (c) provisions for the accumulation of cash flows to provide for the repayment of principal or return of capital, (d) provisions permitting or restricting the issuance of additional securities and any other material negative covenants applicable to the issuer, (e) the nature, order and priority of the entitlements of holders of asset-backed securities and any other entitled persons to receive cash flows generated from the underlying pool of financial assets, and (f) any events, covenants, standards or preconditions that may reasonably be expected to affect the timing or amount of payments or distributions to be made under the asset-backed securities, including those that are dependent or based on the economic performance of the underlying pool of financial assets. (3) Provide financial disclosure that describes the underlying pool of financial assets for (a) the 3 most recently completed financial years ended more than (i) 90 days before the date of the prospectus, or (ii) 120 days before the date of the prospectus, if the issuer is a venture issuer, (b) if the issuer has not had asset-backed securities outstanding for 3 financial years, each completed financial year ended more than (i) 90 days before the date of the prospectus, or (ii) 120 days before the date of the prospectus, if the issuer is a venture issuer, (c) a period from the date the issuer had asset-backed securities outstanding to a date not more than 90 days before the date of the prospectus if the issuer has not had asset-backed securities outstanding for at least 1 financial year. (4) For the purposes of the financial disclosure required by subsection (3), if an issuer changed its financial year end during any of the financial years referred to in subsection (3) and the transition year is less than 9 months, the transition year is not a financial year. (5) Despite subsection (4), all financial disclosure that describes the underlying pool of financial assets of the issuer for a transition year must be included in the prospectus for the most recent interim period, if any, ended
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 136 (a) subsequent to the most recent financial year refer to in paragraphs (3)(a) and (3)(b) in respect of which financial disclosure on the underlying pool of financial assets is included in the prospectus, and (b) more than (i) 45 days before the date of the prospectus, or (ii) 60 days before the date of the prospectus if the issuer is a venture issuer. (6) If the issuer files financial disclosure that describes the underlying pool of financial assets for a more recent period than required under subsection (3) or (5) before the prospectus is filed, the issuer must include that more recent financial disclosure that describes the underlying pool of financial assets in the prospectus. (7) If financial disclosure that describes the underlying pool of financial assets of the issuer is publicly disseminated by, or on behalf of, the issuer through news release or otherwise for a more recent period than required under subsection (3) or (5), the issuer must include the content of the news release or public communication in the prospectus. (8) The disclosure in subsections (3) and (5) must include a discussion and analysis of (a) the composition of the pool as at the end of the period, (b) profit and losses from the pool for the period presented on at least an annual basis or such shorter period as is reasonable given the nature of the underlying pool of assets, (c) the payment, prepayment and collection experience of the pool for the period on at least an annual basis or such shorter period as is reasonable given the nature of the underlying pool of assets, (d) servicing and other administrative fees, and (e) any significant variances experienced in the matters referred to in paragraphs (a) through (d). (9) Describe the type of financial assets, the manner in which the financial assets originated or will originate and, if applicable, the mechanism and terms of the agreement governing the transfer of the financial assets comprising the underlying pool to or through the issuer, including the consideration paid for the financial assets. (10) Describe any person who
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 137 (a) originated, sold or deposited a material portion of the financial assets comprising the pool, or has agreed to do so, (b) acts, or has agreed to act, as a trustee, custodian, bailee or agent of the issuer or any holder of the asset-backed securities, or in a similar capacity, (c) administers or services a material portion of the financial assets comprising the pool or provides administrative or managerial services to the issuer, or has agreed to do so, on a conditional basis or otherwise, if (i) finding a replacement provider of the services at a cost comparable to the cost of the current provider is not reasonably likely, (ii) a replacement provider of the services is likely to achieve materially worse results than the current provider, (iii) the current provider of the services is likely to default in its service obligations because of its current financial condition, or (iv) the disclosure is otherwise material, (d) provides a guarantee, alternative credit support or other credit enhancement to support the obligations of the issuer under the asset-backed securities or the performance of some or all of the financial assets in the pool, or has agreed to do so, or (e) lends to the issuer in order to facilitate the timely payment or repayment of amounts payable under the asset-backed securities, or has agreed to do so. (11) Describe the general business activities and material responsibilities under the asset-backed securities of a person referred to in subsection (10). (12) Describe the terms of any material relationships between (a) any of the persons referred to in subsection (10) or any of their respective affiliates, and (b) the issuer. (13) Describe any provisions relating to termination of services or responsibilities of any of the persons referred to in subsection (10) and the terms on which a replacement may be appointed. (14) Describe any risk factors associated with the asset-backed securities, including disclosure of material risks associated with changes in interest rates or prepayment levels, and any circumstances where payments on the asset-backed securities could be
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 138 impaired or disrupted as a result of any reasonably foreseeable event that may delay, divert or disrupt the cash flows dedicated to service the asset-backed securities. INSTRUCTIONS (1) Present the information required under subsections (3) through (8) in a manner that will enable a reader to easily determine whether, and the extent to which, the events, covenants, standards and preconditions referred to in paragraph (2)(f) have occurred, are being satisfied or may be satisfied. (2) If the information required under subsections (3) through (8) is not compiled specifically from the underlying pool of financial assets, but is compiled from a larger pool of the same assets from which the securitized assets are randomly selected so that the performance of the larger pool is representative of the performance of the pool of securitized assets, then an issuer may comply with subsections (3) through (8) by providing the financial disclosure required based on the larger pool and disclosing that it has done so. (3) Issuers are required to summarize contractual arrangements in plain language and may not merely restate the text of the contracts referred to. The use of diagrams to illustrate the roles of, and the relationship among, the persons referred to in subsection (10), and the contractual arrangements underlying the asset-backed securities is encouraged.
10.4. Derivatives
If derivatives are being distributed, describe fully the material attributes and characteristics of the derivatives, including (a) the calculation of the value or payment obligations under the derivatives, (b) the exercise of the derivatives, (c) settlements that are the result of the exercise of the derivatives, (d) the underlying interest of the derivatives, (e) the role of a calculation expert in connection with the derivatives, (f) the role of any credit supporter of the derivatives, and (g) the risk factors associated with the derivatives.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 139
10.5. Special warrants, etc.
If the prospectus is used to qualify the distribution of securities issued upon the exercise of special warrants or other securities acquired on a prospectus-exempt basis, provide the following disclosure in the prospectus to indicate that holders of such securities have been provided with a contractual right of rescission:
“The issuer has granted to each holder of a special warrant a contractual right of rescission of the prospectus-exempt transaction under which the special warrant was initially acquired. The contractual right of rescission provides that if a holder of a special warrant who acquires another security of the issuer on exercise of the special warrant as provided for in the prospectus is, or becomes, entitled under the securities legislation of a jurisdiction to the remedy of rescission because of the prospectus or an amendment to the prospectus containing a misrepresentation, (a) the holder is entitled to rescission of both the holder’s exercise of its special warrant and the private placement transaction under which the special warrant was initially acquired, (b) the holder is entitled in connection with the rescission to a full refund of all consideration paid to the underwriter or issuer, as the case may be, on the acquisition of the special warrant, and (c) if the holder is a permitted assignee of the interest of the original special warrant subscriber, the holder is entitled to exercise the rights of rescission and refund as if the holder was the original subscriber.” INSTRUCTION If the prospectus is qualifying the distribution of securities issued upon the exercise of securities other than special warrants, replace the term “special warrant” with the type of the security being distributed.
10.6. Restricted securities
(1) If the issuer has outstanding, or proposes to distribute under a prospectus restricted securities, subject securities or securities that are, directly or indirectly, convertible into or exercisable or exchangeable for restricted securities or subject securities, provide a detailed description of (a) the voting rights attached to the restricted securities that are the subject of the distribution or that will result from the distribution, either directly or following a conversion, exchange or exercise, and the voting rights, if any, attached to the securities of any other class of securities of the issuer that are the same as or greater than, on a per security basis, those attached to the restricted securities,
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 140 (b) any significant provisions under applicable corporate and securities law that do not apply to the holders of the restricted securities that are the subject of the distribution or that will result from the distribution, either directly or following a conversion, exchange or exercise, but do apply to the holders of another class of equity securities, and the extent of any rights provided in the constating documents or otherwise for the protection of holders of the restricted securities, (c) any rights under applicable corporate law, in the constating documents or otherwise, of holders of restricted securities that are the subject of the distribution or that will result from the distribution, either directly or following a conversion, exchange or exercise, to attend, in person or by proxy, meetings of holders of equity securities of the issuer and to speak at the meetings to the same extent that holders of equity securities are entitled, and (d) how the issuer complied with, or the basis upon which it was exempt from, the requirements of Part 12 of the Regulation. (2) If holders of restricted securities do not have all of the rights referred to in subsection (1) the detailed description referred to in that subsection must include, in boldface type, a statement of the rights the holders do not have. (3) If the issuer is required to include the disclosure referred to in subsection (1), state the percentage of the aggregate voting rights attached to the issuer’s securities that will be represented by restricted securities after effect has been given to the issuance of the securities being offered.
10.7. Other securities
If securities other than equity securities, debt securities, asset-backed securities or derivatives are being distributed, describe fully the material attributes and characteristics of those securities.
10.8. Modification of terms
(1) Describe provisions about the modification, amendment or variation of any rights attached to the securities being distributed. (2) If the rights of holders of securities may be modified otherwise than in accordance with the provisions attached to the securities or the provisions of the governing statute relating to the securities, explain briefly.
10.9. Ratings
(1) If the issuer has asked for and received a credit rating, or if the issuer is aware that it has received any other kind of rating, including a stability rating or a provisional rating,
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 141 from one or more credit rating organizations for securities of the issuer that are outstanding, or will be outstanding, and the rating or ratings continue in effect, disclose (a) each rating received from a credit rating organization; (b) for each rating disclosed under paragraph (a), the name of the credit rating organization that has assigned the rating; (c) a definition or description of the category in which each credit rating organization rated the securities and the relative rank of each rating within the organization’s overall classification system; (d) an explanation of what the rating addresses and what attributes, if any, of the securities are not addressed by the rating; (e) any factors or considerations identified by the credit rating organization as giving rise to unusual risks associated with the securities; (f) a statement that a credit rating or a stability rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the credit rating organization; and (g) any announcement made by, or any proposed announcement known to the issuer that is to be made by, a credit rating organization to the effect that the organization is reviewing or intends to revise or withdraw a rating previously assigned and required to be disclosed under this section. (2) If payments were, or reasonably will be, made to a credit rating organization that provided a rating described in subsection (1), state that fact and state whether any payments were made to the credit rating organization in respect of any other service provided to the issuer by the credit rating organization during the last 2 years. INSTRUCTIONS There may be factors relating to a security that are not addressed by a credit rating organization when they give a rating. For example, in the case of cash settled derivative instruments, factors in addition to the creditworthiness of the issuer, such as the continued subsistence of the underlying interest or the volatility of the price, value or level of the underlying interest may be reflected in the rating analysis. Rather than being addressed in the rating itself, these factors may be described by a credit rating organization by way of a superscript or other notation to a rating. Any such attributes must be discussed in the disclosure under this section. A provisional rating received before the issuer’s most recently completed financial year is not required to be disclosed under this section.
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10.10 Other attributes
(1) If the rights attaching to the securities being distributed are materially limited or qualified by the rights of any other class of securities, or if any other class of securities ranks ahead of or equally with the securities being distributed, include information about the other securities that will enable investors to understand the rights attaching to the securities being distributed. (2) If securities of the class being distributed may be partially redeemed or repurchased, state the manner of selecting the securities to be redeemed or repurchased. INSTRUCTION This section requires only a brief summary of the provisions that are material from an investment standpoint. The provisions attaching to the securities being distributed or any other class of securities do not need to be set out in full. They may, in the issuer’s discretion, be attached as a schedule to the prospectus. Item 11 Consolidated Capitalization
11.1. Consolidated capitalization
Describe any material change in, and the effect of the material change on, the share and loan capital of the issuer, on a consolidated basis, since the date of the issuer’s financial statements for its most recently completed financial period included in the prospectus, including any material change that will result from the issuance of the securities being distributed under the prospectus. Item 12 Options to Purchase Securities
12.1. Options to purchase securities
(1) For an issuer that is not a reporting issuer in any jurisdiction immediately before filing the prospectus, state, in tabular form, as at a specified date within 30 days before the date of the prospectus, information about options to purchase securities of the issuer, or a subsidiary of the issuer, that are held or will be held upon completion of the distribution by (a) all executive officers and past executive officers of the issuer, as a group, and all directors and past directors of the issuer who are not also executive officers, as a group, indicating the aggregate number of executive officers and the aggregate number of directors to whom the information applies, (b) all executive officers and past executive officers of all subsidiaries of the issuer, as a group, and all directors and past directors of those subsidiaries who are not also executive officers of the subsidiary, as a group, excluding, in each case, individuals
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 143 referred to in paragraph (a), indicating the aggregate number of executive officers and the aggregate number of directors to whom the information applies, (c) all other employees and past employees of the issuer as a group, (d) all other employees and past employees of subsidiaries of the issuer as a group, (e) all consultants of the issuer as a group, and (f) any other person, other than the underwriter(s), naming each person. (2) Describe any material change to the information required to be included in the prospectus under subsection (1) to the date of the prospectus. INSTRUCTIONS (1) Describe the options, warrants, or other similar securities stating the material provisions of each class or type of option, including:
(a) the designation and number of the securities under option; (b) the purchase price of the securities under option or the formula by which the purchase price will be determined, and the expiration dates of the options; (c) if reasonably ascertainable, the market value of the securities under option on the date of grant; (d) if reasonably ascertainable, the market value of the securities under option on the specified date; and (e) with respect to options referred to in paragraph (1)(f), the particulars of the grant including the consideration for the grant. (2) For the purposes of paragraph (1)(f), provide the information required for all options except warrants and special warrants. Item 13 Prior Sales
13.1. Prior sales
For each class or series of securities of the issuer distributed under the prospectus and for securities that are convertible or exchangeable into those classes or series of securities, state, for the 12-month period before the date of the prospectus,
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 144 (a) the price at which the securities have been issued or are to be issued by the issuer or sold by the selling securityholder, (b) the number of securities issued or sold at that price, and (c) the date on which the securities were issued or sold.
13.2. Trading price and volume
(1) For the following securities of the issuer that are traded or quoted on a Canadian marketplace, identify the marketplace and the price ranges and volume traded or quoted on the Canadian marketplace on which the greatest volume of trading or quotation for the securities generally occurs; (a) each class or series of securities of the issuer distributed under the prospectus; (b) securities of the issuer into which those classes or series of securities are convertible or exchangeable. (2) For the following securities of the issuer that are not traded or quoted on a Canadian marketplace but are traded or quoted on a foreign marketplace, identify the foreign marketplace and the price ranges and volume traded or quoted on the foreign marketplace on which the greatest volume or quotation for the securities generally occurs; (a) each class or series of securities of the issuer distributed under the prospectus; (b) securities of the issuer into which those classes or series of securities are convertible or exchangeable. (3) Provide the information required under subsections (1) and (2) on a monthly basis for each month or, if applicable, partial months of the 12-month period before the date of the prospectus. Item 14 Escrowed Securities and Securities Subject to Contractual Restriction on Transfer
14.1. Escrowed securities and securities subject to contractual restriction on
transfer
(1) State as of a specified date within 30 days before the date of the prospectus, in substantially the following tabular form, the number of securities of each class of securities of the issuer held, to the knowledge of the issuer, in escrow or that are subject to a contractual restriction on transfer and the percentage that number represents of the outstanding securities of that class.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 145 ESCROWED SECURITIES AND SECURITIES SUBJECT TO CONTRACTUAL RESTRICTION ON TRANSFER Designation of class Number of securities held in escrow or that are subject to a contractual restriction on transfer Percentage of class (2) In a note to the table disclose the name of the depository, if any, and the date of and conditions governing the release of the securities from escrow or the date the contractual restriction on transfer ends, as applicable. (3) Describe any material change to the information required to be included in the prospectus under subsection (1) to the date of the prospectus. INSTRUCTIONS (1) For purposes of this section, escrow includes securities subject to a pooling agreement. (2) For the purposes of this section, securities subject to contractual restrictions on transfer as a result of pledges made to lenders are not required to be disclosed. Item 15 Principal Securityholders and Selling Securityholders
15.1. Principal securityholders and selling securityholders
(1) Provide the following information for each principal securityholder of the issuer and, if any securities are being distributed for the account of a securityholder, for each selling securityholder:
(a) the name;
(b) the number or amount of securities owned, controlled or directed of the class being distributed; (c) the number or amount of securities of the class being distributed for the account of the securityholder; (d) the number or amount of securities of the issuer of any class to be owned, controlled or directed after the distribution, and the percentage that number or amount represents of the total outstanding; (e) whether the securities referred to in paragraph (b), (c) or (d) are owned both of record and beneficially, of record only, or beneficially only.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 146 (2) If securities are being distributed in connection with a restructuring transaction, indicate, to the extent known, the holdings of each person described in paragraph (1)(a) that will exist after effect has been given to the transaction. (3) If any of the securities being distributed are being distributed for the account of a securityholder and those securities were purchased by the selling securityholder within the 2 years preceding the date of the prospectus, state the date the selling securityholder acquired the securities and, if the securities were acquired in the 12 months preceding the date of the prospectus, the cost to the securityholder in the aggregate and on an average cost-per-security basis. (4) If, to the knowledge of the issuer or the underwriter of the securities being distributed, more than 10% of any class of voting securities of the issuer is held, or is to be held, subject to any voting trust or other similar agreement, disclose, to the extent known, the designation of the securities, the number or amount of the securities held or to be held subject to the agreement and the duration of the agreement. State the names and addresses of the voting trustees and outline briefly their voting rights and other powers under the agreement. (5) If, to the knowledge of the issuer or the underwriter of the securities being distributed, any principal securityholder or selling securityholder is an associate or affiliate of another person named as a principal securityholder, disclose, to the extent known, the material facts of the relationship, including any basis for influence over the issuer held by the person other than the holding of voting securities of the issuer. (6) In addition to the above, include in a footnote to the table the required calculation(s) on a fully-diluted basis. (7) Describe any material change to the information required to be included in the prospectus under subsection (1) to the date of the prospectus. INSTRUCTION If a company, partnership, trust or other unincorporated entity is a principal securityholder of an issuer, disclose, to the extent known, the name of each individual who, through ownership of or control or direction over the securities of that company, trust or other unincorporated entity, or membership in the partnership, as the case may be, is a principal securityholder of that entity.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 147 Item 16 Directors and Executive Officers
16.1. Name, occupation and security holding
(1) Provide information for directors and executive officers of the issuer in accordance with section 10.1 of Form 51-102F2 of Regulation 51-102 respecting Continuous Disclosure Obligations as at the date of the prospectus. (2) If information similar to the information required under subsection (1) is provided for any director or executive officer, who is not serving in such capacity as at the date of the prospectus, clearly indicate this fact and explain whether the issuer believes that this director or executive officer is liable under the prospectus.
16.2. Cease trade orders, bankruptcies, penalties or sanctions
Provide information for directors and executive officers of the issuer in accordance with section 10.2 of Form 51-102F2 of Regulation 51-102 respecting Continuous Disclosure Obligations as if the references in that section to "date of the AIF" read "date of the prospectus".
16.3. Conflicts of interest
Disclose particulars of existing or potential material conflicts of interest between the issuer or a subsidiary of the issuer and a director or officer of the issuer or of a subsidiary of the issuer.
16.4. Management of junior issuers
A junior issuer must provide the following information for each member of management:
(a) state the individual’s name, age, position and responsibilities with the issuer and relevant educational background; (b) state whether the individual works full time for the issuer or what proportion of the individual’s time will be devoted to the issuer; (c) state whether the individual is an employee or independent contractor of the issuer; (d) state the individual’s principal occupations or employment during the 5 years before the date of the prospectus, disclosing with respect to each organization as of the time such occupation or employment was carried on:
(i) its name and principal business;
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 148 (ii) if applicable, that the organization was an affiliate of the issuer; (iii) positions held by the individual; and (iv) whether it is still carrying on business, if known to the individual; (e) describe the individual’s experience in the issuer’s industry; (f) state whether the individual has entered into a non-competition or nondisclosure agreement with the issuer. INSTRUCTION For purposes of this section, “management” means all directors, officers, employees and contractors whose expertise is critical to the issuer, its subsidiaries and proposed subsidiaries in providing the issuer with a reasonable opportunity to achieve its stated business objectives. Item 17 Executive Compensation
17.1. Disclosure
Include in the prospectus a Statement of Executive Compensation prepared in accordance with Form 51-102F6 or, if the issuer is a venture issuer or an IPO venture issuer, in accordance with Form 51-102F6 or Form 51-102F6V of Regulation 51-102 respecting Continuous Disclosure Obligations and describe any intention to make any material changes to that compensation. Item 18 Indebtedness of Directors and Executive Officers
18.1. Aggregate indebtedness
Provide information for the issuer in accordance with section 10.1 of Form 51-102F5 of Regulation 51-102 respecting Continuous Disclosure Obligations as if the reference in that section to "date of the information circular" read "date of the prospectus ".
18.2. Indebtedness of directors and executive officers under securities purchase
and other programs
(1) Provide information for the issuer in accordance with section 10.2 of Form 51-102F5 of Regulation 51-102 respecting Continuous Disclosure Obligations as if the reference in this section to “date of the information circular” read “date of the prospectus”. (2) Do not disclose the information required under subsection (1) for
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 149 (a) any indebtedness that has been entirely repaid on or before the date of the prospectus, or (b) routine indebtedness (as defined in paragraph 10.3(c) of Form 51-102F5 of Regulation 51-102 respecting Continuous Disclosure Obligations as if reference in this paragraph to "the company" read "the issuer"). Item 19 Audit Committees and Corporate Governance
19.1. Audit committees
(1) Include in the prospectus the disclosure for the issuer in accordance with Form 52- 110F1 of Regulation 52-110 respecting Audit Committees (chapter V-1.1, r. 28), as applicable, if the issuer is neither a venture issuer nor an IPO venture issuer. (2) Include in the prospectus the disclosure for the issuer in accordance with Form 52- 110F2 of Regulation 52-110 respecting Audit Committees, as applicable, if the issuer is a venture issuer or an IPO venture issuer.
19.2. Corporate governance
(1) Include in the prospectus the disclosure in accordance with Form 58-101F1 of Regulation 58-101 respecting Disclosure of Corporate Governance Practices (chapter V1.1, r. 32), as applicable, if the issuer is neither a venture issuer nor an IPO venture issuer. (2) Include in the prospectus the disclosure in accordance with Form 58-101F2 of Regulation 58-101 respecting Disclosure of Corporate Governance Practices, as applicable, if the issuer is a venture issuer or an IPO venture issuer. Item 20 Plan of Distribution
20.1. Name of underwriters
(1) If the securities are being distributed by an underwriter, state the name of the underwriter and describe briefly the nature of the underwriter’s obligation to take up and pay for the securities. (2) Disclose the date by which the underwriter is obligated to purchase the securities.
20.2. Disclosure of conditions to underwriters’ obligations
If securities are distributed by an underwriter that has agreed to purchase all of the securities at a specified price and the underwriter’s obligations are subject to conditions,
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 150 (a) include a statement in substantially the following form, with the bracketed information completed and with modifications necessary to reflect the terms of the distribution:
“Under an agreement dated [insert date of agreement] between [insert name of issuer or selling securityholder] and [insert name(s) of underwriter(s)], as underwriter[s], [insert name of issuer or selling security shareholder] has agreed to sell and the underwriter[s] [has/have] agreed to purchase on [insert closing date] the securities at a price of [insert offering price], payable in cash to [insert name of issuer or selling securityholder] against delivery. The obligations of the underwriter[s] under the agreement may be terminated at [its/their] discretion on the basis of [describe any “market out”, “disaster out”, “material change out” or similar provision] and may also be terminated upon the occurrence of certain stated events. The underwriter[s] [is/are], however, obligated to take up and pay for all of the securities if any of the securities are purchased under the agreement.”, and (b) describe any other conditions and indicate any information known that is relevant to whether such conditions will be satisfied.
20.3. Best efforts offering
Outline briefly the plan of distribution of any securities being distributed other than on the basis described in section 20.2.
20.4. Minimum distribution
If securities are being distributed on a best efforts basis and minimum funds are to be raised, state (a) the minimum funds to be raised, (b) that the issuer must appoint a registered dealer authorized to make the distribution, a Canadian financial institution, or a lawyer who is a practicing member in good standing with a law society of a jurisdiction in which the securities are being distributed, or a notary in Québec, to hold in trust all funds received from subscriptions until the minimum amount of funds stipulated in paragraph (a) has been raised, and (c) that if the minimum amount of funds is not raised within the distribution period, the trustee must return the funds to the subscribers without any deductions.
20.5. Determination of price
Disclose the method by which the distribution price has been or will be determined and, if estimates have been provided, explain the process of determining the estimates.
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20.6. Stabilization
If the issuer, a selling securityholder or an underwriter knows or has reason to believe that there is an intention to over-allot or that the price of any security may be stabilized to facilitate the distribution of the securities, describe the nature of these transactions, including the anticipated size of any over-allocation position, and explain how the transactions are expected to affect the price of the securities.
20.7. Approvals
If the proceeds of the distribution will be used to substantially fund a material undertaking that would constitute a material departure from the business or operations of the issuer and the issuer has not obtained all material licences, registrations and approvals necessary for the stated principal use of proceeds, include a statement that (a) the issuer will appoint a registered dealer authorized to make the distribution, a Canadian financial institution, or a lawyer who is a practicing member in good standing with a law society of a jurisdiction in which the securities are being distributed, or a notary in Québec, to hold in trust all funds received from subscriptions until all material licences, registrations and approvals necessary for the stated principal use of proceeds have been obtained, and (b) if all material licences, registrations and approvals necessary for the operation of the material undertaking have not been obtained within 90 days from the date of receipt of the final prospectus, the trustee will return the funds to subscribers.
20.8. Reduced price distributions
If the underwriter may decrease the offering price after the underwriter has made a reasonable effort to sell all of the securities at the initial offering price disclosed in the prospectus in accordance with the procedures permitted by the Regulation, disclose this fact and that the compensation realised by the underwriter will be decreased by the amount that the aggregate price paid by purchasers for the securities is less than the gross proceeds paid by the underwriter to the issuer or selling securityholder.
20.9. Listing application
If application has been made to list or quote the securities being distributed, include a statement, in substantially the following form, with bracketed information completed:
“The issuer has applied to [list/quote] the securities distributed under this prospectus on [name of exchange or other market]. [Listing/Quotation] will be subject to the issuer fulfilling all the listing requirements of [name of exchange or other market].”
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 152
20.10. Conditional listing approval
If application has been made to list or quote the securities being distributed on an exchange or marketplace and conditional listing approval has been received, include a statement, in substantially the following form, with the bracketed information completed:
“[name of exchange or marketplace] has conditionally approved the [listing/quotation] of these securities. [Listing/Quotation] is subject to the [name of issuer]’s fulfilling all of the requirements of the [name of exchange or marketplace] on or before [date], [including distribution of these securities to a minimum number of public securityholders].”
20.11. IPO venture issuers
If the issuer has complied with the requirements of the Regulation as an IPO venture issuer, include a statement, in substantially the following form, with bracketed information completed:
“As at the date of the prospectus, [name of issuer] does not have any of its securities listed or quoted, has not applied to list or quote any of its securities, and does not intend to apply to list or quote any of its securities, on the Toronto Stock Exchange, Aequitas NEO Exchange Inc., a U.S. marketplace, or a marketplace outside of Canada and the United States of America (other than the Alternative Investment Market of the London Stock Exchange or the PLUS markets operated by PLUS Markets Group plc)”
20.12. Constraints
If there are constraints imposed on the ownership of securities of the issuer to ensure that the issuer has a required level of Canadian ownership, describe the mechanism, if any, by which the level of Canadian ownership of the securities of the issuer will be monitored and maintained.
20.13. Special warrants acquired by underwriters or agents
Disclose the number and dollar value of any special warrants acquired by any underwriter or agent and the percentage of the distribution represented by those special warrants. Item 21 Risk Factors
21.1. Risk factors
(1) Disclose risk factors relating to the issuer and its business, such as cash flow and liquidity problems, if any, experience of management, the general risks inherent in the business carried on by the issuer, environmental and health risks, reliance on key personnel, regulatory constraints, economic or political conditions and financial history
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 153 and any other matter that would be likely to influence an investor’s decision to purchase securities of the issuer. (2) If there is a risk that securityholders of the issuer may become liable to make an additional contribution beyond the price of the security, disclose that risk. (3) Describe any risk factors material to the issuer that a reasonable investor would consider relevant to an investment in the securities being distributed and that are not otherwise described under subsection (1) or (2). INSTRUCTIONS (1) Disclose risks in the order of seriousness from the most serious to the least serious. (2) A risk factor must not be de-emphasized by including excessive caveats or conditions. Item 22 Promoters
22.1. Promoters
(1) For a person that is, or has been within the 2 years immediately preceding the date of the prospectus, a promoter of the issuer or subsidiary of the issuer, state (a) the person’s name, (b) the number and percentage of each class of voting securities and equity securities of the issuer or any of its subsidiaries beneficially owned, or controlled or directed, directly or indirectly, by the person, (c) the nature and amount of anything of value, including money, property, contracts, options or rights of any kind received or to be received by the promoter directly or indirectly from the issuer or from a subsidiary of the issuer, and the nature and amount of any assets, services or other consideration received or to be received by the issuer or a subsidiary of the issuer in return, and (d) for an asset acquired within the 2 years before the date of the preliminary prospectus, or to be acquired, by the issuer or by a subsidiary of the issuer from a promoter, (i) the consideration paid or to be paid for the asset and the method by which the consideration has been or will be determined,
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 154 (ii) the person making the determination referred to in subparagraph (i) and the person’s relationship with the issuer or the promoter, or an affiliate of the issuer or the promoter, and (iii) the date that the asset was acquired by the promoter and the cost of the asset to the promoter. (2) If a promoter referred to in subsection (1) is, as at the date of the preliminary prospectus, or was within 10 years before the date of the preliminary prospectus, a director, chief executive officer, or chief financial officer of any person, that (a) was subject to an order that was issued while the promoter was acting in the capacity as director, chief executive officer or chief financial officer, or (b) was subject to an order that was issued after the promoter ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while the promoter was acting in the capacity as director, chief executive officer or chief financial officer, state the fact and describe the basis on which the order was made and whether the order is still in effect. (3) For the purposes of subsection (2), “order” means any of the following, if in effect for a period of more than 30 consecutive days:
(a) a cease trade order,
(b) an order similar to a cease trade order, or (c) an order that denied the relevant person access to any exemption under securities legislation. (4) If a promoter referred to in subsection (1) (a) is, as at the date of the preliminary prospectus, or has been within the 10 years before the date of the preliminary prospectus, a director or executive officer of any person that, while the promoter was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets, state the fact, or (b) has, within the 10 years before the date of the preliminary prospectus, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the promoter, state the fact.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 155 (5) Describe the penalties or sanctions imposed and the grounds on which they were imposed or the terms of the settlement agreement and the circumstances that gave rise to the settlement agreement, if a promoter referred to in subsection (1) has been subject to (a) any penalties or sanctions imposed by a court relating to provincial and territorial securities legislation or by a provincial and territorial securities regulatory authority or has entered into a settlement agreement with a provincial and territorial securities regulatory authority, or (b) any other penalties or sanctions imposed by a court or regulatory body that would be likely to be considered important to a reasonable investor in making an investment decision. (6) Despite subsection (5), no disclosure is required of a settlement agreement entered into before December 31, 2000 unless the disclosure would likely be considered important to a reasonable investor in making an investment decision. INSTRUCTIONS (1) The disclosure required by subsections (2), (4) and (5) also applies to any personal holding companies of any of the persons referred to in subsections (2), (4), and (5). (2) A management cease trade order which applies to a promoter referred to in subsection (1) is an “order” for the purposes of paragraph (2)(a) and must be disclosed, whether or not the director, chief executive officer or chief financial officer was named in the order. (3) For the purposes of this section, a late filing fee, such as a filing fee that applies to the late filing of an insider report, is not a “penalty or sanction”. (4) The disclosure in paragraph (2)(a) only applies if the promoter was a director, chief executive officer or chief financial officer when the order was issued against the person. The issuer does not have to provide disclosure if the promoter became a director, chief executive officer or chief financial officer after the order was issued. Item 23 Legal Proceedings and Regulatory Actions
23.1. Legal proceedings
(1) Describe any legal proceedings the issuer is or was a party to, or that any of its property is or was the subject of, since the beginning of the most recently completed financial year for which financial statements of the issuer are included in the prospectus. (2) Describe any such legal proceedings the issuer knows to be contemplated.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 156 (3) For each proceeding described in subsections (1) and (2), include the name of the court or agency, the date instituted, the principal parties to the proceeding, the nature of the claim, the amount claimed, if any, whether the proceeding is being contested, and the present status of the proceeding. INSTRUCTION Information with respect to any proceeding that involves a claim for damages if the amount involved, exclusive of interest and costs, does not exceed 10% of the current assets of the issuer may be omitted. However, if any proceeding presents in large degree the same legal and factual issues as other proceedings pending or known to be contemplated, include the amount involved in the other proceedings in computing the percentage.
23.2. Regulatory actions
Describe any
(a) penalties or sanctions imposed against the issuer by a court relating to provincial and territorial securities legislation or by a securities regulatory authority within the 3 years immediately preceding the date of the prospectus, (b) any other penalties or sanctions imposed by a court or regulatory body against the issuer necessary for the prospectus to contain full, true and plain disclosure of all material facts relating to the securities being distributed, and (c) settlement agreements the issuer entered into before a court relating to provincial and territorial securities legislation or with a securities regulatory authority within the 3 years immediately preceding the date of the prospectus. Item 24 Interests of Management and Others in Material Transactions
24.1 Interests of management and others in material transactions
Provide information for the issuer for this section in accordance with section 13.1 of Form 51-102F2 of Regulation 51-102 respecting Continuous Disclosure Obligations as if the reference in that section to “within the 3 most recently completed financial years or during the current financial year that has materially affected or is reasonably expected to materially affect your company” read “within the 3 years before the date of the prospectus that has materially affected or is reasonably expected to materially affect the issuer or a subsidiary of the issuer”.
24.2. Underwriting discounts
Disclose any material underwriting discounts or commissions upon the sale of securities by the issuer if any of the persons listed in section 13.1 of Form 51-102F2 of
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 157 Regulation 51-102 respecting Continuous Disclosure Obligations were or are to be an underwriter or are associates, affiliates or partners of a person that was or is to be an underwriter. Item 25 Relationship Between Issuer or Selling Securityholder and Underwriter
25.1. Relationship between issuer or selling securityholder and underwriter
(1) If the issuer or selling securityholder is a connected issuer or related issuer of an underwriter of the distribution, or if the issuer or selling securityholder is also an underwriter of the distribution, comply with the requirements of Regulation 33-105 respecting Underwriting Conflicts. (2) For the purposes of subsection (1), “connected issuer” and “related issuer” have the same meanings as in Regulation 33-105 respecting Underwriting Conflicts. Item 26 Auditors, Transfer Agents and Registrars
26.1. Auditors
State the name and address of the auditor of the issuer.
26.1.1. Auditor that was not a participating audit firm
(1) If the auditor referred to in section 26.1 was not a participating audit firm, as defined in Regulation 52-108 respecting Auditor Oversight (chapter V-1.1, r. 26.1), as at the date of the most recent auditor’s report on financial statements included in the prospectus, include a statement in substantially the following form:
“[Audit Firm A] audited the financial statements of [Entity B] for the year ended [state the period of the most recent financial statements included in the prospectus] and issued an auditor's report dated [state the date of the auditor’s report for the relevant financial statements]. As at [state the date of the auditor’s report for the relevant financial statements], [Audit Firm A] was not required by securities legislation to enter, and had not entered, into a participation agreement with the Canadian Public Accountability Board. An audit firm that enters into a participation agreement is subject to the oversight program of the Canadian Public Accountability Board.”. (2) If an auditor of the financial statements required by Item 32 was not a participating audit firm, as defined in Regulation 52-108 respecting Auditor Oversight, as at the date of the most recent auditor’s report issued by that auditor on financial statements included in the prospectus, include a statement in substantially the following form:
“[Audit Firm C] audited the financial statements of [Entity D] for the year ended [state the period of the most recent financial statements, if any, included in the prospectus
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 158 under Item 32] and issued an auditor's report dated [state the date of the auditor’s report for the relevant financial statements]. As at [state the date of the auditor’s report for the relevant financial statements], [Audit Firm C] was not required by securities legislation to enter, and had not entered, into a participation agreement with the Canadian Public Accountability Board. An audit firm that enters into a participation agreement is subject to the oversight program of the Canadian Public Accountability Board.”.
26.2. Transfer agents, registrars, trustees or other agents
For each class of securities, state the name of any transfer agent, registrar, trustee, or other agent appointed by the issuer to maintain the securities register and the register of transfers for such securities and indicate the location (by municipality) of each of the offices of the issuer or transfer agent, registrar, trustee or other agent where the securities register and register of transfers are maintained or transfers of securities are recorded. Item 27 Material Contracts
27.1. Material contracts
Give particulars of any material contract
(a) required to be filed under section 9.3 of the Regulation, or (b) that would be required to be filed under section 9.3 of the Regulation but for the fact that it was previously filed. INSTRUCTIONS (1) Set out a complete list of all contracts for which particulars must be given under this section, indicating those that are disclosed elsewhere in the prospectus. Particulars need only be provided for those contracts that do not have the particulars given elsewhere in the prospectus. (2) Particulars of contracts must include the dates of, parties to, consideration provided for in, and general nature and key terms of, the contracts. Item 28 Experts
28.1. Names of experts
Name each person
(a) who is named as having prepared or certified a report, valuation, statement or opinion in the prospectus or an amendment to the prospectus, and
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 159 (b) whose profession or business gives authority to the report, valuation, statement or opinion made by the person.
28.2. Interest of experts
For each person referred to in section 28.1, provide the disclosure in accordance with section 16.2 of Form 51-102F2 of Regulation 51-102 respecting Continuous Disclosure Obligations, as of the date of the prospectus, as if that person were a person referred to in section 16.1 of Form 51-102F2 of Regulation 51-102 respecting Continuous Disclosure Obligations. Item 29 Other Material Facts
29.1. Other material facts
Give particulars of any material facts about the securities being distributed that are not disclosed under any other Items and are necessary in order for the prospectus to contain full, true and plain disclosure of all material facts relating to the securities to be distributed. Item 30 Rights of Withdrawal and Rescission
30.1. General
Include a statement in substantially the following form, with the bracketed information completed:
“Securities legislation in [certain of the provinces [and territories] of Canada/the Province of [insert name of local jurisdiction, if applicable]] provides purchasers with the right to withdraw from an agreement to purchase securities. This right may be exercised within 2 business days after receipt or deemed receipt of a prospectus and any amendment. [In several of the provinces/provinces and territories,] [T/t]he securities legislation further provides a purchaser with remedies for rescission [or[, in some jurisdictions,] revisions of the price or damages] if the prospectus and any amendment contains a misrepresentation or is not delivered to the purchaser, provided that the remedies for rescission[, revisions of the price or damages] are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province [or territory]. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province [or territory] for the particulars of these rights or consult with a legal adviser.”
30.2. Non-fixed price offerings
In the case of a non-fixed price offering, replace, if applicable in the jurisdiction in which the prospectus is filed, the second sentence in the legend in section 30.1 with a statement in substantially the following form:
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 160 “This right may only be exercised within 2 business days after receipt or deemed receipt of a prospectus and any amendment, irrespective of the determination at a later date of the purchase price of the securities distributed.”
30.3. Convertible, exchangeable or exercisable securities
In the case of an offering of convertible, exchangeable or exercisable securities in which additional amounts are payable or may become payable upon conversion, exchange or exercise, provide a statement in the following form:
“In an offering of [state name of convertible, exchangeable or exercisable securities], investors are cautioned that the statutory right of action for damages for a misrepresentation contained in the prospectus is limited, in certain provincial [and territorial] securities legislation, to the price at which the [state name of convertible, exchangeable or exercisable securities] is offered to the public under the prospectus offering. This means that, under the securities legislation of certain provinces [and territories], if the purchaser pays additional amounts upon [conversion, exchange or exercise] of the security, those amounts may not be recoverable under the statutory right of action for damages that applies in those provinces [and territories]. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province [or territory] for the particulars of this right of action for damages or consult with a legal adviser.”. Item 31 List of Exemptions from Regulation
31.1. List of exemptions from Regulation
List all exemptions from the provisions of the Regulation, including this Form, granted to the issuer applicable to the distribution or the prospectus, including all exemptions to be evidenced by the issuance of a receipt for the prospectus pursuant to
section 19.3 of the Regulation.
Item 32 Financial Statement Disclosure for Issuers
32.1. Interpretation of “issuer”
(1) The financial statements of an issuer required under this Item to be included in a prospectus must include (a) the financial statements of any predecessor entity that formed, or will form, the basis of the business of the issuer, even though the predecessor entity is, or may have been, a different legal entity, if the issuer has not existed for 3 years, (b) the financial statements of a business or businesses acquired by the issuer within 3 years before the date of the prospectus or proposed to be acquired, if a
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 161 reasonable investor reading the prospectus would regard the primary business of the issuer to be the business or businesses acquired, or proposed to be acquired, by the issuer, and (c) the restated combined financial statements of the issuer and any other entity with which the issuer completed a transaction within 3 years before the date of the prospectus or proposes to complete a transaction, if the issuer accounted for or will account for the transaction as a combination in which all of the combining entities or businesses ultimately are controlled by the same party or parties both before and after the combination, and that control is not temporary. (2) An issuer is not required to include the financial statements for an acquisition to which paragraph (1)(a) or (b) applies if (a) the issuer was a reporting issuer in any jurisdiction of Canada (i) on the date of the acquisition, in the case of a completed acquisition; or (ii) immediately before the filing of the prospectus, in the case of a proposed acquisition; (b) the issuer’s principal asset before the acquisition is not cash, cash equivalents, or its exchange listing; and (c) the issuer provides disclosure in respect of the proposed or completed acquisition in accordance with Item 35.
32.2. Annual financial statements
(1) Subject to section 32.4, include annual financial statements of the issuer consisting of (a) a statement of comprehensive income, a statement of changes in equity, and a statement of cash flows for each of the 3 most recently completed financial years ended more than (i) 90 days before the date of the prospectus, or (ii) 120 days before the date of the prospectus, if the issuer is a venture issuer, (b) a statement of financial position as at the end of the 2 most recently completed financial years described in paragraph (a),
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 162 (c) a statement of financial position as at the beginning of the earliest comparative period for which financial statements that are included in the prospectus comply with IFRS in the case of an issuer that (i) discloses in its annual financial statements an unreserved statement of compliance with IFRS, and (ii) does any of the following (A) applies an accounting policy retrospectively in its annual financial statements, (B) makes a retrospective restatement of items in its annual financial statements, or (C) reclassifies items in its annual financial statements, (d) in the case of an issuer's first IFRS financial statements, the opening IFRS statement of financial position at the date of transition to IFRS, and (e) notes to the annual financial statements. (1.1) If an issuer presents the components of profit or loss in a separate income statement, the separate income statement must be displayed immediately before the statement of comprehensive income filed under subsection (1). (2) If the issuer has not completed 3 financial years, include the financial statements described under subsection (1) for each completed financial year ended more than (a) 90 days before the date of the prospectus, or (b) 120 days before the date of the prospectus, if the issuer is a venture issuer. (3) If the issuer has not included in the prospectus financial statements for a completed financial year, include the financial statements described under subsection (1) or (2) for a period from the date the issuer was formed to a date not more than 90 days before the date of the prospectus. (4) If an issuer changed its financial year end during any of the financial years referred to in this section and the transition year is less than 9 months, the transition year is deemed not to be a financial year for the purposes of the requirement to provide financial statements for a specified number of financial years in this section. (5) Despite subsection (4), all financial statements of the issuer for a transition year referred to in subsection (4) must be included in the prospectus.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 163 (6) Subject to section 32.4, if financial statements of any predecessor entity, business or businesses acquired by the issuer, or of any other entity are required under this section, then include (a) statements of comprehensive income, statements of changes in equity, and statements of cash flow for the entities or businesses for as many periods before the acquisition as may be necessary so that when these periods are added to the periods for which the issuer's statements of comprehensive income, statements of changes in equity, and statements of cash flow are included in the prospectus, the results of the entities or businesses, either separately or on a consolidated basis, total 3 years, (b) statements of financial position for the entities or businesses for as many periods before the acquisition as may be necessary so that when these periods are added to the periods for which the issuer's statements of financial position are included in the prospectus, the financial position of the entities or businesses, either separately or on a consolidated basis, total 2 years, (c) if the entities or businesses have not completed 3 financial years, the financial statements described under paragraphs (a) and (b) for each completed financial year of the entities or businesses for which the issuer's financial statements in the prospectus do not include the financial statements of the entities or businesses, either separately or on a consolidated basis, and ended more than (i) 90 days before the date of the prospectus, or (ii) 120 days before the date of the prospectus, if the issuer is a venture issuer, (d) if an entity's or business's first IFRS financial statements are included under paragraphs (a), (b) or (c), the opening IFRS statement of financial position at the date of transition to IFRS, and (e) a statement of financial position as at the beginning of the earliest comparative period for which financial statements that are included in the prospectus comply with IFRS in the case of an issuer that (i) discloses in its annual financial statements an unreserved statement of compliance with IFRS, and (ii) does any of the following (A) applies an accounting policy retrospectively in its financial statements, (B) makes a retrospective restatement of items in its financial statements, or
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 164 (C) reclassifies items in its financial statements.
32.3. Interim financial report
(1) Include a comparative interim financial report of the issuer for the most recent interim period, if any, ended (a) subsequent to the most recent financial year in respect of which annual financial statements of the issuer are included in the prospectus, and (b) more than (i) 45 days before the date of the prospectus, or (ii) 60 days before the date of the prospectus if the issuer is a venture issuer. (2) The interim financial report referred to in subsection (1) must include (a) a statement of financial position as at the end of the interim period and a statement of financial position as at the end of the immediately preceding financial year, if any, (b) a statement of comprehensive income, a statement of changes in equity, and a statement of cash flows, all for the year-to-date interim period, and comparative financial information for the corresponding interim period in the immediately preceding financial year, if any, (c) for interim periods other than the first interim period in an issuer's financial year, a statement of comprehensive income for the 3 month period ending on the last day of the interim period and comparative financial information for the corresponding period in the immediately preceding financial year, if any, (d) a statement of financial position as at the beginning of the earliest comparative period for which financial statements that are included in the prospectus comply with IFRS in the case of an issuer that (i) discloses in its interim financial report an unreserved statement of compliance with International Accounting Standard 34 Interim Financial Reporting, and (ii) does any of the following (A) applies an accounting policy retrospectively in its interim financial report,
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 165 (B) makes a retrospective restatement of items in its interim financial report, or (C) reclassifies items in its interim financial report, (e) in the case of the first interim financial report required to be filed in the year of adopting IFRS, the opening IFRS statement of financial position at the date of transition to IFRS, and (f) notes to the interim financial report. (3) If an issuer presents the components of profit or loss in a separate income statement, the separate income statement must be displayed immediately before the statement of comprehensive income filed under subsection (2). (4) If the issuer is required to include under subsection 32.3(1), a comparative interim financial report of the issuer for the second or third interim period in the year of adopting IFRS, include (a) the issuer's first interim financial report in the year of adopting IFRS, or (b) both (i) the opening IFRS statement of financial position at the date of transition to IFRS, and (ii) the annual and date of transition to IFRS reconciliations required by IFRS 1 First-time Adoption of International Financial Reporting Standards to explain how the transition from previous GAAP to IFRS affected the issuer's reported financial position, financial performance and cash flows. (5) Subsection (4) does not apply to an issuer that was a reporting issuer in at least one jurisdiction immediately before filing the prospectus.
32.4. Exceptions to financial statement requirements
(1) Despite section 32.2, an issuer is not required to include the following financial statements in a prospectus (a) the statement of comprehensive income, the statement of changes in equity, and the statement of cash flows for the third most recently completed financial year, if the issuer is (i) an IPO venture issuer, or
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 166 (ii) a reporting issuer in at least one jurisdiction immediately before filing the prospectus, (b) the statement of comprehensive income, the statement of changes in equity, and the statement of cash flows for the third most recently completed financial year, and the financial statements for the second most recently completed financial year, if (i) the issuer is a reporting issuer in at least one jurisdiction immediately before filing the prospectus, and (ii) the issuer includes financial statements for a financial year ended less than (A) 90 days before the date of the prospectus, or (B) 120 days before the date of the prospectus, if the issuer is a venture issuer, (c) the statement of comprehensive income, the statement of changes in equity, and the statement of cash flows for the third most recently completed financial year, and the statement of financial position for the second most recently completed financial year, if the issuer includes financial statements for a financial year ended less than 90 days before the date of the prospectus, (d) the statement of comprehensive income, the statement of changes in equity, and the statement of cash flows for the third most recently completed financial year, and the financial statements for the second most recently completed financial year, if (i) the issuer is a reporting issuer in at least one jurisdiction immediately before filing the prospectus, (ii) the issuer includes audited financial statements for a period of at least 9 months commencing the day after the most recently completed financial year for which financial statements are required under section 32.2, (iii) the business of the issuer is not seasonal, and (iv) none of the financial statements required under section 32.2 are for a financial year that is less than 9 months, (e) the statement of comprehensive income, the statement of changes in equity, and the statement of cash flows for the third most recently completed financial year, and the statement of financial position for the second most recently completed financial year, if
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 167 (i) the issuer includes audited financial statements for a period of at least 9 months commencing the day after the most recently completed financial year for which financial statements are required under section 32.2, (ii) the business of the issuer is not seasonal, and (iii) none of the financial statements required under section 32.2 are for a financial year that is less than 9 months, or (f) the separate financial statements of the issuer and the other entity for periods prior to the date of the transaction, if the restated combined financial statements of the issuer and the other entity are included in the prospectus under paragraph 32.1(c). (2) Paragraphs (1)(a), (b) and (d) do not apply to an issuer (a) whose principal asset is cash, cash equivalents or its exchange listing; or (b) in respect of financial statements of a reverse takeover acquirer for a completed or proposed transaction by the issuer that was or will be accounted for as a reverse takeover.
32.5. Exceptions to audit requirement
The audit requirement in section 4.2 of the Regulation does not apply to the following financial statements (a) any financial statements for the second and third most recently completed financial years required under section 32.2, if (i) those financial statements were previously included in a final prospectus without an auditor’s report pursuant to an exemption under applicable securities legislation, and (ii) an auditor has not issued an auditor’s report on those financial statements, (b) any financial statements for the second and third most recently completed financial years required under section 32.2, if (i) the issuer is a junior issuer, (i.1) an auditor has not issued an auditor’s report on those financial statements, and
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 168 (ii) the financial statements for the most recently completed financial year required under section 32.2 is not less than 12 months in length, or (c) any interim financial report required under section 32.3.
32.6. Additional financial statements or financial information filed or released
(1) If the issuer files financial statements for a more recent period than required under
section 32.2 or 32.3 before the prospectus is filed, the issuer must include in the
prospectus those more recent financial statements.
(2) If historical financial information about the issuer is publicly disseminated by, or on behalf of, the issuer through news release or otherwise for a more recent period than required under section 32.2, the issuer must include the content of the news release or public communication in the prospectus.
32.7. Pro forma financial statements for an acquisition
(1) An issuer must include in the prospectus the pro forma financial information set out in subsection (2) if (a) the issuer has completed or proposes an acquisition of a business for which financial statement disclosure is required under section 32.1; (b) less than 9 months of the acquired business operations have been reflected in the issuer’s most recent audited financial statements included in the prospectus; and (c) the inclusion of the pro forma financial statements is necessary for the prospectus to contain full, true and plain disclosure of all material facts relating to the securities to be distributed. (2) For the purposes of subsection (1), include the following:
(a) a pro forma statement of financial position of the issuer, as at the date of the issuer’s most recent statement of financial position included in the prospectus, that gives effect, as if it had taken place as at the date of the pro forma statement of financial position, to the acquisition that has been completed, or is expected to be completed, but is not reflected in the issuer’s most recent statement of financial position for an annual or interim period; (b) a pro forma income statement of the issuer that gives effect to the acquisition completed, or expected to be completed, since the beginning of the issuer’s most recently completed financial year for which it has included financial statements in its prospectus, as if it had taken place at the beginning of that financial year, for each of the following periods:
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 169 (i) the most recently completed financial year for which the issuer has included financial statements in its prospectus; and (ii) the interim period for which the issuer has included an interim financial report in its prospectus, that started after the financial year referred to in subparagraph (i) and ended (A) in the case of a completed acquisition, immediately before the acquisition date or, in the issuer’s discretion, after the acquisition date; (B) in the case of a proposed acquisition, immediately before the date of the filing of the prospectus, as if the acquisition had been completed before the filing of the prospectus and the acquisition date were the date of the prospectus; and (c) pro forma earnings per share based on the pro forma financial statements referred to in paragraph (b). (3) If an issuer is required to include pro forma financial statements in its prospectus under subsection (1), (a) in the case where the pro forma financial statements give effect to more than one acquisition, the issuer must identify in the pro forma financial statements each acquisition, (b) the issuer must include in the pro forma financial statements (i) adjustments attributable to the acquisition for which there are firm commitments and for which the complete financial effects are objectively determinable; (ii) adjustments to conform amounts for the business to the issuer’s accounting policies; and (iii) a description of the underlying assumptions on which the pro forma financial statements are prepared, cross-referenced to each related pro forma adjustment; (c) in the case where the financial year-end of the business differs from the issuer’s year-end by more than 93 days, for the purpose of preparing the pro forma income statement of the issuer’s most recently completed financial year, the issuer must construct an income statement of the business for a period of 12 consecutive months ending no more than 93 days before or after the issuer’s year-end, by adding the results for a subsequent interim period to a completed financial year of the business and deducting the comparable interim results for the immediately preceding year; (d) in the case where a constructed income statement is required under paragraph (c), the pro forma financial statements must disclose the period covered by the
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 170 constructed income statement on the face of the pro forma financial statements and must include a note stating that the financial statements of the business used to prepare the pro forma financial statements were prepared for the purpose of the pro forma financial statements and do not conform with the financial statements for the business included elsewhere in the prospectus; (e) in the case where an issuer is required to prepare a pro forma income statement for an interim period required by paragraph (2)(b), and the pro forma income statement for the most recently completed financial year includes results of the business which are also included in the pro forma income statement for the interim period, the issuer must disclose in a note to the pro forma financial statements the revenue, expenses, and profit or loss from continuing operations included in each pro forma income statement for the overlapping period; and (f) a constructed period referred to in paragraph (c) does not have to be audited.
32.8. Pro forma financial statements for multiple acquisitions
Despite subsection 32.7(1), an issuer is not required to include in its prospectus the pro forma financial statements otherwise required for each acquisition if the issuer includes in its prospectus one set of pro forma financial statements that (a) reflects the results of each acquisition since the beginning of the issuer’s most recently completed financial year for which financial statements of the issuer are included in the prospectus, and (b) is prepared as if each acquisition had occurred at the beginning of the most recently completed financial year of the issuer for which financial statements of the issuer are included in the prospectus.
32.9. Exemption from financial statement disclosure for oil & gas acquisitions
(1) In the case where sections 32.2, 32.3 and 32.7 apply to a completed or proposed acquisition by operation of section 32.1, those sections do not apply if (a) the acquisition is an acquisition of a business which is an interest in an oil and gas property; (b) the acquisition is not an acquisition of securities of another issuer, unless the vendor transferred the business referenced in paragraph (1)(a) to the other issuer and that other issuer (i) was created for the sole purpose of facilitating the acquisition; and
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 171 (ii) other than assets or operations relating to the transferred business, has no (A) substantial assets; or (B) operating history; (c) the issuer is unable to provide the financial statements in respect of the acquisition otherwise required under sections 32.2 and 32.3 because those financial statements do not exist or because the issuer does not have access to those financial statements; (d) the acquisition does not constitute a reverse takeover; (e) subject to subsections (2) and (3), in respect of the business for each of the financial periods for which financial statements would, but for this section, be required under sections 32.2 and 32.3, the prospectus includes (i) an operating statement for the business prepared in accordance with
section 3.17 of Regulation 52-107 respecting Acceptable Accounting Principles and
Auditing Standards (chapter V-1.1, r. 25);
(ii) a pro forma operating statement of the issuer that gives effect to the acquisition completed or to be completed since the beginning of the issuer’s most recently completed financial year for which financial statements are required to be included in the prospectus, as if the acquisition had taken place at the beginning of that financial year, for each of the financial periods referred to in paragraph 32.7(2)(b), unless (A) more than nine months of the acquired business operations have been reflected in the issuer’s most recent audited financial statements included in the prospectus; or (B) the inclusion of the pro forma financial statements is not necessary for the prospectus to contain full, true and plain disclosure of all material facts relating to the securities to be distributed; (iii) a description of the property or properties and the interest acquired by the issuer; and (iv) disclosure of the annual oil and gas production volumes from the business; (f) the operating statement for the three most recently completed financial years has been audited; (g) the prospectus discloses
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 172 (i) the estimated reserves and related future net revenue attributable to the business, the material assumptions used in preparing the estimates and the identity and relationship to the issuer or to the vendor of the person who prepared the estimates; and (ii) the estimated oil and gas production volumes from the business for the first year reflected in the estimated disclosure under subparagraph (i). (2) Subparagraphs (1)(e)(i), (ii) and (iv) do not apply if production, gross sales, royalties, production costs and operating income were nil, or are reasonably expected to be nil for the business for each financial period and the prospectus discloses that fact. (3) Paragraphs (1)(e) and (f) do not apply in respect of the third most recently completed financial year if the issuer has completed the acquisition and has included in the prospectus the following:
(a) information in accordance with Form 51-101F1 of Regulation 51-101 respecting Standards of Disclosure for Oil and Gas Activities as at a date commencing on or after the acquisition date and within 6 months of the date of the preliminary prospectus; (b) a report in the form of Form 51-101F2 of Regulation 51-101 respecting Standards of Disclosure for Oil and Gas Activities on the reserves data included in the disclosure required under paragraph (a); (c) a report in the form of Form 51-101F3 of Regulation 51-101 respecting Standards of Disclosure for Oil and Gas Activities that refers to the information disclosed under paragraph (a). Item 33 Credit Supporter Disclosure, Including Financial Statements
33.1 Credit supporter disclosure, including financial statements
If a credit supporter has provided a guarantee or alternative credit support for all or substantially all of the payments to be made under the securities being distributed, include statements by the credit supporter providing disclosure about the credit supporter that would be required under Items 4, 5, 8, 9, 16, 21, 23, 25, 26, and 32 if the credit supporter were the issuer of the securities to be distributed and such other information about the credit supporter as is necessary to provide full, true and plain disclosure of all material facts relating to the securities to be distributed.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 173 Item 34 Exemptions for Certain Issues of Guaranteed Securities
34.1. Definitions and interpretation
(1) In this Item
(a) the impact of subsidiaries, on a combined basis, on the financial statements of the parent entity is “minor” if each item of the summary financial information of the subsidiaries, on a combined basis, represents less than 3% of the total consolidated amounts, (b) a parent entity has “limited independent operations” if each item of its summary financial information represents less than 3% of the total consolidated amounts, (c) a subsidiary is a “finance subsidiary” if it has minimal assets, operations, revenue or cash flows other than those related to the issuance, administration and repayment of the security being distributed and any other securities guaranteed by its parent entity, (d) “parent credit supporter” means a credit supporter of which the issuer is a subsidiary, (e) “parent entity” means a parent credit supporter for the purposes of sections
34.2 and 34.3 and an issuer for the purpose of section 34.4,
(f) “subsidiary credit supporter” means a credit supporter that is a subsidiary of the parent credit supporter, and (g) “summary financial information” includes the following line items:
(i) revenue;
(ii) profit or loss from continuing operations attributable to owners of the parent; (iii) profit or loss attributable to owners of the parent; and (iv) unless the accounting principles used to prepare the financial statements of the entity permits the preparation of the entity's statement of financial position without classifying assets and liabilities between current and non-current and the entity provides alternative meaningful financial information which is more appropriate to the industry, (A) current assets; (B) non-current assets;
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 174 (C) current liabilities; and (D) non-current liabilities. INSTRUCTION See section 1.1 of the Regulation for the definitions of “profit or loss attributable to owners of the parent” and “profit or loss from continuing operations attributable to owners of the parent”. (2) For the purposes of this Item, consolidating summary financial information must be prepared on the following basis (a) an entity’s annual or interim summary financial information must be derived from the entity’s financial information underlying the corresponding consolidated financial statements of the parent entity included in the prospectus, (b) the parent entity column must account for investments in all subsidiaries under the equity method, and (c) all subsidiary entity columns must account for investments in non-credit supporter subsidiaries under the equity method.
34.2. Issuer is wholly-owned subsidiary of parent credit supporter
An issuer is not required to include the issuer disclosure required by Items 4, 5, 8, 9, 21, 23, 25, 26, and 32, if (a) a parent credit supporter has provided full and unconditional credit support for the securities being distributed, (b) the securities being distributed are non-convertible debt securities, nonconvertible preferred shares, or convertible debt securities or convertible preferred shares that are convertible, in each case, into non-convertible securities of the parent credit supporter, (c) the parent credit supporter is the beneficial owner of all the issued and outstanding voting securities of the issuer, (d) no other subsidiary of the parent credit supporter has provided a guarantee or alternative credit support for all or substantially all of the payments to be made under the securities being distributed, and (e) the issuer includes in the prospectus
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 175 (i) a statement that the financial results of the issuer are included in the consolidated financial results of the parent credit supporter, if (A) the issuer is a finance subsidiary, and (B) the impact of any subsidiaries of the parent credit supporter on a combined basis, excluding the issuer, on the consolidated financial statements of the parent credit supporter is minor, or (ii) for the periods covered by the parent credit supporter’s consolidated interim financial report and consolidated annual financial statements included in the prospectus under Item 33, consolidating summary financial information for the parent credit supporter presented with a separate column for each of the following:
(A) the parent credit supporter;
(B) the issuer;
(C) any other subsidiaries of the parent credit supporter on a combined basis; (D) consolidating adjustments; (E) the total consolidated amounts.
34.3. Issuer is wholly-owned subsidiary of, and 1 or more subsidiary credit
supporters controlled by, parent credit supporter (1) An issuer is not required to include the issuer disclosure required by Items 4, 5, 8, 9, 21, 23, 25, 26, and 32, or the credit supporter disclosure of 1 or more subsidiary credit supporters required by Item 33, if (a) a parent credit supporter and 1 or more subsidiary credit supporters have each provided full and unconditional credit support for the securities being distributed, (b) the guarantees or alternative credit supports are joint and several, (c) the securities being distributed are non-convertible debt securities, nonconvertible preferred shares, or convertible debt securities or convertible preferred shares that are convertible, in each case, into non-convertible securities of the parent credit supporter, (d) the parent credit supporter is the beneficial owner of all the issued and outstanding voting securities of the issuer,
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 176 (e) the parent credit supporter controls each subsidiary credit supporter and the parent credit support has consolidated the financial statements of each subsidiary credit supporter into the parent credit supporter’s financial statements that are included in the prospectus, and (f) the issuer includes in the prospectus, for the periods covered by the parent credit supporter’s financial statements included in the prospectus under Item 33, consolidating summary financial information for the parent credit supporter presented with a separate column for each of the following:
(i) the parent credit supporter;
(ii) the issuer;
(iii) each subsidiary credit supporter on a combined basis; (iv) any other subsidiaries of the parent credit supporter on a combined basis; (v) consolidating adjustments; (vi) the total consolidated amounts. (2) Despite paragraph (1)(f), the information set out in a column in accordance with (a) subparagraph (1)(f)(iv) may be combined with the information set out in accordance with any of the other columns in paragraph (1)(f) if the impact of any subsidiaries of the parent credit supporter on a combined basis, excluding the issuer and all subsidiary credit supporters, on the consolidated financial statements of the parent credit supporter is minor, and (b) subparagraph (1)(f)(ii), may be combined with the information set out in accordance with any of the other columns in paragraph (1)(f) if the issuer is a finance subsidiary.
34.4. One or more credit supporters controlled by issuer
An issuer is not required to include the credit supporter disclosure for 1 or more credit supporters required by Item 33, if (a) one or more credit supporters have each provided full and unconditional credit support for the securities being distributed, (b) there is more than 1 credit supporter, the guarantee or alternative credit supports are joint and several,
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 177 (c) the securities being distributed are non-convertible debt securities, nonconvertible preferred shares, or convertible debt securities or convertible preferred shares that are convertible, in each case, into non-convertible securities of the issuer, (d) the issuer controls each credit supporter and the issuer has consolidated the financial statements of each credit supporter into the issuer’s financial statements that are included in the prospectus, and (e) the issuer includes in the prospectus (i) a statement that the financial results of the credit supporter(s) are included in the consolidated financial results of the issuer, if (A) the issuer has limited independent operations, and (B) the impact of any subsidiaries of the issuer on a combined basis, excluding the credit supporter(s) but including any subsidiaries of the credit supporter(s) that are not themselves credit supporters, on the consolidated financial statements of the issuer is minor, or (ii) for the periods covered by the issuer’s financial statements included in the prospectus under Item 32, consolidating summary financial information for the issuer, presented with a separate column for each of the following:
(A) the issuer;
(B) the credit supporters on a combined basis; (C) any other subsidiaries of the issuer on a combined basis; (D) consolidating adjustments; (E) the total consolidated amounts. Item 35 Significant Acquisitions
35.1. Application and definitions
(1) This Item does not apply to
(a) a completed or proposed transaction by the issuer that was or will be a reverse takeover or a transaction that is a proposed reverse takeover that has progressed to a state where a reasonable person would believe that the likelihood of the reverse takeover being completed is high; or (b) a completed or proposed acquisition
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 178 (i) by the issuer if (A) the issuer’s principal asset before the acquisition is cash, cash equivalents or its exchange listing; or (B) the issuer was not a reporting issuer in any jurisdiction (I) on the acquisition date, in the case of a completed acquisition; and (II) immediately before filing the prospectus, in the case of a proposed acquisition; and (ii) to which Item 32 applies by operation of section 32.1. (2) (paragraph revoked). (3) The audit requirement in section 4.2 of the Regulation does not apply to any financial statements or other information included in the prospectus under this Item, other than the financial statements or other information for the most recently completed financial year of a business or related businesses acquired, or proposed to be acquired, by the issuer. (4) In this Item, "significant acquisition" means an acquisition of a business or related businesses that, (a) if the issuer was a reporting issuer in at least 1 jurisdiction on the acquisition date, is determined to be a significant acquisition under section 8.3 of Regulation 51-102 respecting Continuous Disclosure Obligations, or (b) if the issuer was not a reporting issuer in any jurisdiction on the acquisition date, would be determined to be a significant acquisition under section 8.3 of Regulation 51-102 respecting Continuous Disclosure Obligations, as if (i) the issuer was a reporting issuer on the acquisition date, (ii) the references to a “venture issuer” were read as an "IPO venture issuer" if the issuer is an IPO venture issuer, (iii) for the purposes of the optional tests, the issuer used its financial statements for the most recently completed interim period or financial year that is included in the prospectus, (iv) for the purposes of the optional profit or loss test, the most recently completed financial year of the business or related businesses were the financial year of
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 179 the business ended before the date of the prospectus, and the 12 months ended on the last day of the most recently completed interim period of the business or related businesses were the 12 months ended on the last day of the most recently completed interim period before the date of the prospectus, (v) subsection 8.3(11.1) of Regulation 51-102 respecting Continuous Disclosure Obligations did not apply, (vi) references to “audited annual statements filed” meant “audited annual financial statements included in the long form prospectus”, and (vii) in subsection 8.3(15) of Regulation 51-102 respecting Continuous Disclosure Obligations, the reference to “been required to file, and has not filed,” meant “been required to include, and has not included, in the long form prospectus”.
35.2. Completed acquisitions for which issuer has filed business acquisition
report
If an issuer completed an acquisition of a business or related businesses since the beginning of its most recently completed financial year for which financial statements are included in the prospectus, and it has filed a business acquisition report under Part 8 of Regulation 51-102 respecting Continuous Disclosure Obligations for the acquisition, include all of the disclosure included in, or incorporated by reference into, that business acquisition report.
35.3. Completed acquisitions for which issuer has not filed business acquisition
report because issuer was not reporting issuer on acquisition date (1) An issuer must include the disclosure required under subsection (2), if (a) the issuer completed an acquisition of a business or related businesses since the beginning of the issuer’s most recently completed financial year for which financial statements of the issuer are included in the prospectus, (b) the issuer was not a reporting issuer in any jurisdiction on the acquisition date, (c) the acquisition is a significant acquisition, and (d) the acquisition date was more than (i) 90 days before the date of the prospectus, if the financial year of the acquired business ended 45 days or less before the acquisition, or (ii) 75 days before the date of the prospectus.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 180 (2) For an acquisition to which subsection (1) applies, include all the disclosure that would be required to be included in, or incorporated by reference into, a business acquisition report filed under Part 8 of Regulation 51-102 respecting Continuous Disclosure Obligations, as if (a) the issuer was a reporting issuer in at least 1 jurisdiction on the acquisition date, (b) the business acquisition report was filed as at the date of the prospectus, (c) the issuer was a venture issuer at the acquisition date, if the issuer is an IPO venture issuer, (d) subsections 8.4(4) and 8.4(6) of Regulation 51-102 respecting Continuous Disclosure Obligations did not apply, and (e) references to financial statements filed or required to be filed meant financial statements included in the prospectus.
35.4. Financial Performance consolidated in financial statements of issuer
Despite section 35.2 and subsection 35.3(1), an issuer may omit the financial statements or other information of a business required to be included in the prospectus, if at least 9 months of the acquired business or related businesses financial performance have been reflected in the issuer’s most recent audited financial statements included in the prospectus.
35.5. Recently completed acquisitions
(1) Include the information required under subsection (2) for any significant acquisition completed by the issuer (a) since the beginning of the issuer’s most recently completed financial year for which financial statements of the issuer are included in the prospectus, and (b) for which the issuer has not included any disclosure under section 35.2 or subsection 35.3(2). (2) For a significant acquisition to which subsection (1) applies, include the following (a) the information required by sections 2.1 through 2.6 of Form 51-102F4 of Regulation 51-102 respecting Continuous Disclosure Obligations, and (b) the financial statements of or other information about the acquisition under subsection (3) for the acquired business or related businesses, if
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 181 (i) the issuer was not a reporting issuer in any jurisdiction immediately before filing the prospectus, or (ii) the issuer was a reporting issuer in at least 1 jurisdiction immediately before filing the prospectus, and the inclusion of the financial statements or other information is necessary for the prospectus to contain full, true and plain disclosure of all material facts relating to the securities to be distributed. (3) The requirement to include financial statements or other information under paragraph (2)(b) must be satisfied by including (a) if the issuer was a reporting issuer in at least 1 jurisdiction on the acquisition date, the financial statements or other information that will be required to be included in, or incorporated by reference into, a business acquisition report filed under Part 8 of Regulation 51-102 respecting Continuous Disclosure Obligations, (b) if the issuer was not a reporting issuer in any jurisdiction on the acquisition date, the financial statements or other information that would be required by subsection 35.3(2), or (c) satisfactory alternative financial statements or other information.
35.6. Probable acquisitions
(1) Include the information required under subsection (2) for any proposed acquisition of a business or related businesses by an issuer that has progressed to a state where a reasonable person would believe that the likelihood of the issuer completing the acquisition is high, and that, if completed by the issuer at the date of the prospectus, would be a significant acquisition. (2) For a proposed acquisition of a business or related businesses by the issuer that has progressed to a state where a reasonable person would believe that the likelihood of the issuer completing the acquisition is high and to which subsection (1) applies, include (a) the information required by sections 2.1 through 2.6 of Form 51-102F4 of Regulation 51-102 respecting Continuous Disclosure Obligations, modified as necessary to convey that the acquisition has not been completed, and (b) the financial statements or other information of the probable acquisition under subsection (3) for the acquired business or related businesses, if (i) the issuer was not a reporting issuer in any jurisdiction immediately before filing the prospectus, or (ii) the issuer was a reporting issuer in at least 1 jurisdiction immediately before filing the prospectus, and the inclusion of the financial statements or other
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 182 information is necessary for the prospectus to contain full, true and plain disclosure of all material facts relating to the securities to be distributed. (3) For a proposed acquisition of a business or related businesses by the issuer that has progressed to a state where a reasonable person would believe that the likelihood of the issuer completing the acquisition is high and to which subsection (2) applies, the requirement to include financial statements or other information under subsection (2)(b) must be satisfied by including (a) if the issuer was a reporting issuer in at least 1 jurisdiction immediately before filing the prospectus, the financial statements or other information that would be required to be included in, or incorporated by reference into, a business acquisition report filed under Part 8 of Regulation 51-102 respecting Continuous Disclosure Obligations, as if the acquisition date were the date of the prospectus, (b) if the issuer was not a reporting issuer in any jurisdiction immediately before filing the prospectus, the financial statements or other information that would be required to be included by subsection 35.3(2), as if the acquisition had been completed before the filing of the prospectus and the acquisition date were the date of the prospectus, or (c) satisfactory alternative financial statements or other information.
35.7. Pro forma financial statements for multiple acquisitions
Despite sections 35.2, 35.3, 35.5 and 35.6, an issuer is not required to include in its prospectus the pro forma financial statements otherwise required for each acquisition, if the issuer includes in its prospectus 1 set of pro forma financial statements that (a) reflects the results of each acquisition since the beginning of the issuer’s most recently completed financial year for which financial statements of the issuer are included in the prospectus, (b) is prepared as if each acquisition had occurred at the beginning of the most recently completed financial year of the issuer for which financial statements of the issuer are included in the prospectus, and (c) is prepared in accordance with (i) if no disclosure is otherwise required for a probable acquisition under
section 35.6, the section in this Item that applies to the most recently completed
acquisition, or
(ii) section 35.6.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 183
35.8. Additional financial statements or financial information of business filed or
released
(1) An issuer must include in its prospectus annual financial statements and an interim financial report of a business or related businesses for a financial period that ended before the acquisition date and is more recent than the periods for which financial statements are required under section 35.5 or 35.6 if, before the prospectus is filed, the financial statements of the business for the more recent period have been filed. (2) If, before the prospectus is filed, historical financial information of a business or related businesses for a period more recent than the period for which financial statements are required under section 35.5 or 35.6, is publicly disseminated by news release or otherwise by or on behalf of the issuer, the issuer shall include in the prospectus the content of the news release or public communication. Item 36 Probable Reverse Takeovers
36.1. Probable reverse takeovers
If the issuer is involved in a proposed reverse takeover that has progressed to a state where a reasonable person would believe that the likelihood of the reverse takeover being completed is high, include statements by the reverse takeover acquirer providing disclosure about the reverse takeover acquirer that would be required under this Form, as applicable, if the reverse takeover acquirer were the issuer of the securities to be distributed, and such other information about the reverse takeover acquirer as is necessary to provide full, true and plain disclosure of all material facts relating to the securities to be distributed, including the disclosure required by Items 4, 5,7, 8, 9, 11 to 19, 21 to 25, 27, 28, and 32. Item 36A Marketing Materials 36A.1. Marketing materials (1) If marketing materials were provided under subsection 13.7(1) or 13.8(1) of the Regulation, the issuer must (a) include a section, under the heading “Marketing Materials”, proximate to the beginning of the prospectus that contains the disclosure required by this Item, (b) subject to subsection (2), include the template version of the marketing materials filed under the Regulation in the final prospectus or incorporate by reference the template version of the marketing materials filed under the Regulation into the final prospectus, and (c) indicate that the template version of the marketing materials is not part of the final prospectus to the extent that the contents of the template version of the marketing
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 184 materials have been modified or superseded by a statement contained in the final prospectus. (2) An issuer may comply with paragraph (1)(b) by including the template version of the marketing materials filed under the Regulation in the section of the prospectus under the heading “Marketing Materials” or in an appendix to the prospectus that is referred to in that section. (3) If the prospectus or any amendment modifies a statement of material fact that appeared in marketing materials provided earlier, (a) provide details of how the statement in the marketing materials has been modified, and (b) disclose that, pursuant to subsection 13.7(7) or 13.8(7) of the Regulation, (i) the issuer has prepared a revised template version of the marketing materials which has been blacklined to show the modified statement, and (ii) the revised template version of the marketing materials can be viewed under the issuer’s profile on www.sedar.com. (4) State that any template version of the marketing materials filed under the Regulation after the date of the final prospectus and before the termination of the distribution is deemed to be incorporated into the final prospectus. (5) If the issuer relies on the exception in subsection 13.12(1) of the Regulation, include the following statement or words to the same effect:
“Before the filing of the final prospectus, the issuer and underwriters held road shows on [insert dates and brief description of road shows for U.S. cross-border offering eligible for the exception in subsection 13.12(1) of the Regulation or other prospectus rule] to which potential investors in [insert the jurisdictions of Canada where the prospectus was filed] were able to attend. The issuer and the underwriters provided marketing materials to those potential investors in connection with those road shows. In doing so, the issuer and the underwriters relied on a provision in applicable securities legislation that allows issuers in certain U.S. cross-border offerings to not have to file marketing materials relating to those road shows on SEDAR or include or incorporate those marketing materials in the final prospectus. The issuer and the underwriters can only do that if they give a contractual right to investors in the event the marketing materials contain a misrepresentation. Pursuant to that provision, the issuer and the underwriters signing the certificate contained in this prospectus have agreed that in the event the marketing materials relating to those road shows contain a misrepresentation (as defined in securities legislation in
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 185 [insert the jurisdictions of Canada where the prospectus was filed]), a purchaser resident in [insert the jurisdictions of Canada where the prospectus was filed] who was provided with those marketing materials in connection with the road shows and who purchases the securities offered by this prospectus during the period of distribution shall have, without regard to whether the purchaser relied on the misrepresentation, rights against the issuer and each underwriter with respect to the misrepresentation which are equivalent to the rights under the securities legislation of the jurisdiction in Canada where the purchaser is resident, subject to the defences, limitations and other terms of that legislation, as if the misrepresentation was contained in this prospectus. However, this contractual right does not apply to the extent that the contents of the marketing materials relating to the road shows have been modified or superseded by a statement in this prospectus. In particular, [insert a description of how any statement in the marketing materials has been modified or superseded by a statement in the prospectus].” GUIDANCE Marketing materials do not, as a matter of law, amend a preliminary prospectus, a final prospectus or any amendment. Item 37 Certificates
37.1. Certificates
Include the certificates required by Part 5 of the Regulation or by securities legislation.
37.2. Issuer certificate form
An issuer certificate form must state:
“This prospectus constitutes full, true and plain disclosure of all material facts relating to the securities offered by this prospectus as required by the securities legislation of [insert the jurisdictions in which qualified].”
37.3. Underwriter certificate form
An underwriter certificate form must state:
“To the best of our knowledge, information and belief, this prospectus constitutes full, true and plain disclosure of all material facts relating to the securities offered by this prospectus as required by the securities legislation of [insert the jurisdictions in which qualified].”
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 186
37.4. Amendments
(1) For an amendment to a prospectus that does not restate the prospectus, change “prospectus” to “prospectus dated [insert date] as amended by this amendment” wherever it appears in the statements in sections 37.2 and 37.3. (2) For an amended and restated prospectus, change “prospectus” to “amended and restated prospectus” wherever it appears in the statements in sections 37.2 and 37.3.
37.5. Non-offering prospectuses
For a non-offering prospectus, change “securities offered by this prospectus” to “securities previously issued by the issuer” wherever it appears in the statements in sections 37.2 and 37.3.
37.6. Marketing materials
If an issuer filed a template version of marketing materials under paragraph 13.7(1)(e) of the Regulation or intends to file a template version of marketing materials under paragraph 13.8(1)(e) of the Regulation, change “prospectus” to “prospectus (which includes the marketing materials included or incorporated by reference)” where it first appears in the statements in sections 37.2 and 37.3. Item 38 Transition
38.1. Interim financial report
(1) Despite subsection 32.3(1), an issuer may include a comparative interim financial report of the issuer for the most recent interim period, if any, ended (a) subsequent to the most recent financial year in respect of which annual financial statements of the issuer are included in the prospectus, and (b) more than (i) 75 days before the date of the prospectus, or (ii) 90 days before the date of the prospectus if the issuer is a venture issuer. (2) Subsection (1) does not apply unless (a) the comparative interim financial report is the first interim financial report required to be filed in the year of adopting IFRS in respect of an interim period beginning on or after January 1, 2011,
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 187 (b) the issuer (i) is disclosing, for the first time, a statement of compliance with International Accounting Standard 34 Interim Financial Reporting, and (ii) did not previously file financial statements that disclosed compliance with IFRS, (c) the issuer is a reporting issuer in any jurisdiction immediately before the date of the final long form prospectus, and (d) the final long form prospectus is filed before July 5, 2012.
38.2. Asset-backed securities
(1) Despite subsection 10.3(5), all financial disclosure that describes the underlying pool of financial assets of the issuer for a transition year must be included in the prospectus for the most recent interim period, if any, ended (a) subsequent to the most recent financial year referred to in paragraphs 10.3(3)(a) and 10.3(3)(b) in respect of which financial disclosure on the underlying pool of financial assets is included in the prospectus, and (b) more than (i) 75 days before the date of the prospectus, or (ii) 90 days before the date of the prospectus if the issuer is a venture issuer. (2) Subsection (1) does not apply unless (a) the financial disclosure in respect of the interim period is the first interim financial report required to be filed in the year of adopting IFRS in respect of an interim period beginning on or after January 1, 2011, (b) the issuer (i) is disclosing, for the first time, a statement of compliance with International Accounting Standard 34 Interim Financial Reporting, and (ii) did not previously file financial statements that disclosed compliance with IFRS, (c) the issuer is a reporting issuer in any jurisdiction immediately before the date of the final long form prospectus, and
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 188 (d) the final long form prospectus is filed before July 5, 2012. _______________ M.O. 2008-05, Sch. 41-101F1; M.O. 2010-15, s. 1; M.O. 2010-17, s. 8; M.O. 2012-05, s. 1; M.O. 2013-03, s. 13; M.O. 2013-08, s. 16; M.O. 2013-13, s. 9; M.O. 2014-07, s. 1; M.O. 2015-08, s. 1; M.O. 2015-15, s. 2.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 189 FORM 41-101F2 INFORMATION REQUIRED IN AN INVESTMENT FUND PROSPECTUS GENERAL INSTRUCTIONS (1) The objective of the prospectus is to provide information concerning the investment fund that an investor needs in order to make an informed investment decision. This Form sets out specific disclosure requirements that are in addition to the general requirement under securities legislation to provide full, true and plain disclosure of all material facts relating to the securities to be distributed. This Form does not prohibit including information beyond what the Form requires. Further, certain rules of specific application impose prospectus disclosure obligations in addition to those described in this Form. (2) Terms used and not defined in this Form that are defined or interpreted in the Regulation must bear that definition or interpretation. Other definitions are set out in Regulation 14-101 respecting Definitions (chapter V-1.1, r. 3). (3) In determining the degree of detail required, a standard of materiality must be applied. Materiality is a matter of judgment in the particular circumstance, and is determined in relation to an item’s significance to investors, analysts and other users of the information. An item of information, or an aggregate of items, is considered material if it is probable that its omission or misstatement would influence or change an investment decision with respect to the investment fund’s securities. In determining whether information is material, take into account both quantitative and qualitative factors. The potential significance of items must be considered individually rather than on a net basis, if the items have an offsetting effect. (4) Unless an item specifically requires disclosure only in the preliminary prospectus, the disclosure requirements set out in this Form apply to both the preliminary prospectus and the prospectus. Details concerning the price and other matters dependent upon or relating to price, such as the number of securities being distributed, may be left out of the preliminary prospectus, along with specifics concerning the plan of distribution, to the extent that these matters have not been decided. (5) The disclosure must be understandable to readers and presented in an easy-toread format. The presentation of information should comply with the plain language principles listed in section 4.1 of Policy Statement to Regulation 41-101 respecting General Prospectus Requirements (Decision 2008-PDG-0055, 2008-02-28). If technical terms are required, clear and concise explanations should be included. (6) No reference need be made to inapplicable items and, unless otherwise required in this Form, negative answers to items may be omitted. (7) The disclosure required in this Form must be presented in the order and using the headings specified in the Form. If no sub-heading for an Item is stipulated in this
Form, an investment fund may include sub-headings under the required headings.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 190 (8) Where the term “investment fund” is used, it may be necessary, in order to meet the requirement for full, true and plain disclosure of all material facts, to also include disclosure with respect to the investment fund’s investees. If it is more likely than not that a person will become an investee, it may be necessary to also include disclosure with respect to the person. For this purpose, investees include entities that are consolidated, proportionately consolidated, or accounted for using the equity method. (9) If disclosure is required as of a specific date and there has been a material change or change that is otherwise significant in the required information subsequent to that date, present the information as of the date of the change or a date subsequent to the change instead. (10) If the term “class” is used in any item to describe securities, the term includes a series. (11) Where performance data is presented in the prospectus, annual compound returns must be presented for standard applicable performance periods of 1, 3, 5 and 10 year periods and the period since inception unless otherwise specified by the requirements of this Form. Performance data for periods of less than 1 year must not be presented. Hypothetical or back-tested performance data must not be presented. (12) An investment fund that has more than one class or series that are referable to the same portfolio may treat each class or series as a separate investment fund for the purposes of this Form, or may combine disclosure of one or more of the classes or series in one prospectus. If disclosure pertaining to more than one class or series is combined in one prospectus, separate disclosure in response to each item in this Form must be provided for each class or series unless the responses would be identical for each class or series. (13) A section, part, class or series of a class of securities of an investment fund that is referable to a separate portfolio is considered to be a separate investment fund for the purposes of this Form. An investment fund that has more than one class or series of securities referable to separate portfolios may combine disclosure of one or more of the classes or series in one prospectus if each class or series is managed by the same manager. If disclosure pertaining to more than one class or series is combined in one prospectus, separate disclosure in response to each item in this Form must be provided for each class or series unless the responses would be identical for each class or series.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 191 PROSPECTUS FORM Item 1 Cover Page Disclosure
1.1. Preliminary Prospectus Disclosure
Every preliminary prospectus must have printed in red ink and in italics at the top of the cover page immediately above the disclosure required in section 1.2 the following, with the bracketed information completed:
“A copy of this preliminary prospectus has been filed with the securities regulatory authority(ies) in [each of/certain of the provinces/provinces and territories of Canada] but has not yet become final for the purpose of the sale of securities. Information contained in this preliminary prospectus may not be complete and may have to be amended. The securities may not be sold until a receipt for the prospectus is obtained from the securities regulatory authority(ies).” INSTRUCTION Investment funds must complete the bracketed information by (a) inserting the names of each jurisdiction in which the investment fund intends to offer securities under the prospectus; (b) stating that the filing has been made in each of the provinces of Canada or each of the provinces and territories of Canada; or (c) identifying the filing jurisdictions by exception (i.e., every province of Canada or every province and territory of Canada, except [excluded jurisdictions].
1.2. Required Statement
State in italics at the top of the cover page the following:
“No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise.”
1.3. Basic Disclosure about the Distribution
(1) State the following immediately below the disclosure required under sections 1.1 and 1.2 with the bracketed information completed:
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 192 “[PRELIMINARY OR PRO FORMA] PROSPECTUS [INITIAL PUBLIC OFFERING OR NEW ISSUE AND/OR SECONDARY OFFERING OR CONTINUOUS OFFERING] [Date] [Name of investment fund] [number and type of securities qualified for distribution under the prospectus and the price per security] [type of fund – state the following: “This investment fund is a [labour sponsored or venture capital fund, alternative mutual fund, non-redeemable investment fund or exchange-traded mutual fund, or, if the issuer is another type of investment fund, state the type of fund].” If securities of the investment fund are intended to be listed or quoted on an exchange or marketplace and conditional listing approval has been received, state the following: “[Name of exchange or marketplace] has conditionally approved the [listing/quotation] of the [type of securities qualified for distribution under the prospectus and to be listed/quoted], subject to the [name of investment fund] fulfilling all of the requirements of the [name of exchange or marketplace] on or before [date] .”]” (2) Briefly describe the investment objectives of the investment fund and provide a cross-reference to sections in the prospectus where information about the investment objectives is provided. (3) State the name of the manager and portfolio adviser of the investment fund and provide a cross-reference to sections in the prospectus where information about the manager and portfolio adviser is provided. (4) If the mutual fund to which the prospectus pertains is an alternative mutual fund, include a statement explaining that the fund is permitted to invest in asset classes or use investment strategies that are not permitted for other types of mutual funds and explain how exposure to the asset classes or the adoption of the investment strategies may affect investors’ risk of losing money on their investment in the fund.
1.4. Distribution
(1) Subsections (2) – (8) do not apply to an investment fund in continuous distribution. (2) If the securities are being distributed for cash, provide the information called for below, in substantially the following tabular form or in a note to the table:
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 193 Price to public (a) Underwriting discounts or commission (b) Proceeds to issuer or selling securityholders (c) Per Security Total (3) Describe the terms of any over-allotment option or any option to increase the size of the distribution before closing. (3.1) If there may be an over-allocation position provide the following disclosure:
“A purchaser who acquires [insert type of securities qualified for distribution under the prospectus] forming part of the underwriters’ over-allocation position acquires those securities under this prospectus, regardless of whether the over-allocation position is ultimately filled through the exercise of the over-allotment option or secondary market purchases.” (4) If the distribution of the securities is to be on a best efforts basis, and a minimum offering amount (a) is required for the issuer to achieve one or more of the purposes of the offering, provide totals for both the minimum and maximum offering amount, or (b) is not required for the issuer to achieve any of the purposes of the offering, state the following in boldface type:
“There is no minimum amount of funds that must be raised under this offering. This means that the issuer could complete this offering after raising only a small proportion of the offering amount set out above.”. (5) If debt securities are being distributed at a premium or a discount, state in boldface type the effective yield if held to maturity. (6) Disclose separately those securities that are underwritten, those under option and those to be sold on a best efforts basis, and, in the case of a best efforts distribution, the latest date that the distribution is to remain open. (7) In column (b) of the table, disclose only commissions paid or payable in cash by the investment fund or selling securityholder and discounts granted. Set out in a note to the table (a) commissions or other consideration paid or payable by persons other than the investment fund or selling securityholder,
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 194 (b) consideration other than discounts granted and cash paid or payable by the investment fund or selling securityholder, including warrants and options, and (c) any finder’s fees or similar required payment. (8) If a security is being distributed for the account of a selling securityholder, state the name of the securityholder and a cross-reference to the applicable section in the prospectus where further information about the selling securityholder is provided. State the portion of the expenses of the distribution to be borne by the selling securityholder and, if none of the expenses of the distribution are being borne by the selling securityholder, include a statement to that effect and discuss the reason why this is the case. (9) If a minimum subscription amount is required from each subscriber, provide details of the minimum subscription requirements. INSTRUCTIONS (1) Estimate amounts, if necessary. For non-fixed price distributions that are being made on a best efforts basis, disclosure of the information called for by the table may be set forth as a percentage or a range of percentages and need not be set forth in tabular form. (2) If debt securities are being distributed, also express the information in the table as a percentage.
1.5. Offering Price in Currency Other than Canadian Dollar
If the offering price of the securities being distributed is disclosed in a currency other than the Canadian dollar, disclose in boldface type the currency.
1.6. Non-fixed Price Distributions
If the securities are being distributed at non-fixed prices, disclose (a) the discount allowed or commission payable to the underwriter, (b) any other compensation payable to the underwriter and, if applicable, that the underwriter’s compensation will be increased or decreased by the amount by which the aggregate price paid for the securities by the purchasers exceeds or is less than the gross proceeds paid by the underwriter to the investment fund or selling securityholder, (c) that the securities to be distributed under the prospectus will be distributed, as applicable, at
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 195 (i) prices determined by reference to the prevailing price of a specified security in a specified market, (ii) market prices prevailing at the time of sale, (iii) prices to be negotiated with purchasers, or (iv) the net asset value of a security, (d) that prices may vary from purchaser to purchaser and during the period of distribution, (e) if the price of the securities is to be determined by reference to the prevailing price of a specified security in a specified market, the price of the specified security in the specified market at the latest practicable date, (f) if the price of the securities will be the market price prevailing at the time of the sale, the market price at the latest practicable date, and (g) the net proceeds or, if the distribution is to be made on a best efforts basis, the minimum amount of net proceeds, if any, to be received by the investment fund or selling securityholder.
1.7. Pricing Disclosure
If the offering price or the number of securities being distributed, or an estimate of the range of the offering price or the number of securities being distributed, has been publicly disclosed in a jurisdiction or a foreign jurisdiction as of the date of the preliminary prospectus, include this information in the preliminary prospectus.
1.8. Reduced Price Distributions
If an underwriter wishes to be able to decrease the price at which securities are distributed for cash from the initial offering price fixed in the prospectus, include in boldface type a cross-reference to the section in the prospectus where disclosure concerning the possible price decrease is provided.
1.9. Market for Securities
(1) Identify the exchange(s) and quotation system(s), if any, on which securities of the investment fund of the same class as the securities being distributed are traded or quoted and the market price of those securities as of the latest practicable date. (2) Disclose any intention to stabilize the market. Provide a cross-reference to the
section in the prospectus where further information about market stabilization is provided.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 196 (3) If no market for the securities being distributed under the prospectus exists or is expected to exist upon completion of the distribution, state the following in boldface type:
“There is no market through which these securities may be sold and purchasers may not be able to resell securities purchased under this prospectus. This may affect the pricing of the securities in the secondary market, the transparency and availability of trading prices, the liquidity of the securities, and the extent of issuer regulation. See ‘Risk Factors’.” (4) Subsection (3) does not apply to an investment fund in continuous distribution.
1.10. Risk Factors
Include a cross-reference to sections in the prospectus where information about the risks of an investment in the securities being distributed is provided. State any significant risks including leverage.
1.11. Underwriter(s)
(1) State the name of each underwriter.
(2) If applicable, comply with the requirements of Regulation 33-105 respecting Underwriting Conflicts (chapter V-1.1, r. 11) for front page prospectus disclosure. (3) Other than a labour sponsored or venture capital fund or alternative mutual fund, if there is no underwriter involved in the distribution, provide a statement in boldface type to the effect that no underwriter has been involved in the preparation of the prospectus or performed any review or independent due diligence of the contents of the prospectus.
1.12. (Revoked)
1.13. Restricted Securities
Describe the number and class or classes of restricted securities being distributed using the appropriate restricted security terms in the same type face and type size as the rest of the description.
1.14. Enforcement of Judgements Against Foreign Persons
If the investment fund, investment fund manager or any other person that is signing or providing a certificate under Part 5 of the Regulation or other securities legislation, or any person for whom the issuer is required to file a consent under Part 10 of the Regulation, is incorporated, continued, or otherwise organized under the laws of a foreign jurisdiction or resides outside of Canada, state the following on the cover page or under a separate heading elsewhere in the prospectus, with the bracketed information completed:
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 197 “The [investment fund, investment fund manager or any other person] is incorporated, continued or otherwise organized under the laws of a foreign jurisdiction or resides outside of Canada. [the person named below] has appointed the following agent(s) for service of process:
Name of Person Name and Address of Agent
Purchasers are advised that it may not be possible for investors to enforce judgments obtained in Canada against any person that is incorporated, continued or otherwise organized under the laws of a foreign jurisdiction or resides outside of Canada, even if the party has appointed an agent for service of process.
1.15. Documents Incorporated by Reference
For an investment fund in continuous distribution, state in substantially the following words:
“Additional information about the fund is available in the following documents:
- the most recently filed ETF Facts for each class or series of securities of the
ETF; [insert if applicable] - the most recently filed annual financial statements;
- any interim financial reports filed after those annual financial statements;
- the most recently filed annual management report of fund performance;
- any interim management report of fund performance filed after that annual
management report of fund performance.
These documents are incorporated by reference into this prospectus which means that they legally form part of this prospectus. Please see the “Documents Incorporated by Reference” section for further details.”. Item 2 Table of Contents
2.1 Table of Contents
Include a table of contents.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 198 Item 3 Summary of Prospectus
3.1. Prospectus Summary
Under the heading “Prospectus Summary” include the information listed in sections
3.2 to 3.6.
3.2. Cautionary Language
At the beginning of the summary, include a statement in italics in substantially the following form:
“The following is a summary of the principal features of this distribution and should be read together with the more detailed information and financial data and statements contained elsewhere in this prospectus [[if applicable] or incorporated by reference in the prospectus].”
3.3. General
(1) Briefly summarize information appearing elsewhere in the prospectus that, in the opinion of the investment fund or selling securityholder, would be most likely to influence the investor’s decision to purchase the securities being distributed. Include a description of (a) how the investment fund has been organized (corporation, trust, etc.), (b) the securities to be distributed, including the offering price and expected net proceeds, (c) the investment objectives, (d) the investment strategies, (e) the use of leverage, including all of the following:
(i) the maximum aggregate exposure to borrowing, short selling and specified derivatives the investment fund is permitted to have, expressed as a percentage calculated in accordance with section 2.9.1 of Regulation 81-102 respecting Investment Funds (chapter V 1.1, r. 39), (ii) a brief description of any other restrictions on the investment fund’s use of leverage, and (iii) a brief description of any limits that apply to each source of leverage; (f) the use of proceeds,
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 199 (g) risk factors, (h) income tax considerations, (i) all available purchase options and state, if applicable, that the choice of different purchase options requires the investor to pay different fees and expenses and if applicable, that the choice of different purchase options affects the amount of compensation paid to a dealer, (j) the redemption features, (k) the distribution policy, (l) the termination provisions, (m) if restricted securities, subject securities or securities directly or indirectly convertible into or exercisable or exchangeable for restricted securities or subject securities are to be distributed under the prospectus, (i) include a summary of the information required by section 21.6, and (ii) include, in boldface type, a statement of the rights the holders of restricted securities do not have if the holders do not have all of the rights referred to in
section 21.6, and
(n) whether the investment fund is eligible as an investment for registered retirement savings plans, registered retirement income plans, registered education savings plans or deferred profit sharing plans. (2) For each item summarized under subsection (1), provide a cross-reference to the information in the prospectus. INSTRUCTIONS (1) For the purposes of Item 3.3(1)(e)(i), a fund must calculate its maximum total assets by aggregating the maximum value of its long positions, short positions and the maximum amount that may be borrowed. (2) For the purposes of the disclosure required by Item 3.3(1)(e)(ii), the term “specified derivative” has the same meaning as in Regulation 81-102 respecting Investment Funds (chapter V-1.1, r. 39). The description of an investment fund’s use of leverage under Item 3.3(1)(e)(ii) must provide investors with sufficient information to understand the magnitude of the market exposure of the investment fund as compared to the amount of money raised by the investment fund from investors.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 200
3.4. Organization and Management of the Investment Fund
(1) Provide, under the sub-heading “Organization and Management of the [name of investment fund]”, information about the manager, trustee, portfolio adviser, promoter, custodian, registrar and transfer agent, auditor, principal distributor and securities lending agent of the investment fund in the form of a diagram or table. (2) For each entity listed in the diagram or table, briefly describe the services provided by that entity and the relationship of that entity to the manager. (3) For each entity listed in the diagram or table, other than the manager of the investment fund, provide the municipality and the province or country where it principally provides its services to the investment fund. Provide the complete municipal address for the manager of the investment fund. INSTRUCTIONS:
(1) The information required to be disclosed in this section must be presented prominently, using enough space so that it is easy to read. (2) Briefly describe the services provided by the listed entities. For instance, the manager may be described as “manages the overall business and operations of the fund”, and a portfolio adviser may be described as “provides investment advice to the manager about the investment portfolio of the fund” or “manages the investment portfolio of the fund”.
3.5. Underwriter(s)
(1) Under the sub-heading “Underwriters” or “Agents”, as applicable, state the name of each underwriter or agent. (2) If an underwriter has agreed to purchase all of the securities being distributed at a specified price and the underwriter’s obligations are subject to conditions, state the following, with the bracketed information completed:
“We, as principals, conditionally offer these securities, subject to prior sale, if, as and when issued by [name of investment fund] and accepted by us in accordance with the conditions contained in the underwriting agreement referred to under "Plan of Distribution”.” (3) If an underwriter has agreed to purchase a specified number or principal amount of the securities at a specified price, state that the securities are to be taken up by the underwriter, if at all, on or before a date not later than 42 days after the date of the receipt for the final prospectus. (4) Provide the following tabular information:
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 201 Underwriter’s Position Maximum size or number of securities available Exercise period/ Acquisition date Exercise price or average acquisition price Over-allotment option Compensation option Any other option granted by investment fund or insider of investment fund to underwriter Total securities under option issuable to underwriter Other compensation securities issuable to underwriter INSTRUCTION If the underwriter has been granted compensation securities, state, in a footnote, whether the prospectus qualifies the grant of all or part of the compensation securities and provide a cross-reference to the applicable section in the prospectus where further information about the compensation securities is provided.
3.6. Fees, Expenses and Returns
(1) Set out information about the fees and expenses payable by the investment fund and by investors in the investment fund under the sub-heading “Summary of Fees and Expenses”. (2) The information required by this section must be a summary of the fees, charges and expenses of the investment fund and investors presented in the form of the following
table, appropriately completed, and introduced using substantially the following words:
“This table lists the fees and expenses that you may have to pay if you invest in the [insert the name of the investment fund]. You may have to pay some of these fees and expenses directly. The Fund may have to pay some of these fees and expenses, which will therefore reduce the value of your investment in the Fund.” Fees and Expenses Payable by the Fund Type of Fee Amount and Description Fees and Expenses Payable Directly by You
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 202 Type of Fee Amount and Description (3) Describe the following fees and expenses in the table referred to in subsection (2):
Fees and Expenses Payable by the Fund
(a) Fees payable to the Underwriters for Selling the Securities (b) Expenses of the Issue (c) Management Fees [See Instruction (1)] (d) Incentive or Performance Fees (e) Portfolio Adviser Fees (f) Counterparty Fees (if any) (g) Operating Expenses [See Instructions (2) and (3)] (h) Other Fees and Expenses [specify type] [specify amount] Fees and Expenses Payable Directly by You (i) Sales Charges [specify percentage, as a percentage of ] (j) Service Fees [specify percentage, as a percentage of ] (k) Redemption Fees [specify percentage, as a percentage of or specify amount] (l) Registered Tax Plan Fees [include this disclosure and specify the type of fees if the registered tax plan is sponsored by the investment fund and is described in the prospectus][specify amount] (m) Other Fees and Expenses [specify type] [specify amount]. (4) For investment funds other than mutual funds, under the sub-heading “Annual Returns, Management Expense Ratio and Trading Expense Ratio”, provide, in the following table, returns for each of the past 5 years, the management expense ratio for each of the past 5 years and the trading expense ratio for each of the past 5 years as disclosed in the most recently filed annual management report of fund performance of the investment fund:
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 203 [specify year] [specify year] [specify year] [specify year] [specify year] Annual Returns MER TER “MER” means management expense ratio based on management fees and operating expenses (excluding commissions and other portfolio transaction costs) expressed as an annualized percentage of daily average net asset value. “TER” means trading expense ratio and represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value. INSTRUCTIONS:
(1) List the amount of the management fee, including any performance or incentive fee, for each investment fund separately. (2) Under “Operating Expenses”, state whether the investment fund pays all of its operating expenses and list the main components of those expenses. If the investment fund pays only certain operating expenses and is not responsible for payment of all such expenses, adjust the statement in the table to reflect the proper contractual responsibility of the investment fund and indicate who is responsible for the payment of these expenses. (3) Show all fees or expenses payable by the investment fund (e.g. brokerage) and investors in the investment fund. The description of fees must also include sales and trailing commissions paid either by the investment fund or the investor. Item 4 Overview of the Structure of the Investment Fund
4.1. Legal Structure
(1) Under the heading “Overview of the Legal Structure of the Fund”, state the full corporate name of the investment fund or, if the investment fund is an unincorporated entity, the full name under which it exists and carries on business and the address(es) of the investment fund’s head and registered office. (2) State the statute under which the investment fund is incorporated or continued or organized or, if the investment fund is an unincorporated entity, the laws of the jurisdiction or foreign jurisdiction under which the investment fund is established and exists. Describe the substance of any material amendments to the articles or other constating or establishing documents of the investment fund. (3) State whether the investment fund would be considered a mutual fund under securities legislation.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 204 Item 5 Investment Objectives
5.1. Investment Objectives
(1) Set out under the heading “Investment Objectives” the fundamental investment objectives of the investment fund, including information that describes the fundamental nature of the investment fund, or the fundamental features of the investment fund, that distinguish it from other investment funds. (2) If the investment fund purports to arrange a guarantee or insurance in order to protect all or some of the principal amount of an investment in the investment fund, include this fact as a fundamental investment objective of the investment fund and (a) identify the person providing the guarantee or insurance, (b) provide the material terms of the guarantee or insurance, including the maturity date of the guarantee or insurance, (c) if applicable, state that the guarantee or insurance does not apply to the amount of any redemptions before the maturity date of the guarantee or before the death of the securityholder and that redemptions before that date would be based on the net asset value of the investment fund at the time, and (d) modify any other disclosure required by this section appropriately. INSTRUCTIONS:
(1) State the type or types of securities, such as money market instruments, bonds or equity securities, in which the investment fund will primarily invest under normal market conditions. (2) If the investment fund primarily invests, or intends to primarily invest, or if its name implies that it will primarily invest (a) in a particular type of issuer, such as foreign issuers, small capitalization issuers or issuers located in emerging market countries, (b) in a particular geographic location or industry segment, or (c) in portfolio assets other than securities, the investment fund's fundamental investment objectives must so indicate. (3) If a particular investment strategy is an essential aspect of the investment fund, as evidenced by the name of the investment fund or the manner in which the investment fund is marketed, disclose this strategy as an investment objective. This instruction would
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 205 be applicable, for example, to an investment fund that described itself as an "investment fund that invests primarily through the use of derivatives". (4) If the mutual fund is an alternative mutual fund, describe the features of the mutual fund that cause it to fall within the definition of “alternative mutual fund” in Regulation 81-102 respecting Investment Funds. If those features involve the use of leverage, disclose the sources of leverage (i.e., borrowing, short selling, use of derivatives) the alternative mutual fund is permitted to use and the maximum aggregate exposure to those sources of leverage the alternative mutual fund is permitted to have, as a percentage calculated in accordance with section 2.9.1 of Regulation 81-102 respecting Investment Funds. Item 6 Investment Strategies
6.1. Investment Strategies
(1) Describe under the heading “Investment Strategies” (a) the principal investment strategies that the investment fund intends to use in achieving its investment objectives, (b) the use of leverage, including both of the following:
(i) a brief description of any restrictions on the investment fund’s use of leverage; (ii) a brief description of any limits that apply to each source of leverage. (c) the process by which the investment fund's portfolio adviser selects securities for the fund's portfolio, including any investment approach, philosophy, practices or techniques used by the portfolio adviser or any particular style of portfolio management that the portfolio adviser intends to follow. (2) Indicate what types of securities, other than those held by the investment fund in accordance with its fundamental investment objectives, may form part of the investment fund's portfolio assets under normal market conditions. (3) If the investment fund intends to use derivatives (a) for hedging purposes only, state that the investment fund may use derivatives for hedging purposes only, or (b) for non-hedging purposes, or for hedging and non-hedging purposes, briefly describe
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 206 (i) how derivatives are or will be used in conjunction with other securities to achieve the investment fund’s investment objectives, (ii) the types of derivatives expected to be used and give a brief description of the nature of each type, and (iii) the limits of the investment fund’s use of derivatives. (4) If the investment fund may depart temporarily from its fundamental investment objectives as a result of adverse market, economic, political or other considerations, disclose any temporary defensive tactics the investment fund’s portfolio adviser may use or intends to use in response to such conditions. (5) If the investment fund intends to enter into securities lending, repurchase or reverse repurchase transactions, briefly describe (a) how those transactions are or will be entered into in conjunction with other strategies and investments of the investment fund to achieve the investment fund’s investment objectives, (b) the types of those transactions to be entered into and give a brief description of the nature of each type, and (c) the limits of the investment fund’s entering into those transactions. (6) If the investment fund intends to sell securities short (a) state that the investment fund may sell securities short; and (b) briefly describe (i) the short selling process, and (ii) how short sales of securities are or will be entered into in conjunction with other strategies and investments of the investment fund to achieve the investment fund’s investment objectives. (7) In the case of an investment fund that borrows cash in accordance with subsection 2.6 (2) of Regulation 81-102 respecting Investment Funds, (a) state that the investment fund is permitted to borrow cash and the maximum amount the fund is permitted to borrow, and (b) briefly describe how borrowing will be used in conjunction with other strategies of the investment fund to achieve its investment objectives and the material terms of the borrowing arrangements.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 207 INSTRUCTIONS:
(1) For the purposes of Item 6.1(1)(b)(i), a fund must calculate its maximum total assets by aggregating the maximum value of its long positions, short positions and the maximum amount that may be borrowed. (2) For the purposes of the disclosure required by Item 6.1(1)(b)(ii), the term “specified derivative” has the same meaning as in Regulation 81-102 respecting Investment Funds. The description of an investment fund’s use of leverage under Item 6.1(1)(b)(ii) must provide investors with sufficient information to understand the magnitude of the market exposure of the investment fund as compared to the amount of money raised by the investment fund from investors.
6.2. Overview of the Investment Structure
(1) Under the sub-heading, “Overview of the Investment Structure”, describe, including a diagram for complex structures, the overall structure of the underlying investment or investments made or to be made by the investment fund, including any direct or indirect investment exposure. Include in the description and the diagram any counterparties under a forward or swap agreement entered into with the investment fund or its manager, the nature of the portfolio of securities being purchased by the investment fund, any indirect investment exposure that is related to the return of the investment fund and any collateral or guarantees given as part of the overall structure of the underlying investment or investments made by the investment fund. (2) If the securities distributed under the prospectus are being issued in connection with a restructuring transaction, describe by way of a diagram or otherwise the intercorporate relationships both before and after the completion of the proposed transaction. Item 7 Overview of the Sector(s) that the Fund Invests in
7.1. Sector(s) that the Fund Invests in
(1) Under the heading “Overview of the Sector[(s)] that the Fund Invests in”, if the investment fund invests or intends to invest in a specific sector(s), briefly describe the sector(s) that the investment fund has been or will be investing in. (2) Include in the description known material trends, events or uncertainties in the sector(s) that the investment fund invests or intends to invest in that might reasonably be expected to affect the investment fund.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 208
7.2 Significant Holdings in Other Entities
For a labour sponsored or venture capital fund, include in substantially the tabular form below, the following information as at a date within 30 days of the date of the prospectus with respect to each entity, 5% or more of whose securities of any class are beneficially owned directly or indirectly by the fund. Significant Holdings of the [name of the labour sponsored or venture capital fund] Name and Address of Entity Nature of Entities’ Principal Business Percentage of Securities of each Class Owned by Fund ---- ---- ---- Item 8 Investment Restrictions
8.1. Investment Restrictions
(1) Under the heading “Investment Restrictions”, describe any restrictions on investments adopted by the investment fund, beyond what is required under securities legislation. (2) If the investment fund has received the approval of the securities regulatory authorities to vary any of the investment restrictions and practices contained in securities legislation, provide details of the permitted variations. (3) Describe the nature of any securityholder or other approval that may be required in order to change the fundamental investment objectives and any of the material investment strategies to be used to achieve the investment objectives. Item 9 Management Discussion of Fund Performance
9.1. Management Discussion of Fund Performance
Unless the investment fund’s most recently filed management report of fund performance is incorporated by reference under Item 37 or attached to the prospectus under Item 38, provide, under the heading “Management Discussion of Fund Performance”, management’s discussion of fund performance in accordance with sections 2.3 to 6 of Part B of Form 81-106F1 of Regulation 81-106 respecting Investment Fund Continuous Disclosure (chapter V-1.1, r. 42) for the period covered by the financial statements required under Item 38. Item 10 Fees and Expenses
10.1. Fees and Expenses
Under the heading “Fees and Expenses”, set out information about all of the fees and expenses payable by the investment fund and by investors in the investment fund.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 209 INSTRUCTION:
Describe each fee paid by the investment fund and by the investor in this section separately. The description of fees must also include sales and trailing commissions paid either by the investment fund or the investor. Item 11 Annual Returns and Management Expense Ratio
11.1. Annual Returns, Management Expense Ratio and Trading Expense Ratio
For investment funds other than mutual funds, under the heading “Annual Returns, Management Expense Ratio and Trading Expense Ratio”, provide, in the following table, returns for each of the past 5 years, the management expense ratio for each of the past 5 years and the trading expense ratio for each of the past 5 years as disclosed in the most recently filed annual management report of fund performance of the investment fund:
[specify year]
[specify year]
[specify year]
[specify year]
[specify year]
Annual Returns
MER
TER
“MER” means management expense ratio based on management fees and operating expenses (excluding commissions and other portfolio transaction costs) expressed as an annualized percentage of daily average net asset value. “TER” means trading expense ratio and represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value. Item 12 Risk Factors
12.1. Risk Factors
(1) Under the heading “Risk Factors”, describe the risk factors material to the investment fund that a reasonable investor would consider relevant to an investment in the securities being distributed, such as the risks associated with any particular aspect of the fundamental investment objectives and investment strategies. (2) Include a discussion of general market, political, market sector, liquidity, interest rate, foreign currency, diversification, leverage, credit, legal and operational risks, as appropriate.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 210 (3) Include a brief discussion of general investment risks applicable to the investment fund, such as specific company developments, stock market conditions and general economic and financial conditions in those countries where the investments of the investment fund are listed for trading. (4) As applicable, describe the risks associated with the investment fund entering into (a) derivative transactions for non-hedging purposes, (b) securities lending, repurchase or reverse repurchase transactions; and (c) short sales of securities. (5) If there is a risk that purchasers of the securities distributed may become liable to make an additional contribution beyond the price of the security, disclose the risk. INSTRUCTIONS:
(1) Describe risks in the order of seriousness from the most serious to the least serious. (2) A risk factor must not be de-emphasized by including excessive caveats or conditions.
12.2. Investment Risk Classification Methodology
For an ETF,
(a) state in words substantially similar to the following:
“The investment risk level of this ETF is required to be determined in accordance with a standardized risk classification methodology that is based on the ETF’s historical volatility as measured by the 10-year standard deviation of the returns of the ETF.”; (b) if the ETF has less than 10 years of performance history and complies with Item 4 of Appendix F to Regulation 81 102 respecting Investment Funds, provide a brief description of the other fund or reference index, as applicable; if the other fund or reference index has been changed since the most recently filed prospectus, provide details of when and why the change was made; and (c) disclose that the standardized risk classification methodology used to identify the investment risk level of the ETF is available on request, at no cost, by calling [toll free/collect call telephone number] or by writing to [address].
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 211 Item 13 Distribution Policy
13.1. Distribution Policy
Under the heading “Distribution Policy”, describe the distribution policy, including (a) whether distributions are made by the investment fund in cash or reinvested in securities of the investment fund, (b) the targeted amount of any distributions, (c) whether the distributions are guaranteed or not, and (d) when the distributions are made. Item 14 Purchases of Securities
14.1. Purchases of Securities
(1) Under the heading “Purchases of Securities”, describe the procedure followed or to be followed by investors who desire to purchase securities of the investment fund or switch them for securities of other investment funds. (2) Describe how the issue price of the securities of the investment fund is determined. (3) Describe how the securities of the investment fund are distributed. If sales are effected through a principal distributor, give brief details of any arrangements with the principal distributor. (4) Describe all available purchase options and state, if applicable, that the choice of different purchase options requires the investor to pay different fees and expenses and if applicable, that the choice of different purchase options affects the amount of compensation paid to a dealer. (5) If applicable, disclose that a dealer may make provision in arrangements that it has with an investor that will require the investor to compensate the dealer for any losses suffered by the dealer in connection with a failed settlement of a purchase of securities of the investment fund caused by the investor. (6) If applicable, for an investment fund that is being sold on a best efforts basis, state whether the issue price will be fixed during the initial distribution period, and state when the investment fund will begin issuing securities at the net asset value of a security of the investment fund.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 212 Item 15 Redemption of Securities
15.1. Redemption of Securities
(1) Under the heading “Redemption of Securities”, describe how investors may redeem securities of the investment fund, including (a) the procedures followed, or to be followed, by an investor who desires to redeem securities of the investment fund and specifying the procedures to be followed and the documents to be delivered before a redemption order pertaining to securities of the investment fund will be accepted by the investment fund for processing and before payment of the proceeds of redemption will be made by the investment fund, (a.1) the dates on which securities of the investment fund will be redeemed, (a.2) the dates on which payment of the proceeds of redemption will be made by the investment fund, (b) how the redemption price of the securities is determined and, if applicable, state that the redemption price of the securities is based on the net asset value of a security of that class, or series of a class, next determined after the receipt by the investment fund of the redemption order, and (c) the circumstances under which the investment fund may suspend redemptions of the securities of the investment fund. (2) If the proceeds of redemption are computed by reference to the net asset value per security and amounts may be deducted from the net asset value per security, describe each amount that may be deducted and the entity to which each amount is paid. If there is a maximum amount or percentage that may be deducted from the net asset value per security, disclose that amount or percentage.
15.2. Short-term Trading
For an investment fund in continuous distribution, under the sub-heading "ShortTerm Trading", (a) describe the adverse effects, if any, that short-term trades in securities of the investment fund by an investor may have on other investors in the investment fund, (b) describe the restrictions, if any, that may be imposed by the investment fund to deter short-term trades, including the circumstances, if any, under which such restrictions may not apply,
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 213 (c) where the investment fund does not impose restrictions on short-term trades, state the specific basis for the view of the manager that it is appropriate for the investment fund not to do so, and (d) describe any arrangements, whether formal or informal, with any person, to permit short-term trades in securities of the investment fund, including the name of such person and the terms of such arrangements, including any restrictions imposed on the short-term trades and any compensation or other consideration received by the manager, the investment fund or any other party pursuant to such arrangements. INSTRUCTION For the disclosure required by section 15.2, include a brief description of the shortterm trading activities in the investment fund that are considered by the manager to be inappropriate or excessive. If the manager imposes a short-term trading fee, include a cross-reference to the disclosure provided under Item 10 of this Form. Item 16 Consolidated Capitalization
16.1. Consolidated Capitalization
(1) This section does not apply to an investment fund in continuous distribution. (2) Under the heading “Consolidated Capitalization”, describe any material change in, and the effect of the material change on, the share and loan capital of the investment fund, on a consolidated basis, since the date of the investment fund’s financial statements for its most recently completed financial period included in the prospectus, including any material change that will result from the issuance of the securities being distributed under the prospectus. Item 17 Prior Sales
17.1. Prior Sales
(1) Subsection (2) does not apply to an investment fund in continuous distribution. (2) Under the heading “Prior Sales”, for each class of securities of the investment fund distributed under the prospectus and for securities that are convertible into those classes of securities, state, for the 12-month period before the date of the prospectus, (a) the price at which the securities have been issued or are to be issued by the investment fund or selling securityholder, (b) the number of securities issued at that price, and (c) the date on which the securities were issued.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 214
17.2. Trading Price and Volume
(1) For each class of securities of the investment fund that is traded or quoted on a Canadian marketplace, identify the marketplace and the price ranges and volume traded or quoted on the Canadian marketplace on which the greatest volume of trading or quotation generally occurs. (2) If a class of securities of the investment fund is not traded or quoted on a Canadian marketplace but is traded or quoted on a foreign marketplace, identify the foreign marketplace and the price ranges and volume traded or quoted on the foreign marketplace on which the greatest volume or quotation generally occurs. (3) Provide the information required under subsections (1) and (2) on a monthly basis for each month or, if applicable, partial months of the 12-month period before the date of the prospectus. Item 18 Income Tax Considerations
18.1. Status of the Investment Fund
Under the heading “Income Tax Considerations” and under the sub-heading “Status of the Investment Fund”, briefly describe the status of the investment fund for income tax purposes. Also disclose whether the investment fund is eligible as an investment for registered retirement savings plans, registered retirement income plans, registered education savings plans or deferred profit sharing plans.
18.2. Taxation of the Investment Fund
Under the sub-heading “Taxation of the Investment Fund”, state in general terms the bases upon which the income and capital receipts of the investment fund are taxed.
18.3. Taxation of Securityholders
Under the sub-heading “Taxation of Securityholders”, state in general terms the income tax consequences to the holders of the securities offered of (a) any distribution to the securityholders in the form of income, capital, dividends or otherwise, including amounts reinvested in securities of the investment fund, (b) the redemption of securities, and (c) the issue of securities.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 215
18.4. Taxation of Registered Plans
Under the sub-heading “Taxation of Registered Plans”, explain the tax treatment applicable to securities of the investment fund held in a registered tax plan.
18.5. Tax Implications of the Investment Fund’s Distribution Policy
Under the sub-heading “Tax Implications of the Investment Fund’s Distribution Policy”, describe the impact of the investment fund’s distribution policy on a taxable investor who acquires securities of the investment fund late in a calendar year. Item 19 Organization and Management Details of the Investment Fund
19.1. Management of the Investment Fund
(1) Under the heading “Organization and Management Details of the Investment Fund” and under the sub-heading “Officers and Directors of the Investment Fund”, (a) list the name and municipality of residence of each director and executive officer of the investment fund and indicate their respective positions and offices held with the investment fund and their respective principal occupations during the 5 preceding years, (b) state the period or periods during which each director has served as a director and when his or her term of office will expire, (c) (paragraph revoked), (d) disclose the board committees of the investment fund and identify the members of each committee, (e) if the principal occupation of a director or executive officer of the investment fund is acting as an executive officer of a person other than the investment fund, disclose that fact and state the principal business of the person, and (f) for an investment fund that is a limited partnership, provide the information required by this subsection for the general partner of the investment fund, modified as appropriate. (2) Under the sub-heading “Cease Trade Orders and Bankruptcies”, if a director or executive officer of the investment fund is, as at the date of the prospectus or pro forma prospectus, as applicable, or was within 10 years before the date of the prospectus or pro forma prospectus, as applicable, a director, chief executive officer or chief financial officer of any other issuer, that:
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 216 (a) was subject to an order that was issued while the director or executive officer was acting in the capacity as director, chief executive officer or chief financial officer, or (b) was subject to an order that was issued after the director or executive officer ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer, state the fact and describe the basis on which the order was made and whether the order is still in effect. (3) For the purposes of subsection (2), “order” means any of the following, if in effect for a period of more than 30 consecutive days (a) a cease trade order, (b) an order similar to a cease trade order, or (c) an order that denied the relevant investment fund access to any exemption under securities legislation. (4) If a director or executive officer of the investment fund (a) is, as at the date of the prospectus or pro forma prospectus, as applicable, or has been within the 10 years before the date of the prospectus or pro forma prospectus, as applicable, a director or executive officer of any issuer that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets, state the fact, or (b) has, within the 10 years before the date of the prospectus or pro forma prospectus, as applicable, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the director or executive officer, state the fact. (5) Under the heading “Organization and Management Details of the Investment Fund” and under the sub-heading “Manager of the Investment Fund”, provide the complete municipal address of the manager and details of the manager of the investment fund, including the history and background of the manager and any overall investment strategy or approach used by the manager in connection with the investment fund.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 217 (6) Under the sub-heading “Duties and Services to be Provided by the Manager”, provide a description of the duties and services that the manager will be providing to the investment fund. (7) Under the sub-heading “Details of the Management Agreement”, provide a brief description of the essential details of any management agreement that the manager has entered into or will be entering into with the investment fund, including any termination rights. (8) Under the sub-heading “Officers and Directors of the Manager of the Investment Fund”, (a) list the name and municipality of residence of each partner, director and executive officer of the manager of the investment fund and indicate their respective positions and offices held with the manager and their respective principal occupations within the 5 preceding years, (b) if a partner, director or executive officer of the manager has held more than one office with the manager within the past 5 years, state only the current office held, and (c) if the principal occupation of a partner, director or executive officer of the manager is with an organization other than the manager of the investment fund, state the principal business in which the organization is engaged. (9) Under the sub-heading “Cease Trade Orders and Bankruptcies of the Manager”, provide the information required under subsections (2) and (4) for the directors and executive officers of the manager of the investment fund, modified as appropriate. (10) Under the heading “Ownership of Securities of the Investment Fund and of the Manager” disclose (a) the percentage of securities of each class or series of voting or equity securities owned of record or beneficially, in aggregate, by all the directors and executive officers of the investment fund (i) in the investment fund if the aggregate level of ownership exceeds 10%, (ii) in the manager, or (iii) in any person that provides services to the investment fund or the manager; and (b) the percentage of securities of each class or series of voting or equity securities owned of record or beneficially, in aggregate, by all the directors and executive officers of the manager of the investment fund
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 218 (i) in the investment fund if the aggregate level of ownership exceeds 10%, (ii) in the manager, or (iii) in any person that provides services to the investment fund or the manager; and (c) the percentage of securities of each class or series of voting or equity securities owned of record or beneficially, in aggregate, by all the independent review committee members of the investment fund (i) in the investment fund if the aggregate level of ownership exceeds 10%, (ii) in the manager, or (iii) in any person that provides services to the investment fund or the manager. (11) If the management functions of the investment fund are carried out by employees of the investment fund, disclose in respect of those employees the disclosure concerning executive compensation that is required to be provided for executive officers of an issuer under securities legislation. (12) Describe any arrangements under which compensation was paid or payable by the investment fund during the most recently completed financial year of the investment fund, for the services of directors of the investment fund, members of an independent board of governors or advisory board of the investment fund and members of the independent review committee of the investment fund, including the amounts paid, the name of the individual and any expenses reimbursed by the investment fund to the individual (a) in that capacity, including any additional amounts payable for committee participation or special assignments; and (b) as a consultant or expert. (13) For an investment fund that is a trust, describe the arrangements, including the amounts paid and expenses reimbursed, under which compensation was paid or payable by the investment fund during the most recently completed financial year of the investment fund for the services of the trustee or trustees of the investment fund.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 219 INSTRUCTIONS (1) The disclosure required by subsections (2) and (4) also applies to any personal holding companies of any of the persons referred to in subsections (2) and (4). (2) A management cease trade order which applies to directors and executive officers of the investment fund is an “order” for the purposes of paragraph (2)(a) and must be disclosed, whether or not the director, chief executive officer or chief financial officer was named in the order. (3) For the purposes of this section, a late filing fee, such as a filing fee that applies to the late filing of an insider report, is not a “penalty or sanction”. (4) The disclosure in paragraph (2)(a) only applies if the director or executive officer of the investment fund was a director, chief executive officer or chief financial officer when the order was issued against the relevant investment fund. The investment fund does not have to provide disclosure if the director or executive officer became a director, chief executive officer or chief financial officer after the order was issued. (5) The disclosure required under Item 19.1(11) regarding executive compensation for management functions carried out by employees of an investment fund must be made in accordance with the disclosure requirements of Form 51-102F6 of Regulation 51-102 respecting Continuous Disclosure Obligations (chapter V-1.1, r. 24).
19.2. Portfolio Adviser
(1) Under the sub-heading “Portfolio Adviser” (a) state the municipality and the province or country where the portfolio adviser principally provides its services to the investment fund and give details of the portfolio adviser of the investment fund, including the history and background of the portfolio adviser, (b) state the extent to which investment decisions are made by certain individuals employed by the portfolio adviser and whether those decisions are subject to the oversight, approval or ratification of a committee, and (c) state the name, title, and length of time of service of the person or persons employed by or associated with the portfolio adviser of the investment fund who is or are principally responsible for the day-to-day management of a material portion of the portfolio of the investment fund, implementing a particular material strategy or managing a particular segment of the portfolio of the investment fund, and each person’s business experience in the last 5 years. (2) Under the sub-heading “Details of the Portfolio Advisory Agreement”, provide a brief description of the essential details of any portfolio advisory agreement that the
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 220 portfolio adviser has entered into or will be entering into with the investment fund or the manager of the investment fund, including any termination rights.
19.2.1. Brokerage Arrangements
Under the sub-heading “Brokerage Arrangements”, (a) If any brokerage transactions involving the client brokerage commissions of the investment fund have been or might be directed to a dealer in return for the provision of any good or service, by the dealer or a third party, other than order execution, state (i) the process for, and factors considered in, selecting a dealer to effect securities transactions for the investment fund, including whether receiving goods or services in addition to order execution is a factor, and whether and how the process may differ for a dealer that is an affiliated entity; (ii) the nature of the arrangements under which order execution goods and services or research goods and services might be provided; (iii) each type of good or service, other than order execution, that might be provided; and (iv) the method by which the portfolio adviser makes a good faith determination that the investment fund, on whose behalf the portfolio adviser directs any brokerage transactions involving client brokerage commissions to a dealer in return for the provision of any order execution goods and services or research goods and services, by the dealer or a third party, receives reasonable benefit considering both the use of the goods or services and the amount of client brokerage commissions paid; (b) If any brokerage transactions involving the client brokerage commissions of the investment fund have been or might be directed to a dealer in return for the provision of any good or service, by the dealer or a third party, other than order execution, since the date of the investment fund’s last prospectus or last annual information form, whichever one is the most recent, state (i) each type of good or service, other than order execution, that has been provided to the manager or the portfolio adviser of the investment fund; and (ii) the name of any affiliated entity that provided any good or service referred to in subparagraph (i), separately identifying each affiliated entity and each type of good or service provided by each affiliated entity; and (c) If any brokerage transactions involving the client brokerage commissions of the investment fund have been or might be directed to a dealer in return for the provision of any good or service, by the dealer or a third party, other than order execution, state that the name of any other dealer or third party that provided a good or service referred
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 221 to in paragraph (b)(i), that was not disclosed under paragraph (b)(ii), will be provided upon request by contacting the investment fund or investment fund family at [insert telephone number] or at [insert investment fund or investment fund family e-mail address]. INSTRUCTIONS:
Terms defined in Regulation 23-102 respecting Use of Client Brokerage Commissions (chapter V-1.1, r. 7) have the same meaning where used in this Item.
19.3. Conflicts of Interest
Under the sub-heading “Conflicts of Interest”, disclose particulars of existing or potential material conflicts of interest between (1) the investment fund and a director or executive officer of the investment fund, (2) the investment fund and the manager or any director or executive officer of the manager of the investment fund, and (3) the investment fund and the portfolio adviser or any director or executive officer of the portfolio adviser of the investment fund.
19.4. Independent Review Committee
Under the sub-heading “Independent Review Committee”, provide a description of the independent review committee of the investment fund, including (a) the mandate and responsibilities of the independent review committee, (b) the composition of the independent review committee (including the names of its members), and the reasons for any change in its composition since the date of the most recently filed annual information form or prospectus of the investment fund, as applicable, (c) that the independent review committee prepares a report at least annually of its activities for securityholders which is available on the [investment fund’s/investment fund family’s] Web site at [insert investment fund’s Web site address], or at the securityholder’s request at no cost, by contacting the [investment fund/investment fund family] at [investment fund’s/investment fund family’s email address], and (d) the amount of fees and expenses payable in connection with the independent review committee by the investment fund, including any amounts payable for committee participation or special assignments, and state whether the investment fund pays all of the fees payable to the independent review committee.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 222
19.5. Trustee
Under the sub-heading “Trustee”, provide details of the trustee of the investment fund, including the municipality and the province or country where the trustee principally provides its services to the investment fund.
19.6. Custodian
(1) Under the sub-heading “Custodian”, state the name, municipality of the principal or head office, and nature of business of the custodian and any principal sub-custodian of the investment fund. (2) Describe generally the sub-custodial arrangements of the investment fund. INSTRUCTION:
A “principal sub-custodian” is a sub-custodian to whom custodial authority has been delegated in respect of a material portion or segment of the portfolio assets of the investment fund.
19.7. Auditor
Under the sub-heading “Auditor”, state the name and address of the auditor of the investment fund.
19.8. Transfer Agent and Registrar
Under the sub-heading, “Transfer Agent and Registrar”, for each class of securities, state the name of the investment fund’s transfer agent(s), registrar(s), trustee, or other agent appointed by the investment fund to maintain the securities register and the register of transfers for such securities and indicate the location (by municipalities) of each of the offices of the investment fund or transfer agent, registrar, trustee or other agent where the securities, register and register of transfers are maintained or transfers of securities are recorded.
19.9. Promoters
(1) For a person that is, or has been within the 2 years immediately preceding the date of the prospectus or pro forma prospectus, a promoter of the investment fund, state under the sub-heading “Promoter” (a) the person’s name and municipality and the province or country of residence,
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 223 (b) the number and percentage of each class of voting securities and equity securities of the investment fund beneficially owned, or controlled or directed, directly or indirectly, by the person, (c) the nature and amount of anything of value, including money, property, contracts, options or rights of any kind received or to be received by the promoter directly or indirectly from the investment fund, and the nature and amount of any assets, services or other consideration received or to be received by the investment fund or a subsidiary of the investment fund in return, and (d) for an asset acquired within the 2 years before the date of the preliminary prospectus or pro forma prospectus, or to be acquired, by the investment fund from a promoter, (i) the consideration paid or to be paid for the asset and the method by which the consideration has been or will be determined, (ii) the person making the determination referred to in subparagraph (i) and the person’s relationship with the investment fund, the promoter, or an affiliate of the investment fund or of the promoter, and (iii) the date that the asset was acquired by the promoter and the cost of the asset to the promoter. (2) If a promoter referred to in subsection (1) is, as at the date of the prospectus or pro forma prospectus, as applicable, or was within 10 years before the date of the prospectus or pro forma prospectus, as applicable, a director, chief executive officer or chief financial officer of any person, that (a) was subject to an order that was issued while the promoter was acting in the capacity as director, chief executive officer or chief financial officer, or (b) was subject to an order that was issued after the promoter ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while the promoter was acting in the capacity as director, chief executive officer or chief financial officer, state the fact and describe the basis on which the order was made and whether the order is still in effect. (3) For the purposes of subsection (2), “order” means any of the following, if in effect for a period of more than 30 consecutive days:
(a) a cease trade order,
(b) an order similar to a cease trade order, or
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 224 (c) an order that denied the relevant person access to any exemption under securities legislation. (4) If a promoter referred to in subsection (1) (a) is, as at the date of the prospectus or pro forma prospectus, as applicable, or has been within the 10 years before the date of the prospectus or pro forma prospectus, as applicable, a director or executive officer of any person that, while the promoter was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets, state the fact, or (b) has, within the 10 years before the date of the prospectus or pro forma prospectus, as applicable, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the promoter, state the fact. (5) Describe the penalties or sanctions imposed and the grounds on which they were imposed or the terms of the settlement agreement and the circumstances that gave rise to the settlement agreement, if a promoter referred to in subsection (1) has been subject to (a) any penalties or sanctions imposed by a court relating to provincial and territorial securities legislation or by a provincial and territorial securities regulatory authority or has entered into a settlement agreement with a provincial and territorial securities regulatory authority, or (b) any other penalties or sanctions imposed by a court or regulatory body that would be likely to be considered important to a reasonable investor in making an investment decision. (6) Despite subsection (5), no disclosure is required of a settlement agreement entered into before December 31, 2000 unless the disclosure would likely be considered to be important to a reasonable investor in making an investment decision. INSTRUCTIONS (1) The disclosure required by subsections (2), (4) and (5) also applies to any personal holding companies of any of the persons referred to in subsections (2), (4), and (5). (2) A management cease trade order which applies to a promoter referred to in subsection (1) is an “order” for the purposes of paragraph (2)(a) and must be disclosed,
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 225 whether or not the director, chief executive officer or chief financial officer was named in the order. (3) For the purposes of this section, a late filing fee, such as a filing fee that applies to the late filing of an insider report, is not a “penalty or sanction”. (4) The disclosure in paragraph (2)(a) only applies if the promoter was a director, chief executive officer or chief financial officer when the order was issued against the person. The investment fund does not have to provide disclosure if the promoter became a director, chief executive officer or chief financial officer after the order was issued.
19.10. Principal Distributor
(1) If applicable, state the name and address of the principal distributor of the investment fund. (2) Describe the circumstances under which any agreement with the principal distributor of the investment fund may be terminated and include a brief description of the essential terms of this agreement.
19.11. Securities Lending Agent
(1) Under the sub-heading “Securities Lending Agent”, state the name of each securities lending agent of the investment fund and the municipality of each securities lending agent’s principal or head office. (2) State whether any securities lending agent of the investment fund is an affiliate or associate of the manager of the investment fund. (3) Briefly describe the essential terms of each agreement with each securities lending agent. Include the amount of collateral required to be delivered in connection with a securities lending transaction, as a percentage of the market value of the loaned securities, and briefly describe any indemnities provided in, and the termination provisions of, each such agreement.
19.12. Lender
(1) State the name of each person that has entered into an agreement to lend money to the investment fund or provides a line of credit or similar lending arrangement to the investment fund. (2) State whether the person named in subsection (1) is an affiliate or associate of the manager of the investment fund.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 226 Item 20 Calculation of Net Asset Value
20.1. Calculation of Net Asset Value
Under the heading “Calculation of Net Asset Value”, (a) describe how the net asset value of the investment fund is calculated, and (b) state the frequency at which the net asset value is calculated and the date and time of day at which it is calculated.
20.2. Valuation Policies and Procedures
Under the sub-heading “Valuation Policies and Procedures of the Investment Fund”, (a) describe the methods used to value the various types or classes of assets of the investment fund and its liabilities for the purpose of calculating net asset value; (a.1) If the valuation principles and practices established by the manager differ from Canadian GAAP, describe the differences; and (b) if the manager has discretion to deviate from the investment fund's valuation practices described in paragraph (a), disclose when and to what extent that discretion may be exercised and, if it has been exercised in the past 3 years, provide an example of how it has been exercised or, if it has not been exercised in the past 3 years, so state.
20.3. Reporting of Net Asset Value
Under the sub-heading “Reporting of Net Asset Value”, describe (a) how the net asset value and net asset value per security of the investment fund will be made available at no cost (e.g. website, toll-free telephone line, etc.), and (b) the frequency at which the net asset value and net asset value per security is disclosed. Item 21 Description of the Securities Distributed
21.1. Equity Securities
If equity securities of the investment fund are being distributed, under the heading “Attributes of the Securities” and under the sub-heading “Description of the Securities Distributed” state the description or the designation of the class of equity securities distributed and describe all material attributes and characteristics, including
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 227 (a) dividend or distribution rights, (b) voting rights, (c) rights upon dissolution, termination or winding-up, (d) pre emptive rights, (e) conversion or exchange rights, (f) redemption, retraction, purchase for cancellation or surrender provisions, (g) sinking or purchase fund provisions, (h) provisions permitting or restricting the issuance of additional securities and any other material restrictions, and (i) provisions requiring a securityholder to contribute additional capital.
21.2. Debt Securities
If debt securities are being distributed, under the heading “Attributes of the Securities” and under the sub-heading “Description of the Securities Distributed”, describe all material attributes and characteristics of the indebtedness and the security, if any, for the debt, including (a) provisions for interest rate, maturity and premium, if any, (b) conversion or exchange rights, (c) redemption, retraction, purchase for cancellation or surrender provisions, (d) sinking or purchase fund provisions, (e) the nature and priority of any security for the debt securities, briefly identifying the principal properties subject to lien or charge, (f) provisions permitting or restricting the issuance of additional securities, the incurring of additional indebtedness and other material negative covenants, including restrictions against payment of distributions and restrictions against giving security on the assets of the investment fund, and provisions as to the release or substitution of assets securing the debt securities, (g) the name of the trustee under any indenture relating to the debt securities and the nature of any material relationship between the trustee or any of its affiliates and the investment fund or any of its affiliates, and
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 228 (h) any financial arrangements between the investment fund and any of its affiliates or among its affiliates that could affect the security for the indebtedness.
21.3. (Revoked)
21.4. Other Securities
If securities other than the securities mentioned above are being distributed, under the heading “Attributes of the Securities” and under the sub-heading “Description of the Securities Distributed”, describe fully the material attributes and characteristics of those securities.
21.5. Special Warrants
If the prospectus is used to qualify the distribution of securities issued upon the exercise of special warrants or other securities acquired on a prospectus-exempt basis, disclose that holders of such securities have been provided with a contractual right of rescission and provide the following disclosure in the prospectus, with the bracketed information completed:
“The issuer has granted to each holder of a special warrant a contractual right of rescission of the prospectus-exempt transaction under which the special warrant was initially acquired. The contractual right of rescission provides that if a holder of a special warrant who acquires another security of the issuer on exercise of the special warrant as provided for in the prospectus is, or becomes, entitled under the securities legislation of a jurisdiction to the remedy of rescission because of the prospectus or an amendment to the prospectus containing a misrepresentation, (a) the holder is entitled to rescission of both the holder’s exercise of its special warrant and the private placement transaction under which the special warrant was initially acquired, (b) the holder is entitled in connection with the rescission to a full refund of all consideration paid to the underwriter or issuer, as the case may be, on the acquisition of the special warrant, and (c) if the holder is a permitted assignee of the interest of the original special warrant subscriber, the holder is entitled to exercise the rights of rescission and refund as if the holder was the original subscriber.” INSTRUCTION If the prospectus is qualifying the distribution of securities issued upon the exercise of securities other than special warrants, replace the term “special warrant” with the type of the security being distributed.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 229
21.6. Restricted Securities
(1) If the investment fund has outstanding, or proposes to distribute under a prospectus, restricted securities, subject securities or securities that are, directly or indirectly, convertible into or exercisable or exchangeable for restricted securities or subject securities, provide a detailed description of (a) the voting rights attached to the restricted securities that are the subject of the distribution or that will result from the distribution, either directly or following a conversion, exchange or exercise, and the voting rights, if any, attached to the securities of any other class of securities of the investment fund that are the same as or greater than, on a per security basis, those attached to the restricted securities, (b) any significant provisions under applicable corporate and securities law that do not apply to the holders of the restricted securities that are the subject of the distribution or that will result from the distribution, either directly or following a conversion, exchange or exercise, but do apply to the holders of another class of equity securities, and the extent of any rights provided in the constating documents or otherwise for the protection of holders of the restricted securities, (c) any rights under applicable corporate law, in the constating documents or otherwise, of holders of restricted securities that are the subject of the distribution or that will result from the distribution, either directly or following a conversion, exchange or exercise, to attend, in person or by proxy, meetings of holders of equity securities of the investment fund and to speak at the meetings to the same extent that holders of equity securities are entitled, and (d) how the investment fund complied with, or the basis upon which it was exempt from, the requirements of Part 12 of the Regulation. (2) If holders of restricted securities do not have all of the rights referred to in subsection (1), the detailed description referred to in that subsection must include, in boldface type, a statement of the rights the holders do not have. (3) If the investment fund is required to include the disclosure referred to in subsection (1), state the percentage of the aggregate voting rights attached to the investment fund’s securities that will be represented by restricted securities after effect has been given to the issuance of the securities being offered.
21.7. Modification of Terms
(1) Describe provisions about the modification, amendment or variation of any rights attached to the securities being distributed.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 230 (2) If the rights of holders of securities may be modified otherwise than in accordance with the provisions attached to the securities or the provisions of the governing statute relating to the securities, explain briefly.
21.8. Ratings
(1) If the investment fund has asked for and received a credit rating, or if the investment fund is aware that it has received any other kind of rating, including a stability rating or a provisional rating, from one or more credit rating organizations for securities of the investment fund that are outstanding, or will be outstanding, and the rating or ratings continue in effect, disclose (a) each rating received from a credit rating organization; (b) for each rating disclosed under paragraph (a), the name of the credit rating organization that has assigned the rating; (c) a definition or description of the category in which each credit rating organization rated the securities and the relative rank of each rating within the organization’s overall classification system; (d) an explanation of what the rating addresses and what attributes, if any, of the securities are not addressed by the rating; (e) any factors or considerations identified by the credit rating organization as giving rise to unusual risks associated with the securities; (f) a statement that a credit rating or a stability rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the credit rating organization; and (g) any announcement made by, or any proposed announcement known to the investment fund that is to be made by, a credit rating organization to the effect that the organization is reviewing or intends to revise or withdraw a rating previously assigned and required to be disclosed under this section. (2) If payments were, or reasonably will be, made to a credit rating organization that provided a rating described in subsection (1), state that fact and state whether any payments were made to the credit rating organization in respect of any other service provided to the investment fund by the credit rating organization during the last 2 years. INSTRUCTIONS There may be factors relating to a security that are not addressed by a credit rating organization when they give a rating. For example, in the case of cash settled derivative instruments, factors in addition to the creditworthiness of the issuer, such as the continued
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 231 subsistence of the underlying interest or the volatility of the price, value or level of the underlying interest may be reflected in the rating analysis. Rather than being addressed in the rating itself, these factors may be described by a credit rating organization by way of a superscript or other notation to a rating. Any such attributes must be discussed in the disclosure under this section. A provisional rating received before the investment fund’s most recently completed financial year is not required to be disclosed under this section.
21.9. Other Attributes
(1) If the rights attaching to the securities being distributed are materially limited or qualified by the rights of any other class of securities, or if any other class of securities ranks ahead of or equally with the securities being distributed, include information about the other securities that will enable investors to understand the rights attaching to the securities being distributed. (2) If securities of the class being distributed may be partially redeemed or repurchased, state the manner of selecting the securities to be redeemed or repurchased. INSTRUCTION This section requires only a brief summary of the provisions that are material from an investment standpoint. The provisions attaching to the securities being distributed or any other class of securities do not need to be set out in full. They may, in the investment fund’s discretion, be attached as a schedule to the prospectus. Item 22 Securityholder Matters
22.1. Meetings of Securityholders
Under the heading “Securityholder Matters” and under the sub-heading “Meetings of Securityholders”, describe the circumstances, processes and procedures for holding any securityholder meeting and for any extraordinary resolution.
22.2. Matters Requiring Securityholder Approval
Under the sub-heading “Matters Requiring Securityholder Approval”, describe the matters that require securityholder approval.
22.3. Amendments to Declaration of Trust
For an investment fund established pursuant to a declaration of trust, under the sub-heading “Amendments to the Declaration of Trust”, describe the circumstances, processes and procedures required to amend the declaration of trust.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 232
22.4. Reporting to Securityholders
Under the sub-heading “Reporting to Securityholders” describe the information or reports that will be delivered or made available to securityholders and the frequency with which such information or reports will be delivered or made available to securityholders, including any requirements under securities legislation. Item 23 Termination of the Fund
23.1. Termination of the Fund
Under the heading “Termination of the Fund”, describe the circumstances in which the investment fund will be terminated, including:
(a) the date of termination,
(b) how the value of the securities of the investment fund at termination will be determined, (c) whether securityholders will receive cash or any other type of payment upon termination, (d) the details of any rollover transaction, if securityholders will receive securities of another investment fund as part of a rollover transaction upon termination, (e) how the assets of the investment fund will be distributed upon termination, and (f) if the investment fund is an alternative mutual fund, disclose whether the investment fund will be wound up without the approval of securityholders if the net asset value per security falls below a certain predetermined level, and, if so, the net asset value per security at which this will occur. Item 24 Use of Proceeds
24.1. Application
This Item does not apply to an investment fund in continuous distribution.
24.2. Proceeds
(1) Under the heading “Use of Proceeds”, state the estimated net proceeds to be received by the investment fund or selling securityholder or, in the case of a non-fixed price distribution or a distribution to be made on a best efforts basis, the minimum amount, if any, of net proceeds to be received by the investment fund or selling securityholder from the sale of the securities distributed.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 233 (2) Describe in reasonable detail and, if appropriate, using tabular form, each of the principal purposes, with approximate amounts, for which the net proceeds will be used by the investment fund. (3) If the prospectus is used for a special warrant or similar transaction, state the amount that has been received by the issuer of the special warrants or similar securities on the sale of the special warrants or similar securities.
24.3. Other Sources of Funding
If any material amounts of other funds are to be used in conjunction with the proceeds, state the amounts and sources of the other funds.
24.4. Financing by Special Warrants, etc.
(1) If the prospectus is used to qualify the distribution of securities issued upon the exercise of special warrants or the exercise of other securities acquired on a prospectusexempt basis, describe the principal purposes for which the proceeds of the prospectusexempt financing were used or are to be used. (2) If all or a portion of the funds have been spent, explain how the funds were spent. Item 25 Plan of Distribution
25.1. Plan of Distribution
Under the heading “Plan of Distribution”, briefly describe the plan of distribution.
25.2. Name of Underwriters
(1) If the securities are being distributed by an underwriter, state the name of the underwriter and describe briefly the nature of the underwriter’s obligation to take up and pay for the securities. (2) Disclose the date by which the underwriter is obligated to purchase the securities.
25.3. Disclosure of Conditions to Underwriters’ Obligations
If securities are distributed by an underwriter that has agreed to purchase all of the securities at a specified price and the underwriter’s obligations are subject to conditions, (a) include a statement in substantially the following form, with the bracketed information completed and with modifications necessary to reflect the terms of the distribution:
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 234 “Under an agreement dated [insert date of agreement] between [insert name of investment fund or selling securityholder] and [insert name(s) of underwriter(s)], as underwriter[s], [insert name of investment fund or selling securityholder] has agreed to sell and the underwriter[s] [has/have] agreed to purchase on [insert closing date] the securities at a price of [insert offering price], payable in cash to [insert name of investment fund or selling securityholder] against delivery. The obligations of the underwriter[s] under the agreement may be terminated at [its/their] discretion on the basis of [its/their] assessment of the state of the financial markets and may also be terminated upon the occurrence of certain stated events. The underwriter[s] [is/are], however, obligated to take up and pay for all of the securities if any of the securities are purchased under the agreement.”, and (b) describe any other conditions and indicate any information known that is relevant to whether such conditions will be satisfied.
25.4. Best Efforts Offering
Outline briefly the plan of distribution of any securities being distributed other than on the basis described in section 25.3.
25.5. Minimum Distribution
If securities are being distributed on a best efforts basis and minimum funds are to be raised, state (a) the minimum funds to be raised, (b) that the investment fund must appoint a registered dealer authorized to make the distribution, a Canadian financial institution, or a lawyer who is a practising member in good standing with a law society of a jurisdiction in which the securities are being distributed, or a notary in Québec, to hold in trust all funds received from subscriptions until the minimum amount of funds stipulated in paragraph (a) has been raised, and (c) that if the minimum amount of funds is not raised within the distribution period, the trustee must return the funds to the subscribers without any deductions.
25.6. Determination of Price
Disclose the method by which the distribution price has been or will be determined and, if estimates have been provided, explain the process of determining the estimates.
25.7. Stabilization
If the investment fund, a selling securityholder or an underwriter knows or has reason to believe that there is an intention to over-allot or that the price of any security
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 235 may be stabilized to facilitate the distribution of the securities, describe the nature of these transactions, including the anticipated size of any over-allocation position, and explain how the transactions are expected to affect the price of the securities.
25.8. Reduced Price Distributions
If the underwriter may decrease the offering price after the underwriter has made a reasonable effort to sell all of the securities at the initial offering price disclosed in the prospectus in accordance with the procedures permitted by the Regulation and Regulation 81-102 respecting Investment Funds, disclose this fact and that the compensation realised by the underwriter will be decreased by the amount that the aggregate price paid by purchasers for the securities is less than the gross proceeds paid by the underwriter to the investment fund or selling securityholder.
25.9. Listing Application
If application has been made to list or quote the securities being distributed, include a statement, in substantially the following form, with the bracketed information completed:
“The investment fund has applied to [list/quote] the securities distributed under this prospectus on [name of exchange or other market]. [Listing/Quotation] will be subject to the investment fund fulfilling all the listing requirements of [name of exchange or other market].”
25.10. Conditional Listing Approval
If application has been made to list or quote the securities being distributed on an exchange or marketplace and conditional listing approval has been received, include a statement, in substantially the following form, with the bracketed information completed:
“[name of exchange or marketplace] has conditionally approved the [listing/quotation] of these securities. [Listing/Quotation] is subject to the [name of investment fund]’s fulfilling all of the requirements of the [name of exchange or marketplace] on or before [date], [including distribution of these securities to a minimum number of public securityholders].”
25.11. Constraints
If there are constraints imposed on the ownership of securities of the investment fund to ensure that the investment fund has a required level of Canadian ownership, describe the mechanism, if any, by which the level of Canadian ownership of the securities of the investment fund will be monitored and maintained.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 236
25.12. Special Warrants Acquired by Underwriters or Agents
Disclose the number and dollar value of any special warrants acquired by any underwriter or agent and the percentage of the distribution represented by those special warrants. Item 26 Relationship between Investment Fund or Selling Securityholder and Underwriter
26.1. Relationship between Investment Fund or Selling Securityholder and
Underwriter
(1) Under the heading “Relationship between Investment Fund [or Selling Securityholder] and Underwriter”, if the investment fund or selling securityholder is a connected issuer or related issuer of an underwriter of the distribution, or if the selling securityholder is also an underwriter, comply with the requirements of Regulation 33-105 respecting Underwriting Conflicts. (2) For the purposes of subsection (1), “connected issuer” and “related issuer” have the same meanings as in Regulation 33-105 respecting Underwriting Conflicts. Item 27 (Revoked) Item 28 Principal Holders of Securities of the Investment Fund and Selling Securityholders
28.1. Principal Holders of Securities of the Investment Fund and Selling
Securityholders
(1) Under the heading “Principal Holders of Securities of the Investment Fund [and Selling Securityholders]”, provide the following information for each principal securityholder of the investment fund, if known or if ought to be known by the investment fund or the manager and, if any securities are being distributed for the account of a securityholder, for each selling securityholder, as of a specified date not more than 30 days before the date of the prospectus or pro forma prospectus, as applicable:
(a) the name,
(b) the number or amount of securities owned, controlled or directed of the class being distributed, (c) the number or amount of securities of the class being distributed for the account of the securityholder,
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 237 (d) the number or amount of securities of the investment fund of any class to be owned, controlled or directed after the distribution, and the percentage that number or amount represents of the total outstanding, and (e) whether the securities referred to in paragraphs (b), (c) or (d) are owned both of record and beneficially, of record only, or beneficially only. (2) If securities are being distributed in connection with a restructuring transaction, indicate, to the extent known, the holdings of each person described in paragraph (1)(a) that will exist after effect has been given to the transaction. (3) If any of the securities being distributed are being distributed for the account of a securityholder and those securities were purchased by the selling securityholder within the 2 years preceding the date of the prospectus or pro forma prospectus, as applicable, state the date the selling securityholder acquired the securities and, if the securities were acquired in the 12 months preceding the date of the prospectus or pro forma prospectus, as applicable, the cost to the securityholder in the aggregate and on an average cost-persecurity basis. (4) If, to the knowledge of the investment fund or the underwriter of the securities being distributed, more than 10% of any class of voting securities of the investment fund is held, or is to be held, subject to any voting trust or other similar agreement, disclose, to the extent known, the designation of the securities, the number or amount of the securities held or to be held subject to the agreement and the duration of the agreement. State the names and addresses of the voting trustees and outline briefly their voting rights and other powers under the agreement. (5) If, to the knowledge of the investment fund or the underwriter of the securities being distributed, any principal securityholder or selling securityholder is an associate or affiliate of another person named as a principal securityholder, disclose, to the extent known, the material facts of the relationship, including any basis for influence over the investment fund held by the person other than the holding of voting securities of the investment fund. (6) In addition to the above, include in a footnote to the table the required calculation(s) on a fully-diluted basis. (7) Describe any material change to the information required to be included in the prospectus under subsection (1) to the date of the prospectus. INSTRUCTION If a company, partnership, trust or other unincorporated entity is a principal securityholder of an investment fund, disclose, to the extent known, the name of each individual who, through ownership of or control or direction over the securities of the
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 238 company, trust or other unincorporated entity, or membership in the partnership, as the case may be, is a principal securityholder of that entity. Item 29 Interests of Management and Others in Material Transactions
29.1. Interests of Management and Others in Material Transactions
Under the heading “Interests of Management and Others in Material Transactions”, describe, and state the approximate amount of, any material interest, direct or indirect, of any of the following persons in any transaction within the 3 years before the date of the prospectus or pro forma prospectus that has materially affected or is reasonably expected to materially affect the investment fund:
(a) a director or executive officer of the investment fund or the investment fund manager, (b) a person that beneficially owns, or controls or directs, directly or indirectly, more than 10% of any class or series of the outstanding voting securities of the investment fund or the investment fund manager, and (c) an associate or affiliate of any of the persons referred to in paragraphs (a) or (b).
29.2. Underwriting Discounts
Disclose any material underwriting discounts or commissions upon the sale of securities by the investment fund if any of the persons listed under section 29.1 were or are to be an underwriter or are associates, affiliates or partners of a person that was or is to be an underwriter. INSTRUCTIONS (1) The materiality of an interest is to be determined on the basis of the significance of the information to investors in light of all the circumstances of the particular case. The importance of the interest to the person having the interest, the relationship of the parties to the transaction with each other and the amount involved are among the factors to be considered in determining the significance of the information to investors. (2) Give a brief description of the material transaction. Include the name of each person whose interest in any transaction is described and the nature of the relationship to the investment fund. (3) For any transaction involving the purchase of assets by or sale of assets to the investment fund, state the cost of the assets to the purchaser, and the cost of the assets to the seller if acquired by the seller within 3 years before the transaction.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 239 (4) This Item does not apply to any interest arising from the ownership of securities of the investment fund if the securityholder receives no extra or special benefit or advantage not shared on an equal basis by all other holders of the same class of securities or all other holders of the same class of securities who are resident in Canada. (5) No information need be given under this Item for a transaction if (a) the rates or charges involved in the transaction are fixed by law or determined by competitive bids, (b) the interest of a specified person in the transaction is solely that of a director of another company that is a party to the transaction, (c) the transaction involves services as a bank or other depository of funds, a transfer agent, registrar, trustee under a trust indenture or other similar services, or (d) the transaction does not involve remuneration for services and the interest of the specified person arose from the beneficial ownership, direct or indirect, of less than 10% of any class of equity securities of another company that is party to the transaction and the transaction is in the ordinary course of business of the investment fund. (6) Describe all transactions not excluded above that involve remuneration (including an issuance of securities), directly or indirectly, to any of the specified persons for services in any capacity unless the interest of the person arises solely from the beneficial ownership, direct or indirect, of less than 10% of any class of equity securities of another company furnishing the services to the investment fund. Item 30 Proxy Voting Disclosure
30.1. Proxy Voting Disclosure for Portfolio Securities Held
Under the heading “Proxy Voting Disclosure for Portfolio Securities Held”, include the disclosure required by subsection 10.2(3) of Regulation 81-106 respecting Investment Fund Continuous Disclosure. Item 31 Material Contracts
31.1. Material Contracts
Under the heading “Material Contracts”, list and provide particulars of (a) the articles of incorporation, the declaration of trust or trust agreement of the investment fund or any other constating document, if any, (b) any agreement of the investment fund or trustee with the manager of the investment fund,
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 240 (c) any agreement of the investment fund, the manager or trustee with the portfolio adviser of the investment fund, (d) any agreement of the investment fund, the manager or trustee with the custodian of the investment fund, (e) any agreement of the investment fund, the manager or trustee with the underwriters or agents of the investment fund, (f) any swap or forward agreement of the investment fund, the manager or trustee with a counterparty that is material to the investment fund fulfilling its investment objectives, (g) any agreement of the investment fund, the manager or trustee with the principal distributor of the investment fund, and (h) any other contract or agreement that can reasonably be regarded as material to an investor in the securities of the investment fund. INSTRUCTIONS (1) Set out a complete list of all contracts for which particulars must be given under this section, indicating those that are disclosed elsewhere in the prospectus. Particulars need only be provided for those contracts that do not have the particulars given elsewhere in the prospectus. (2) Particulars of contracts must include the dates of, parties to, consideration provided for in, termination provisions, general nature and key terms of, the contracts. Item 32 Legal and Administrative Proceedings
32.1. Legal and Administrative Proceedings
Under the heading “Legal and Administrative Proceedings”, describe briefly any ongoing legal and administrative proceedings material to the investment fund, to which the investment fund, its manager or principal distributor is a party.
32.2. Particulars of the Proceedings
(1) For all matters disclosed under section 32.1, disclose (a) the name of the court or agency having jurisdiction, (b) the date on which the proceeding was instituted,
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 241 (c) the principal parties to the proceeding, (d) the nature of the proceeding and, if applicable, the amount claimed, and (e) whether the proceeding is being contested and the present status of the proceeding. (2) Provide similar disclosure about any proceedings known to be contemplated.
32.3. Penalties and Sanctions
Describe the penalties or sanctions imposed and the grounds on which they were imposed or the terms of any settlement agreement and the circumstances that gave rise to the settlement agreement, if, within the 10 years before the date of the prospectus or pro forma prospectus, the manager of the investment fund, a director or executive officer of the investment fund or a partner, director or executive officer of the manager of the investment fund has (a) been subject to any penalties or sanctions imposed by a court or a securities regulatory authority relating to Canadian securities legislation, promotion or management of an investment fund, theft or fraud or has entered into a settlement agreement before a court or with a regulatory body in relation to any of these matters, or (b) been subject to any other penalties or sanctions imposed by a court or regulatory body or has entered into any other settlement agreement before a court or with a regulatory body that would likely be considered important to a reasonable investor in determining whether to purchase securities of the investment fund. Item 33 Experts
33.1. Names of Experts
Under the heading “Experts”, name each person (a) who is named as having prepared or certified a report, valuation, statement or opinion in the prospectus or an amendment to the prospectus, and (b) whose profession or business gives authority to the report, valuation, statement or opinion made by the person.
33.2. Interests of Experts
(1) Disclose all registered or beneficial interests, direct or indirect, in any securities or other property of the investment fund or of an associate or affiliate of the investment fund received or to be received by a person whose profession or business gives authority to a statement made by the person and who is named as having prepared or certified a part
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 242 of the prospectus or prepared or certified a report or valuation described or included in the prospectus. (2) For the purpose of subsection (1), if the ownership is less than 1%, a general statement to that effect is sufficient. (3) If a person, or a director, officer or employee of a person referred to in subsection (1) is or is expected to be elected, appointed or employed as a director, officer or employee of the investment fund or of any associate or affiliate of the investment fund, disclose the fact or expectation. (4) Despite subsection (1), an auditor who is independent in accordance with the auditor’s rules of professional conduct in a jurisdiction of Canada or has performed an audit in accordance with US GAAS is not required to provide the disclosure in subsection (1) if there is disclosure that the auditor is independent in accordance with the auditor’s rules of professional conduct in a jurisdiction of Canada or that the auditor has complied with the SEC’s rules on auditor independence. INSTRUCTIONS (1) Section 33.2 does not apply to the investment fund’s predecessor auditors, if any, for those periods when they were not the investment fund’s auditor. (2) Section 33.2 does not apply to registered or beneficial interests, direct or indirect, held through mutual funds. Item 34 Exemptions and Approvals
34.1. Exemptions and Approvals
Under the heading “Exemptions and Approvals”, describe all exemptions from or approvals under securities legislation obtained by the investment fund or the manager of the investment fund that continue to be relied upon by the investment fund or the manager, including all exemptions to be evidenced by the issuance of a receipt for the prospectus pursuant to section 19.3 of the Regulation. Item 35 Other Material Facts
35.1. Other Material Facts
Under the heading “Other Material Facts”, using sub-headings as appropriate, give particulars of any material facts about the securities being distributed that are not disclosed under any other section and are necessary in order for the prospectus to contain full, true and plain disclosure of all material facts relating to the securities to be distributed.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 243 Item 36 Purchasers’ Statutory Rights of Withdrawal and Rescission
36.1. General
For investment funds other than mutual funds, under the heading “Purchasers’ Statutory Rights of Withdrawal and Rescission” include a statement in substantially the following form, with bracketed information completed:
“Securities legislation in [certain of the provinces [and territories] of Canada/the Province of [insert name of local jurisdiction, if applicable]] provides purchasers with the right to withdraw from an agreement to purchase securities. This right may be exercised within 2 business days after receipt or deemed receipt of a prospectus and any amendment. [In several of the provinces/provinces and territories], [T/t]he securities legislation further provides a purchaser with remedies for rescission [or [, in some jurisdictions,] revisions of the price or damages] if the prospectus and any amendment contains a misrepresentation or is not delivered to the purchaser, provided that the remedies for rescission [, revisions of the price or damages] are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province [or territory]. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province [or territory] for the particulars of these rights or consult with a legal adviser.”
36.2. Mutual Funds
For an investment fund that is a mutual fund, other than an ETF, under the heading “Purchasers’ Statutory Rights of Withdrawal and Rescission”, state in words substantially similar to the following:
“Securities legislation in [certain of the provinces [and territories] of Canada/the Province of [insert name of local jurisdiction, if applicable]] provides purchasers with the right to withdraw from an agreement to purchase mutual fund securities within 2 business days after receipt of a prospectus and any amendment or within 48 hours after the receipt of a confirmation of a purchase of such securities. If the agreement is to purchase such securities under a contractual plan, the time period during which withdrawal may be made may be longer. [In several of the provinces/provinces and territories], [T/t]he securities legislation further provides a purchaser with remedies for rescission [or [, in some jurisdictions,] revisions of the price or damages] if the prospectus and any amendment contains a misrepresentation or is not delivered to the purchaser, provided that the remedies for rescission [, revisions of the price or damages] are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province [or territory]. The purchaser should refer to the applicable provisions of the securities legislation of the province [or territory] for the particulars of these rights or should consult with a legal adviser.”.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 244
36.2.1. Exchange-traded Mutual Funds
For an investment fund that is an ETF, under the heading “Purchasers’ Statutory Rights of Rescission”, state in words substantially similar to the following:
“Securities legislation in [certain of the provinces [and territories] of Canada/the Province of [insert name of local jurisdiction, if applicable]] provides purchasers with the right to withdraw from an agreement to purchase ETF securities within 48 hours after the receipt of a confirmation of a purchase of such securities. [In several of the provinces/provinces and territories], [T/t]he securities legislation further provides a purchaser with remedies for rescission [or [, in some jurisdictions,] revisions of the price or damages] if the prospectus and any amendment contains a misrepresentation, or nondelivery of the ETF Facts, provided that the remedies for rescission [, revisions of the price or damages] are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province [or territory]. The purchaser should refer to the applicable provisions of the securities legislation of the province [or territory] for the particulars of these rights or should consult with a legal adviser.”.
36.3. Non-fixed Price Offerings
In the case of a non-fixed price offering, if applicable in the jurisdiction in which the prospectus is filed, replace the second sentence in the disclosure in section 36.1 with a statement in substantially the following form:
“This right may only be exercised within 2 business days after receipt or deemed receipt of a prospectus and any amendment, irrespective of the determination at a later date of the purchase price of the securities distributed.” Item 37 Documents Incorporated by Reference
37.1. Mandatory Incorporation by Reference
If the investment fund is in continuous distribution, incorporate by reference the following documents in the prospectus, by means of the following statement in substantially the following words under the heading “Documents Incorporated by Reference”:
“Additional information about the fund is available in the following documents:
- The most recently filed ETF Facts for each class or series of securities of
the ETF, filed either concurrently with or after the date of the prospectus. [insert if applicable]
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 245
2. The most recently filed comparative annual financial statements of the
investment fund, together with the accompanying report of the auditor.
3. Any interim financial reports of the investment fund filed after those annual
financial statements.
4. The most recently filed annual management report of fund performance of
the investment fund.
5. Any interim management report of fund performance of the investment fund
filed after that annual management report of fund performance.
These documents are incorporated by reference into the prospectus, which means that they legally form part of this document just as if they were printed as part of this document. You can get a copy of these documents, at your request, and at no cost, by calling [toll-free/collect] [insert the toll-free telephone number or telephone number where collect calls are accepted] or from your dealer. [If applicable] These documents are available on the [investment fund’s/investment fund family’s] Internet site at [insert investment fund’s Internet site address], or by contacting the [investment fund/investment fund family] at [insert investment fund’s /investment fund family’s email address]. These documents and other information about the fund are available on the Internet at www.sedar.com.”.
37.2. Mandatory Incorporation by Reference of Future Documents
If the investment fund is in continuous distribution, state that any documents, of the type described in section 37.1, if filed by the investment fund after the date of the prospectus and before the termination of the distribution, are deemed to be incorporated by reference in the prospectus. Item 38 Financial Disclosure
38.1. Financial Statements
(1) Unless incorporated by reference under Item 37, include in the prospectus the comparative annual financial statements and the auditor’s report prepared in accordance with Regulation 81-106 respecting Investment Fund Continuous Disclosure for the investment fund’s most recently completed financial year. (2) If an investment fund’s most recent financial year ended within 90 days of the date of the prospectus referred to in subsection (1), the investment fund may treat the previous year as the most recently completed financial year under subsection (1).
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 246 (3) If the investment fund has not completed its first financial year, the fund must include in the prospectus audited financial statements and the auditor’s report prepared in accordance with Regulation 81-106 respecting Investment Fund Continuous Disclosure for the period from the date of the fund’s formation to a date not more than 90 days before the date of the prospectus and as at a date not more than 90 days before the date of the prospectus, as applicable. (4) Despite subsections (1) and (3), if the investment fund is a newly established fund, include in the prospectus the opening statement of financial position of the investment fund, accompanied by the auditor’s report prepared in accordance with Regulation 81- 106 respecting Investment Fund Continuous Disclosure.
38.2. Interim Financial Reports
Unless incorporated by reference under Item 37, include in the prospectus financial statements for the investment fund prepared in accordance with Regulation 81-106 respecting Investment Fund Continuous Disclosure for the interim period that began immediately after the financial year to which the annual financial statements required to be included in the prospectus under section 38.1 relate, if the prospectus is filed 60 days or more after the end of that interim period.
38.3. Management Reports of Fund Performance
Unless incorporated by reference under Item 37, include in the prospectus the most recently filed interim management report of fund performance, if filed after the most recently filed annual management report of fund performance and include the most recently filed annual management report of fund performance. Item 39 Certificates
39.1. Certificate of the Investment Fund
Include a certificate of the investment fund in the following form:
“This prospectus [,together with the documents incorporated herein by reference,] constitutes full, true and plain disclosure of all material facts relating to the securities offered by this prospectus as required by the securities legislation of [insert the jurisdictions in which qualified].”
39.2. Certificate of the Manager
Include a certificate of the manager of the investment fund in the same form as the certificate of the investment fund.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 247
39.3. Certificate of the Underwriter
Where a person is required to provide a certificate in the underwriter certificate form, the certificate must state:
“To the best of our knowledge, information and belief, this prospectus [,together with the documents incorporated herein by reference,] constitutes full, true and plain disclosure of all material facts relating to the securities offered by this prospectus as required by the securities legislation of [insert the jurisdictions in which qualified].”
39.4. Certificate of the Promoter
If there is a promoter of the investment fund, include a certificate in the same form as the certificate of the investment fund.
39.5. Amendments
(1) For an amendment to a prospectus that does not restate the prospectus, change “prospectus” to “prospectus dated [insert date] as amended by this amendment” wherever it appears in the statements in sections 39.1 to 39.4. (2) For an amended and restated prospectus, change “prospectus” to “amended and restated prospectus” wherever it appears in the statements in sections 39.1 to 39.4.
39.6. Non-offering Prospectus
For a non-offering prospectus, change “securities offered by this prospectus” to “securities previously issued by the investment fund” wherever it appears in the statements in sections 39.1 to 39.4. _______________ M.O. 2008-05, Sch. 41-101F2; M.O. 2008-13, s. 1; M.O. 2010-09, s. 12; M.O. 2012-05, s. 2; M.O. 2012-07, s. 2; M.O. 2013-03, s. 14; M.O. 2013-08, s. 17; M.O. 2013-24, s. 1; M.O. 2014-05, s. 2 et 3; M.O. 2018-07, s. 2.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 248 FORM 41-101F3 INFORMATION REQUIRED IN A SCHOLARSHIP PLAN PROSPECTUS General Instructions (1) This Form describes the disclosure required in a scholarship plan prospectus. Each Item of this Form outlines disclosure requirements. Instructions as to how to complete this Form are printed in italic type. (2) The objective of the scholarship plan prospectus is to provide information about the scholarship plan that an investor needs in order to make an informed investment decision. This Form sets out specific disclosure requirements that are in addition to the general requirement under securities legislation to provide full, true and plain disclosure of all material facts relating to the securities to be distributed. (3) Terms defined in Regulation 14-101 respecting Definitions (chapter V-1.1, r. 3), Regulation 41-101 respecting General Prospectus Requirements (chapter V-1.1, r. 14), Regulation 81-105 respecting Mutual Fund Sales Practices (chapter V-1.1,r. 41), Regulation 81-106 respecting Investment Fund Continuous Disclosure (chapter V-1.1, r. 42) or Regulation 81-107 respecting Independent Review Committee for Investment Funds (chapter V-1.1, r. 42) and used in this Form have the same meanings that they have in those regulations except that references in those regulations to “mutual fund” must be read as references to “investment fund” or “scholarship plan” as the context requires. (4) A scholarship plan prospectus must contain only the information that is mandated or permitted under this Form. (5) A scholarship plan prospectus must present the information in each Part of this Form briefly and concisely, in the order provided for by this Form, and use only the headings and sub-headings stipulated in this Form except that sub-headings not required by this Form may be used where permitted under an Item in this Form. (6) Specific instructions are sometimes provided in this Form for a single prospectus and a multiple prospectus. Portions of Part B and Part D of this Form generally refer to disclosure required for “a scholarship plan” in a “prospectus”. This disclosure must be modified as appropriate to reflect multiple scholarship plans covered by a multiple prospectus. (7) Regulation 41-101 respecting General Prospectus Requirements requires that a prospectus be prepared using plain language and in a format that assists in readability and comprehension. For additional guidance, see the plain language principles listed in
section 4.1 of Policy Statement to Regulation 41-101 respecting General Prospectus
Requirements. If the use of technical terms is required, clear and concise explanations of those terms must be included.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 249 (8) Respond as simply and directly to the requirements of this Form as is reasonably possible. (9) No reference need be made to inapplicable items and, unless otherwise required in this Form, negative answers to items may be omitted. (10) Certain Items in this Form require that a prospectus include wording that is the same or substantially the same as set out in those Items. A scholarship plan may modify the prescribed wording to more accurately reflect its features if the wording does not apply to the plan. (11) Unless otherwise stated, this Form does not mandate the use of a specific font size or style but the font used must be legible. If the prospectus is made available online, information must be presented in a way that is both readable online and can be printed in a readable format. (12) A prospectus may contain photographs and artwork only if they are relevant to the business of the scholarship plan or members of the organization of the scholarship plan and are not misleading. (13) A prospectus must not contain design elements (e.g., graphics, photos, artwork) that would, to a reasonable person, detract from the information disclosed in the document. (14) If disclosure is required as of a specific date and there has been a material change or a change that is otherwise significant to a reasonable investor to the required information subsequent to that date, present the information as of the date of the change or a date subsequent to the change. Contents of a Scholarship Plan Prospectus (15) This Form permits two formats: a prospectus for a single scholarship plan and a multiple prospectus for multiple scholarship plans. (16) A scholarship plan prospectus must consist of 4 parts as set out below. Part A is the Plan Summary. Parts B, C and D are collectively the Detailed Plan Disclosure. The Plan Summary and the Detailed Plan Disclosure together form the scholarship plan prospectus. The 4 parts may be further described as follows:
(a) Part A contains the responses to the Items in Part A of this Form. The information in this Part contains a summary of key information about investing in a scholarship plan. (b) Part B contains the responses to the Items in Part B of this Form and contains introductory information about the scholarship plan and general information about the scholarship plan family.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 250 (c) Part C contains the responses to the Items in Part C of the Form and contains plan-specific information about the scholarship plan(s) offered in the prospectus. (d) Part D contains the responses to the Items in Part D of this Form and contains information about the scholarship plan organization, the persons and entities involved in running the scholarship plan, and the prospectus certificates. Consolidation of Scholarship Plan Prospectuses into a Multiple Prospectus (17) Section 3A.2 of the Regulation 41-101 respecting General Prospectus Requirements requires that a scholarship plan prospectus must not be consolidated with one or more scholarship plan prospectuses to form a multiple prospectus unless the disclosure in each of the Part B and Part D sections of this Form is substantially similar for each scholarship plan. This provision permits a scholarship plan organization to create a document that contains the disclosure for a number of scholarship plans in the same family. (18) Similar to a single prospectus, a multiple prospectus must consist of 4 segments:
(a) The first segment consists of a number of Part A sections of this Form. Each
Part A section must contain the information required under Part A of this Form about a
single scholarship plan. The information required by the Part A section must be disclosed separately for each scholarship plan in the multiple prospectus. Each Part A section in a multiple prospectus must start on a new page. (b) The second segment contains the information required under Part B of this Form for the scholarship plans described in the document. There must not be more than one Part B section for all of the scholarship plans in the prospectus. (c) The third segment consists of a number of Part C sections of this Form. Each Part C section must contain the information required under Part C of this Form about a single scholarship plan. The information required by the Part C section must be disclosed separately for each scholarship plan in the multiple prospectus. Each Part C
section in a multiple prospectus must start on a new page.
(d) The fourth segment contains the information required under Part D of the Form for the scholarship plans described in the document. There must not be more than one Part D section for all of the scholarship plans in the prospectus.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 251
Part A – Plan Summary for a Scholarship Plan
Item 1 Information about the Plan
Include at the top of a new page a heading consisting of (a) the title “Plan Summary”, (b) the name of the scholarship plan to which the Plan Summary pertains and, if the scholarship plan has more than one class or series of securities, the name of the class or series of securities covered in the Plan Summary, (c) the type of scholarship plan, (d) the name of the investment fund manager of the scholarship plan, and (e) the date of the Plan Summary. INSTRUCTIONS (1) The title “Plan Summary” and the name of the scholarship plan must be in bold type using a substantially larger font size than the other headings and text in the Plan Summary. (2) The “type of scholarship plan” refers to whether the scholarship plan is a group scholarship plan, individual or family scholarship plan. (3) The date for a Plan Summary that is filed as part of a preliminary scholarship plan prospectus or scholarship plan prospectus must be the date of the certificate of the scholarship plan required under Part D of this Form. Item 2 Withdrawal and Cancellation Rights Immediately following the disclosure in Item 1, state the following using the same or substantially similar wording, with the last 2 sentences in bold type:
This summary tells you some key things about investing in the plan. You should read this Plan Summary and the Detailed Plan Disclosure carefully before you decide to invest. If you change your mind You have up to 60 days after signing your contract to withdraw from your plan and get back all of your money.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 252 If you (or we) cancel your plan after 60 days, you’ll get back your contributions, less sales charges and fees. You will lose the earnings on your money. Your government grants will be returned to the government. Keep in mind that you pay sales charges up front. If you cancel your plan in the first few years, you could end up with much less than you put in. INSTRUCTION The prescribed wording in this Item must be presented using a substantially larger font size relative to the rest of the text of the Plan Summary. Item 3 Description of the Scholarship Plan (1) Under the heading “What is the [insert type of scholarship plan] scholarship plan?”, state the following using the same or substantially similar wording:
The [insert name of plan] is a [insert type of plan] scholarship plan designed to help you save for a child’s post-secondary education. When you open your [insert name of plan], we will apply to the Canada Revenue Agency to register the plan as a Registered Education Savings Plan (RESP). This allows your savings to grow tax-free until the child named as the beneficiary of the plan enrols in their studies. The Government of Canada and some provincial governments offer government grants to help you save even more. To register your plan as an RESP, we need social insurance numbers for yourself and the child you name in the plan as the beneficiary. In a [insert type of plan] scholarship plan, you are part of a group of investors. Everyone’s contributions are invested together. When the plan matures, each child in the group shares in the earnings on that money. Your share of those earnings plus your government grant money is paid to your child as educational assistance payments (EAPs). There are 2 main exceptions. Your child will not receive EAPs, and you could lose your earnings, government grants and grant contribution room, if:
- your child does not enrol in a school or program that qualifies under this
plan, or - you leave the plan before it matures.
(2) For a group scholarship plan, state the following using the same or substantially similar wording, in bold type:
If you leave the plan, your earnings go to the remaining members of the group. However, if you stay in the plan until it matures, you might share in the earnings of those who left early.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 253 INSTRUCTION If the scholarship plan allows a subscriber to name more than one beneficiary at a time, amend the wording in section (1) to refer to multiple children or beneficiaries. Item 4 Suitability (1) For a group scholarship plan, under the heading “Who is this plan for?”, state the following using the same or substantially similar wording:
A group scholarship plan can be a long-term commitment. It is for investors planning to save for a child’s post-secondary education and who are fairly sure that:
- they can make all their contributions on time
- they will stay in the plan until it matures
- their child will attend a qualifying school and program under the plan
[Insert, for plan providers that also offer an individual or family scholarship plan - If this doesn’t describe you, you should consider another type of plan. For example, an individual or family plan has fewer restrictions. See the Plan Summar[y/ies] for our [insert as applicable – individual plan/family plan/ individual and family plans] or pages [insert applicable page references] in the Detailed Plan Disclosure for more information.] (2) For an individual or family scholarship plan, under the heading “Who is this plan for?”, state the following using the same or substantially similar wording:
[Insert, as applicable – An individual/ A family] scholarship plan is for investors planning to save for a child’s post-secondary education and who are fairly sure that: - Insert, for family plans only - they want to save for more than one child at a
time - they want more flexibility over when and how much to contribute to their
plan - Insert, for individual plans only - their child will attend a qualifying school
and program under the plan - Insert, for family plans only - one or more of their children will attend a
qualifying school or program under the plan
[Insert, for plan providers that also offer a group scholarship plan - The [insert name of plan] generally has fewer restrictions and is more flexible than our group scholarship plan.]
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 254 Item 5 The Plan’s Investments Under the heading “What does the plan invest in?”, state the following using the same or substantially similar wording:
The plan invests mainly in [specify the plan’s primary investments]. The plan’s investments have some risk. Returns will vary from year to year. INSTRUCTION The disclosure must state the type or types of securities, such as mortgages, bonds, government treasury bills, or equity securities, as applicable, in which the plan will be primarily invested under normal market conditions. Item 6 Contributions (1) For a group scholarship plan, under the heading “How do I make contributions?”, state the following using the same or substantially similar wording:
With your contributions, you buy one or more “units” of the plan. These units represent your share of the plan. You may pay for them all at once, or you may make [state the most common contribution frequency options] contributions. You may change the amount of your contribution as long as you make the minimum contribution permitted under the plan. You may also change your contribution
schedule after you’ve opened your plan. [Insert if applicable – A fee applies.] All of the
different contribution options for the plan are described in the Detailed Plan Disclosure, or you can ask your sales representative for more information. (2) For an individual or family scholarship plan, under the heading “How do I make contributions?”, briefly describe how a subscriber can make contributions to their scholarship plan. (3) State (i) the minimum total investment and (ii) the minimum amount per contribution, permitted under the scholarship plan’s rules. INSTRUCTIONS (1) The disclosure regarding contribution frequency options in the first paragraph of subsection (1) of Item 6 must make reference only to the most commonly selected contribution options, and not to each contribution option that is available to a subscriber. (2) If the individual or family scholarship plan uses the concept of “units” or has prescribed schedules for making contributions, this fact must be described in the required
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 255 disclosure for subsection (2) of Item 6, using wording that is similar to the wording in subsection (1) of Item 6. (3) For the purposes of the disclosure required under subsection (3) of Item 6, the “minimum total investment permitted under the scholarship plan’s rules” must be stated as (i) a dollar amount or ( ii) a quantity of units or securities of the scholarship plan (if applicable) and the “minimum amount per contribution under the plan’s rules” must be stated as a dollar amount. Item 7 Payments (1) Under the heading “What can I expect to receive from the plan?”, state the following using the same or substantially similar wording:
In your child’s first year of college or university, you’ll get back your contributions, less fees. You can have this money paid to you or directly to your child. (2) For a group scholarship plan, state the following using the same or substantially similar wording:
Your child will be eligible to receive EAPs in their [state, as applicable - first, second, third and fourth] year[s] of post-secondary education. [See instruction (1)] For each year, your child must show proof they are enrolled in a school and program that qualifies under this plan to get an EAP. (3) For an individual or family scholarship plan, briefly describe when EAPs can be paid to a beneficiary, and whether EAPs can be paid in one year or must be paid in instalments for each year of eligible studies. (4) State the following, in a separate paragraph:
EAPs are taxed in the child’s hands.
INSTRUCTIONS
(1) If the group scholarship plan has multiple options for paying EAPs, disclose the other options in the disclosure in subsection (2) of Item 7, using a similar format. (2) For the disclosure in subsection (3) of Item 7, the format set out for the disclosure in section (2) must be used. Item 8 Risks (1) Under the heading “What are the risks?”, state the following using the same or substantially similar wording:
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 256 If you do not meet the terms of the plan, you could lose some or all of your investment. Your child may not receive their EAPs. (2) For a group scholarship plan, state the following using the same or substantially similar wording:
You should be aware of 5 things that could result in a loss:
- You leave the plan before the maturity date. People leave the plan for
many reasons. For example, if their financial situation changes and they can’t afford their contributions. If your plan is cancelled more than 60 days from signing your contract, you’ll lose part of your contributions to sales charges and fees. You’ll also lose the earnings on your investment and your government grants will be returned to the government. - You miss contributions. If you want to stay in the plan, you’ll have to make
up the contributions you missed. You’ll also have to make up what the contributions would have earned if you had made them on time. This could be costly. If you have difficulty making contributions, you have options. You can reduce or suspend your contributions, transfer to another of our plans or to an RESP offered by a different provider, or cancel your plan. Restrictions and fees apply. Some options will result in a loss of earnings and government grants. [Insert if applicable - If you miss a contribution and don’t take any action within [insert the number of months] months, we may cancel your plan]. - You miss or your child misses a deadline. This can limit your options
later on. You could also lose the earnings on your investment. Two of the key deadlines for this plan are:
- Maturity date – the deadline for making changes to your plan
You have until the maturity date to make changes to your plan. This includes switching the plan to a different child, changing the maturity date if your child wants to start their program sooner or later than expected, and transferring to another RESP. Restrictions and fees apply. - [Insert date] - the EAP application deadline
If your child qualifies for an EAP, he or she must apply by [insert date] before each year of eligible studies to receive a payment for that year. Otherwise, your child may lose this money.
- Your child doesn’t go to a qualifying school or program. For example,
[State the types of programs or institutions that generally do not qualify for EAPs under the plan] don’t qualify for EAPs under this plan. [Insert, if applicable –Under this plan, fewer programs will qualify for an EAP than would otherwise qualify under the
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 257 government’s rules for RESPs. See the Detailed Plan Disclosure for more information.] If your child will not be going to a qualifying school or program under this plan, you have the option to name another child as beneficiary, transfer to another of our plans or to an RESP offered by a different provider, or cancel your plan. Restrictions and fees apply. Some options can result in a loss of earnings and government grants.
5. Your child doesn’t complete their program. Your child may lose some or
all of their EAPs if he or she takes time off from their studies, does not complete all required courses in a year or changes programs. [Insert if applicable - In some cases, your child may be able to defer an EAP for up to [insert number of years] year[s]]. [Insert, if applicable - Deferrals are at our discretion.] (3) For an individual or family scholarship plan, list no more than 5 situations that could result in a loss of earnings in the scholarship plan for subscribers or EAPs for the beneficiary. Briefly describe the losses that could result in these outcomes as well as some options to mitigate this loss. (4) State the following, in bold type:
If any of these situations arise with your plan, contact us or speak with your sales representative to better understand your options to reduce your risk of loss. INSTRUCTIONS (1) For an individual or family scholarship plan, the disclosure required in subsection (3) of Item 8 must include the following situations: a subscriber leaving a scholarship plan before it matures, a beneficiary failing to enrol in a qualifying school or program, and the subscriber or beneficiary failing to meet the scholarship plan’s key deadlines. (2) If the individual or family scholarship plan uses the concept of units paid for under a fixed contribution schedule, or otherwise requires subscribers to follow a prescribed
schedule for making contributions to the scholarship plan, the disclosure required in
subsection (3) of Item 8 must also include a situation in which a subscriber misses one or more contributions. (3) The disclosure in subsection (3) of Item 8 must use a similar format and structure as the disclosure required for group scholarship plans in section (2). Item 9 Cancellation Rate For a group scholarship plan, using the margin of the page, add a sidebar under the heading “What are the risks?”, and state the following using the same or substantially similar wording with the title of the sidebar in bold type:
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 258 Cancellation Rate Of the last 5 beneficiary groups of the [insert name of group scholarship plan] plan to reach maturity, an average of [see the Instructions]% of the plans in each group were cancelled before their maturity date. INSTRUCTIONS (1) To calculate the average percentage as required under Item 9, do the following:
(a) for each of the last 5 beneficiary groups in the group scholarship plan to reach maturity, calculate the percentage of scholarship plans in the beneficiary group that were cancelled before their maturity date, and (b) calculate the simple average of the 5 percentages calculated pursuant to Instruction 1(a). (2) For a beneficiary group referred to in Instruction (1)(a), calculate the percentage of the scholarship plans in each beneficiary group that were cancelled before their maturity date by dividing x by y, where x = the number of scholarship plans with the same maturity date that were cancelled before maturity, and y = the total number of scholarship plans with the same maturity date, including plans with the same maturity date that were cancelled before maturity. (3) For the purposes of the disclosure required under Item 9, a “plan that was cancelled before maturity” is a scholarship plan that is not eligible to receive a share of the EAP account as at the maturity date because the total contributions required by the subscriber’s contract have not been made by the maturity date. The number of scholarship plans with the same maturity date that did not reach maturity will be the difference between the total number of scholarship plans with the same maturity date and the number of scholarship plans that matured. (4) Subject to Instruction (6), the number of scholarship plans with the same maturity date consists of every scholarship plan sold to subscribers who selected the same maturity date, including scholarship plans that were cancelled or transferred before maturity. (5) For the purposes of calculating the percentage of scholarship plans in a beneficiary group that were cancelled before maturity, a scholarship plan whose subscriber changed the maturity date to an earlier date is considered to have the earlier maturity date and must be included in the calculations for the beneficiary group with the earlier maturity date. Similarly, a scholarship plan whose subscriber changed the maturity date to a later
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 259 date is considered to have the later maturity date and must be included in the calculations for the beneficiary group with the later maturity date. (6) Do not include a plan in the calculation of x or y under Instruction (2) if the subscriber withdrew from their scholarship plan within 60 days of the signing the contract to open the scholarship plan and received back all of their contributions and fees paid. Item 10 Costs (1) Under the heading “How much does it cost?”, provide information, in the form of the following tables, about the fees and expenses of the scholarship plan. Introduce the tables using the following wording or wording that is the same or substantially similar:
There are costs for joining and participating in the plan. The following tables show the fees and expenses of the plan. [Insert, if applicable - The fees and expenses of this plan are different than the other plans we offer.] Fees you pay These fees are deducted from the money you put in the plan. They reduce the amount that gets invested in your plan, which will reduce the amount available for EAPs. Fees the plan pays You don’t pay these fees directly. They’re paid from the plan’s earnings. These fees affect you because they reduce the plan’s returns, which reduces the amount available for EAPs. Fee What you pay What the fee is for Who the fee is paid to Sales charge [Specify amount] This is the commission for selling your plan [Insert name of entity] Account maintenance fee [Specify amount] [Specify the purpose of the fee] [Insert name of entity] [Insert if applicable - Insurance Premium] [Specify amount] This is for insurance that makes sure your contributions continue if you die or become totally disabled. [Insert name of entity]
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 260 Fee What the plan pays What the fee is for Who the fee is paid to Administrative fee [Specify amount] This is for operating your plan. [insert name of entity] Portfolio management fee [Specify amount] This is for managing the plan’s investments. [insert name of entity] Custodian fee [Specify amount] This is for holding the plan’s investments in trust. [Insert name of entity] Independent review committee [Specify amount] This is for the services of the plan’s independent review committee. The committee reviews conflict of interest matters between the investment fund manager and the plan. [Insert name of entity] (2) If the sales charge listed in the “Fees you pay” table required by subsection (1) is deducted from contributions at a higher rate in the early period of participating in the scholarship plan, add a sidebar under the heading “How much does it cost”, using the margin of the page adjacent to the table titled “Fees you pay”, and state the following using the same or substantially similar wording with the title of the sidebar in bold type:
Paying off the sales charge
If, for example, you buy one unit of the plan on behalf of your newborn child, and you commit to paying for that unit by making monthly contributions until your plan’s maturity date, then, based on how the sales charge is deducted from your contributions, it will take [insert number of months] months to pay off the sales charge. During this time, [insert percentage]% of your contributions will be invested in the plan. (3) Using the margin of the page adjacent to the table titled “Fees the plan pays” , add a sidebar under the heading “How much does it cost?”, and state the following using the same or substantially similar wording with the title of the sidebar in bold:
Other fees
Other fees apply if you make changes to your plan. See page [specify page number] in the Detailed Plan Disclosure for details.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 261 INSTRUCTIONS (1) The tables must only summarize the most common fees that (i) all subscribers to the scholarship plan are required to pay or (ii) the scholarship plan is required to pay, as applicable. Do not include the entire list of fees required to be disclosed under Items 14.2 and 14.3 of Part C of the Form, or any of the fees required to be disclosed under Item
14.4 and 14.5 of Part C of the Form. Each fee must be listed in a separate row of the
applicable table.
(2) If there are certain types of fees listed in the tables required under Item 10 above that are not payable, either by subscribers or the scholarship plan, in respect of the scholarship plan described in the Plan Summary, amend the tables as is necessary to reflect that fact. (3) If certain fees listed in the tables required under Item 10 above are normally combined into a single fee payable by either the subscriber or the scholarship plan as applicable, the tables may be amended as is necessary to accurately reflect that fact. (4) State the amount of each fee listed in the tables. In the table titled “Fees you pay” state the amount(s) in the column titled “What you pay”. In the table titled “Fees the plan pays” state the amount(s) in the column titled “What the plan pays”. The amount of each fee must be disclosed based on how the fee is calculated. For example, if a particular fee is calculated as a fixed dollar amount per unit, or a fixed amount per year, it must be stated as such. Similarly, if a fee is calculated as a percentage of the scholarship plan’s assets, that percentage must be stated. A statement or note that a fee is subject to applicable taxes, such as goods and services taxes or harmonized sales taxes, is permitted, if applicable. (5) For a group scholarship plan or other type of scholarship plan that normally calculates the sales charge payable as a fixed dollar amount linked to the amount of contribution by a subscriber (i.e. x.x x$ per unit), in addition to stating the fixed amount of sales charge per unit as required under Instruction (3), the disclosure of the amount of the sales charge in the table titled “Fees you pay” in the column titled “What you pay” must also be expressed as a percentage of the cost of a unit of the scholarship plan. If the total cost of a unit of the scholarship plan varies depending on the contribution option or frequency selected, the percentage sales charge must be expressed as a range, between the lowest and the highest percentage of the unit cost the sales charge can represent, based on the different contribution options available to subscribers under the scholarship plan. This must be calculated as follows: (i) divide the sales charge per unit by the contribution option that has the highest total cost per unit, and (ii) divide the sales charge per unit by the contribution option that has the lowest total cost per unit. For example, if a scholarship plan calculates its sales charge as $200/unit, and the total cost per unit for a subscriber can range from $1000 to $5000 (based on the different options available to subscribers), the percentage range of the sales charge disclosed in the table would be 4% (200/5000) to 20% (200/1000). The disclosure in the table must also state that the exact percentage of the sales charge per unit for a subscriber will depend on the
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 262 contribution option selected for contributing to the scholarship plan and how old their beneficiary is at the time they open the scholarship plan. (6) For the table titled “Fees you pay”, in the column titled “”What you pay” describe how the fee is deducted from contributions if the amount deducted from each contribution is not the same. For example, if deductions for sales charges are not made from each contribution at a constant rate for the duration of a subscriber’s investment in the scholarship plan or the duration for which contributions are required to be made if it is less than the scholarship plan’s duration, describe the amounts from contributions that are deducted for sales charges. (7) In both tables, in the column titled “What the fee is for” provide a concise explanation of what the fee is used for, using the same or substantially similar wording provided above in the tables. (8) In both tables, in the column titled “Who the fee is paid to”, state the name of the entity to which the fee is paid, e.g. the investment fund manager, the portfolio manager, the principal distributor or dealer, the foundation, etc. (9) For the table titled “Fees the plan pays”, the independent review committee fee must be disclosed as the total dollar amount paid in connection with the independent review committee for the most recently completed financial year of the scholarship plan. (10) Disclosure of insurance premiums in the “Fees you pay” table is permitted only if the scholarship plan requires a subscriber to purchase insurance coverage in a jurisdiction in which the scholarship plan’s securities are being distributed. If the scholarship plan’s rules only require insurance coverage to be purchased by subscribers in some, but not all jurisdictions in which the scholarship plan’s securities are distributed, then include disclosure stating the jurisdictions in which the scholarship plan requires subscribers to purchase insurance, under the heading titled “What the fee is for” in that
table.
(11) The disclosure required under subsection (2) of Item 10 must be based on the following assumptions: (i) the beneficiary is a newborn, (ii) the subscriber is purchasing one unit of the scholarship plan, (iii) the subscriber has agreed to a monthly contribution
schedule with contributions payable until the scholarship plan’s maturity date, and (iv) all
of the mandatory fees that are normally deducted from a subscriber’s contributions are deducted during the relevant period. (12) For the disclosure required in subsection (2) of Item 10, if the scholarship plan does not offer units but uses a similar method for deducting sales charges as is described under subsection (2) of Item 10, the wording may be amended as is necessary to properly reflect the scholarship plan’s features.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 263 (13) The “Other fees” sidebar required under subsection (3) of Item 10 refers to fees for specific transactions, such as changing a beneficiary, that are described in the table titled “Transaction Fees” in Item 14.4 of Part C of the Form. Item 11 Guarantees Under the heading “Are there any guarantees?”, state the following using the same or substantially similar wording:
We cannot tell you in advance if your child will qualify to receive any payments from the plan or how much your child will receive. We do not guarantee the amount of any payments or that the payments will cover the full cost of your child’s post-secondary education. Unlike bank accounts or GICs, investments in scholarship plans are not covered by the Canada Deposit Insurance Corporation or any other government insurer. Item 12 For More Information (1) Under the sub-heading “For more information”, state the following using the same or substantially similar wording:
The Detailed Plan Disclosure delivered with this Plan Summary contains further details about this plan, and we recommend you read it. You may also contact [insert name of investment fund manager] or your sales representative for more information about this plan. (2) State the name, address and toll-free telephone number of the investment fund manager of the plan and, if applicable, state the e-mail address and website of the investment fund manager of the plan.
Part B – Detailed Plan Disclosure - General Information
Item 1 Cover Page Disclosure
1.1. Preliminary Prospectus Disclosure
A preliminary prospectus must have printed in red ink and in italics at the top of the cover page of the Detailed Plan Disclosure immediately above the disclosure required in
section 1.2 the following:
A copy of this preliminary prospectus has been filed with the securities regulatory authorit[y/ies] in [insert, as applicable the names of the provinces and territories of Canada] but has not yet become final for the purpose of the sale of securities. Information contained in this preliminary prospectus may not be complete and may have to be
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 264 amended. The securities may not be sold until a receipt for the prospectus is obtained from the securities regulatory authorit[y/ies]. INSTRUCTION A scholarship plan must complete the bracketed information by:
(a) inserting the names of each jurisdiction in which the scholarship plan intends to offer securities under the prospectus, (b) stating that the filing has been made in each of the provinces of Canada or each of the provinces and territories of Canada, or (c) identifying the filing jurisdictions by exception (i.e., every province of Canada or every province and territory of Canada, except [insert excluded jurisdictions]).
1.2. Required Statement
State in italics at the top of the cover page the following:
No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise.
1.3. Basic Disclosure about the Distribution
(1) State the following immediately below the disclosure required under sections 1.1 and 1.2:
[Insert as applicable – PRELIMINARY/ PRO FORMA] PROSPECTUS CONTINUOUS OFFERING DETAILED PLAN DISCLOSURE [Insert Date] [Insert Name of Scholarship Plan(s)] [State the type of securities qualified for distribution under the prospectus, and the price per security or minimum subscription amount] (2) State the following:
[Insert, as applicable - This/These] investment fund[s] [insert, as applicable - is a/are] scholarship plan[s] that [Insert, as applicable - is/are] managed by [state the name of the investment fund manager of the scholarship plan].
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 265 INSTRUCTION Write the date in full with the name of the month in words. A pro forma prospectus does not have to be dated, but may reflect the anticipated date of the prospectus. Item 2 Inside Cover Page
2.1. Introduction
Starting on a new page on the inside cover page under the heading “Important information to know before you invest”, include an introduction to the information provided in response to sections 2.2, 2.3, and 2.4 of this Part using the following wording:
The following is important information you should know if you are considering an investment in a scholarship plan.
2.2. No Social Insurance Number
Under the sub-heading “No social insurance number = No government grants, no tax benefits”, state the following using the same or substantially similar wording with the last paragraph in bold type:
We need social insurance numbers for you and each child named as a beneficiary under the plan before we can register your plan as a Registered Education Savings Plan (RESP). The Income Tax Act (Canada) won’t allow us to register your plan as an RESP without these social insurance numbers. Your plan must be registered before it can:
- qualify for the tax benefits of an RESP, and
- receive any government grants.
You can provide the beneficiary’s social insurance number after the plan is open. If you don’t provide the beneficiary’s social insurance number when you sign your contract with us, we’ll put your contributions into an unregistered education savings account. During the time your contributions are held in this account, we will deduct sales charges and fees from your contributions as described under “Costs of investing in this plan” in the prospectus. You will be taxed on any income earned in this account. If we receive the beneficiary’s social insurance number within [insert the number of months - see Instruction (1)] months of your application date, we’ll transfer your contributions and the income they earned to your registered plan. If we do not receive the social insurance numbers within [insert number of months - see Instruction (1)] months of your application date, we’ll cancel your plan. You’ll get
back your contributions and the income earned, less sales charges and fees. Since you pay sales charges up front, you could end up with much less than you put in.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 266 If you don’t expect to get the social insurance number for your beneficiary within [insert number of months - see Instruction (1)] months of your application date, you should not enrol or make contributions to the plan. INSTRUCTIONS (1) State the maximum number of months after the application date of a subscriber’s plan the following which the investment fund manager will cancel the scholarship plan for failure to provide the social insurance numbers required for registering the scholarship plan as an RESP. (2) If the scholarship plan’s rules do not permit a subscriber to open the plan or accept contributions without the beneficiary’s social insurance number, amend the disclosure in this section to reflect that fact.
2.3. Payments Not Guaranteed
(1) Following the disclosure required under section 2.2, state the following, on the inside cover page under the sub-heading “Payments not guaranteed”, using the same or substantially similar wording:
We cannot tell you in advance if your beneficiary will qualify to receive any educational assistance payments (EAPs) [insert, if applicable – or any discretionary payments] from the plan or how much your beneficiary will receive. We do not guarantee the amount of any payments or that they will cover the full cost of your beneficiary’s postsecondary education. (2) For a group scholarship plan, under the sub-heading “Payments from group plans depend on several factors”, state the following using the same or substantially similar wording:
The amount of the EAPs from a group plan will depend on how much the plan earns and the number of beneficiaries in the group who do not qualify for payments. (3) If the scholarship plan provides for any discretionary payments, immediately following the disclosure required under subsection 2.3(1) or 2.3(2), as applicable, list the discretionary payments that may be provided and state the following using the same or substantially similar wording with the first sentence in bold type:
Discretionary payments are not guaranteed. You must not count on receiving a discretionary payment. The [insert the name of the entity funding the discretionary payment] decides if it will make a payment in any year and how much the payment will be. If the [insert the name of the entity funding the discretionary payment] makes a payment, you may get less than what has been paid in the past.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 267 (4) Under the sub-heading “Understand the risks”, state the following using the same or substantially similar wording in bold type:
If you withdraw your contributions early or do not meet the terms of the plan, you could lose some or all of your money. Make sure you understand the risks before you invest. Carefully read the information found under “Risks of investing in a scholarship plan” and “Risks of investing in this plan” in this Detailed Plan Disclosure.
2.4. Withdrawal and Cancellation Rights
Under the sub-heading “If you change your mind”, state the following using the same or substantially similar wording with the last two sentences in bold type:
You have up to 60 days after signing your contract to withdraw from your plan and get back all of your money. If you (or we) cancel your plan after 60 days, you’ll get back your contributions, less sales charges and fees. You will lose the earnings on your money. Your government grants will be returned to the government. Keep in mind that you pay sales charges up front. If you cancel your plan in the first few years, you could end up with much less than you put in. Item 3 Table of Contents
3.1. Table of Contents
(1) Include a table of contents.
(2) Begin the table of contents on a new page.
(3) Include in the table of contents, under the heading “Specific information about our plan[s]”, a list of all of the scholarship plans offered under the prospectus, with a reference to the page numbers where the plan-specific information about each scholarship plan required to be provided under Part C of this Form can be found. Item 4 Introduction and Glossary
4.1. Introduction and Documents Incorporated by Reference
(1) On a new page or immediately after the table of contents, under the heading “Introduction”, incorporate by reference the following documents in the prospectus by using the following wording or wording that is substantially similar:
This Detailed Plan Disclosure contains information to help you make an informed decision about investing in our scholarship plan[s] and to understand your rights as an
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 268 investor. It describes the plan[s] and how [it/they] work[s], including the fees you pay, the risks of investing in a plan and how to make changes to your plan. It also contains information about our organization. The prospectus is comprised of both this Detailed Plan Disclosure and each Plan Summary that was delivered with it. You can find additional information about the plan[s] in the following documents:
- the plan’s most recently filed annual financial statements,
- any interim financial reports filed after the annual financial statements, and
- the most recently filed annual management report of fund performance.
These documents are incorporated by reference into the prospectus. That means they legally form part of this document just as if they were printed as part of this document. You can get a copy of these documents at no cost by calling us at [insert the tollfree telephone number or telephone number where collect calls are accepted] or by contacting us at [insert the scholarship plan’s e-mail address]. [Insert if applicable - You’ll also find these documents on our website at [insert the scholarship plan’s website address]]. These documents and other information about the plan[s] are also available at www.sedar.com. (2) State that any documents of the type described in subsection 4.1(1) above, if filed by the scholarship plan after the date of the prospectus and before the termination of the distribution, are deemed to be incorporated by reference in the prospectus. (3) Include a description of each of the documents referred to in subsection 4.1(1) above and briefly explain the importance each document.
4.2. Terms Used in the Prospectus
Under the heading “Terms used in this prospectus”, provide the following list of defined terms using the same or substantially similar wording:
In this document, “we”, “us” and “our” refer to [name of entities involved in the administration and distribution of scholarship plan securities]. “You” refers to potential investors, subscribers and beneficiaries. The following are definitions of some key terms you will find in this prospectus:
Accumulated income payment (AIP): the earnings on your contributions and/or government grants that you may get from your plan if your beneficiary does not pursue
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 269 post-secondary education and you meet certain conditions set by the federal government or by the plan. AIP: see Accumulated income payment. Application date: the date you opened your plan with us, which is the date you sign your contract. Attrition: under a group plan, a reduction in the number of beneficiaries who qualify for EAPs in a beneficiary group. See also pre-maturity attrition and post-maturity attrition. Beneficiary: the person you name to receive EAPs under the plan. Beneficiary group: beneficiaries in a group plan who have the same year of eligibility. They are typically born in the same year. Contract: the agreement you enter into with us when you open your education savings plan. Contribution: the amount you pay into a plan. Sales charges and other fees are deducted from your contributions and the remaining amount is invested in your plan. Discretionary payment: a payment, other than a fee refund, that beneficiaries may receive in addition to their EAPs, as determined by [insert name of entity funding the discretionary payment] in its discretion. Discretionary payment account: any account that holds money used to fund discretionary payments to beneficiaries. EAP: see Educational Assistance Payment. EAP account: for group plans, an account that holds the income earned on contributions made by subscribers. There is a separate EAP account for each beneficiary group. An EAP account includes the income earned on contributions of subscribers who have cancelled their plan or whose plan was cancelled by us. The money in this account is distributed to the remaining beneficiaries in the beneficiary group as part of their EAPs. Earnings: any money earned on your (i) contributions and (ii) government grants, such as interest and capital gains. For group plans, it does not include any income earned in the discretionary payment account, such as interest earned on income after the maturity date. Educational assistance payment (EAP): In general, an EAP is a payment made to your beneficiary after the maturity date for eligible studies. An EAP consists of your earnings and your government grants. [Insert, if the prospectus includes a group
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 270 scholarship plan - For a group plan, an EAP consists of your government grants, earnings on your government grants and your beneficiary’s share of the EAP account.] EAPs do not include discretionary payments or fee refunds. Eligible studies: a post-secondary educational program that meets the plan’s requirements for a beneficiary to receive EAPs. Government Grant: any financial grant, bond or incentive offered by the federal government, (such as the Canada Education Savings Grant, or the Canada Learning Bond), or by a provincial government, to assist with saving for post-secondary education in an RESP. Grant contribution room: the amount of government grant you are eligible for under a federal or provincial government grant program. Income: has the same meaning as Earnings. Maturity date: the date on which the plan matures. In general, it is in the year your beneficiary is expected to enrol in their first year of post-secondary education. Plan: means [list the name(s) of each of scholarship plan sold under this prospectus], [insert for a multiple prospectus - each] a scholarship plan that provides funding for a beneficiary’s post-secondary education. Post-maturity attrition: under a group plan, a reduction in the number of beneficiaries who qualify for EAPs in a beneficiary group after the maturity date. See also Attrition. Pre-maturity attrition: under a group plan, a reduction in the number of beneficiaries who qualify for EAPs in a beneficiary group before the maturity date. See also Attrition. Subscriber: the person who enters into a contract with [insert legal name of entity entering into contract with subscribers] to make contributions to a plan. Unit: under a group plan, a unit represents your beneficiary’s proportionate share of the EAP account. The terms of the contract you sign determine the value of the unit. Year of eligibility: the year in which a beneficiary is first eligible to receive EAPs under a plan. For a group plan, it is typically the year the beneficiary will enter his or her [insert as applicable - first or second] academic year of eligible studies. In general, the year of eligibility is [insert as applicable - one year after/ the same year as] the maturity date. For other types of plans, the year of eligibility can be any time after the maturity date.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 271 INSTRUCTIONS (1) The list of defined terms must not contain material information not found elsewhere in the prospectus. The glossary must be limited to the terms provided. (2) Use the terms set out in section 4.2 in the prospectus to facilitate comparability between scholarship plans. (3) Include only the terms that are applicable to a scholarship plan included in the prospectus. For example, a prospectus that does not include a group scholarship plan must not include those terms that would be applicable only to a group scholarship plan. Item 5 Overview of Scholarship Plans
5.1. Introductory Heading
Provide, at the top of a new page, the heading “Overview of our scholarship plan[s]”.
5.2. Description of Scholarship Plans
Under the heading “What is a scholarship plan?”, state the following using the same or substantially similar wording:
A scholarship plan is a type of investment fund that is designed to help you save for a beneficiary’s post-secondary education. Your plan must be registered as a Registered Education Savings Plan (RESP) in order to qualify for government grants and tax benefits. To do this, we need social insurance numbers for you and the person you name in the plan as your beneficiary. You sign a contract when you open a plan with us. You make contributions under the plan. We invest your contributions for you, after deducting applicable fees. You will get back your contributions, less fees, whether or not your beneficiary goes on to postsecondary education. Your beneficiary will receive educational assistance payments (EAPs) from us if they enrol in eligible studies and all the terms of the contract are met. Please read your contract carefully and make sure you understand it before you sign. If you or your beneficiary does not meet the terms of your contract, it could result in a loss and your beneficiary could lose some or all of their EAPs.
5.3. List of Scholarship Plans Offered
(1) If the investment fund manager offers more than one type of scholarship plan, under the heading “Types of plans we offer”, list the scholarship plans offered.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 272 (2) State, as applicable, that there are differences in the enrolment criteria, contribution requirements, fees, eligible studies, payments to beneficiaries, options for receiving EAPs and options if the beneficiary does not pursue eligible studies among the scholarship plans offered. For a multiple prospectus, include a cross-reference to the plan-specific disclosure for each scholarship plan provided under Part C of this Form. INSTRUCTION For each scholarship plan listed under subsection 5.3(1), state the name of the issuer of the securities. Item 6 General Information about Scholarship Plan Life Cycle
6.1. Overview of Scholarship Plan Life Cycle
(1) Using the heading “How our plan[s] work[s]”, provide a brief description of the life cycle of the plan(s) offered under the prospectus, from enrolment in the plan(s) to EAPs being paid to the beneficiary. (2) Using the margin of the page, add a sidebar under the heading “How our plan[s] work[s]”, and state the following using the same or substantially similar wording with the title of the sidebar in bold type:
Make sure your contact information is up to date It is important that you keep your address and contact information up to date. We will need to communicate important information to you throughout the life of your plan. We will also need to find you and the beneficiary when the plan matures so we can return your contributions and make payments to the beneficiary. INSTRUCTIONS (1) The disclosure provided under section 6.1 must not exceed one page in length, and may be provided by means of a table or diagram. (2) In providing the disclosure required under section 6.1, briefly describe the life cycle of the scholarship plan(s) offered under the prospectus, including significant stages such as enrolling and registering the scholarship plan as an RESP under the Income Tax Act (Canada), making contributions and paying fees from contributions, investing contributions and government grants, ceasing investments in accordance with the scholarship plan’s investment objectives and strategies upon plan maturity, returning contributions to subscribers at maturity and paying EAPs to beneficiaries for eligible studies. (3) Do not provide a separate life cycle description for each scholarship plan offered under a multiple prospectus. Provide one life cycle description containing the elements
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 273 that are common to the life cycle of each of the scholarship plans offered under the prospectus.
6.2. Enrolling in a Scholarship Plan
(1) Under the sub-heading “Enrolling in a plan”, describe the enrolment process for the scholarship plan(s) offered under the prospectus, including the requirement that the subscriber provide a social insurance number at the time of enrolment to register the plan as an RESP under the Income Tax Act (Canada). (2) Describe the requirements for designation of a beneficiary of the scholarship plan, including Canadian residency and social insurance number requirements.
6.3. Unregistered Accounts
(1) Under the sub-sub-heading “If your beneficiary does not have a social insurance number”, list the options available to a subscriber whose beneficiary does not yet have a social insurance number, including the option to wait until the beneficiary has a social insurance number to purchase a scholarship plan that is eligible to be held in an RESP. (2) If the scholarship plan provider offers an unregistered education savings account, describe (a) the features of the unregistered education savings account, including what happens to contributions made to the account, (b) whether the account is eligible to receive government grants, and (c) the tax treatment of the account. (3) State the deadline for providing the beneficiary’s social insurance number after which the investment fund manager will close the account. INSTRUCTION Any plan or account offered by the scholarship plan provider that is not eligible for registration by the federal government as an RESP or is not held in a registered education savings account must be referred to and described as an “unregistered education savings account”.
6.4. Government Grants
(1) Under the sub-heading “Government grants”, list the government grants that the investment fund manager will apply for on a beneficiary’s behalf. For each government grant program, provide
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 274 (a) a brief description of the program, (b) the maximum amount that may be granted under the program annually and over the duration of an RESP, (c) if applicable, the annual contribution amount that would attract the maximum annual government grant, and (d) any requirement to repay government grants. (2) Describe what happens to the government grants received by the investment fund manager on behalf of a beneficiary, including (a) the legal ownership of the money throughout the life span of an investment in the scholarship plan, (b) whether the money is pooled with the government grants of other beneficiaries, (c) whether the money is invested together with subscriber contributions or separately from contributions, and (d) how the money is allocated on distribution to a qualified beneficiary. (3) State that a subscriber may contact their sales representative or the investment fund manager about the applications that the investment fund manager will make on behalf of the subscriber and disclose where a subscriber can obtain more information about available government grants. INSTRUCTION The disclosure provided under section 6.4 must not exceed two pages. The disclosure may be provided in the form of a table.
6.5. Contribution Limits
(1) Under the sub-heading “Contribution limits”, disclose whether the scholarship plan imposes a cumulative limit for contributions and indicate whether this is exclusive of any government grants. (2) Disclose whether a subscriber can make contributions annually beyond the amount(s) that would result in the receipt of the maximum annual amount in government grants.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 275 (3) If a subscriber is permitted to make additional contributions as described in subsection (2), disclose that the additional contributions are not eligible to attract further government grants and disclose how the additional contributions are invested. (4) Disclose the maximum amount that may be contributed to an RESP under the Income Tax Act (Canada), and provide a cross-reference to the tax consequences of contributions beyond the limit set by the Income Tax Act (Canada) as disclosed under
section 11.3 of this Part of this Form.
6.6. Additional Services
If applicable, under the sub-heading “Additional services”, describe additional services relating to an investment in the scholarship plan that are available to subscribers from the investment fund manager or the principal distributor. INSTRUCTION If insurance for contributions is offered for purchase by the principal distributor, provide a brief description of the insurance coverage, including the name of the insurer and whether the insurance is mandatory or optional for the subscriber. Include a crossreference to the disclosure provided under section 14.5 of Part C of this Form.
6.7. Fees and Expenses
(1) Under the sub-heading “Fees and expenses”, state the following using the same or substantially similar wording:
There are costs for joining and participating in our plan[s]. You pay some of these fees and expenses directly from your contributions. The plan[s] pay[s] some of the fees and expenses, which are deducted from the [plan’s/plans’] earnings. See “Costs of investing in this plan” in this Detailed Plan Disclosure for a description of the fees and expenses of [each of] our plan[s]. Fees and expenses reduce the plan’s returns which reduces the amount available for EAPs. (2) If the investment fund manager offers more than one type of scholarship plan, state, if applicable, that each scholarship plan offered requires the subscriber to pay different fees and expenses and, if applicable, that the choice of scholarship plan affects the amount of compensation paid to the dealer by a member of the organization of the scholarship plan or a subscriber.
6.8. Eligible Studies
Under the sub-heading “Eligible studies”, state the following using the same or substantially similar wording:
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 276 EAPs will be paid to your beneficiary only if he or she enrols in eligible studies. For a summary of the educational programs that qualify for EAPs under our plan[s], see “Summary of eligible studies” in this Detailed Plan Disclosure. [Insert if applicable –The plans offered under the prospectus each have their own criteria for what post-secondary programs qualify as eligible studies for receiving EAPs. We recommend that you carefully read the “Specific information about the plan” sections for each plan in this Detailed Plan Disclosure to better understand the differences among the plans.]
6.9. Payments from the Scholarship Plan
(1) Under the sub-heading “Payments from the plan” with the sub-sub-heading “Return of contributions”, state the following using the same or substantially similar wording:
We always return your contributions less fees to you or to your beneficiary. Earnings from the plan will generally go to your beneficiary. If your beneficiary does not qualify to receive the earnings from your plan, you may be eligible to get back some of those earnings as an “accumulated income payment (AIP)”. See the “Accumulated income payments” section(s) in this Detailed Plan Disclosure for more information about AIPs. (2) Under the sub-sub-heading “Educational assistance payments”, state the following using the same or substantially similar wording:
We will pay EAPs to your beneficiary if you meet the terms of your plan, and your beneficiary qualifies for the payments under the plan. The amount of each EAP depends on the type of plan you have, how much you contributed to it, the government grants in your plan and the performance of the plan’s investments. You should be aware that the Income Tax Act (Canada) has restrictions on the amount of EAP that can be paid out of an RESP at a time. [See Instruction]. INSTRUCTION For the disclosure under subsection (2), briefly describe the restrictions under the Income Tax Act (Canada) on the amount of EAPs that can be paid at a time.
6.10. Unclaimed Accounts
(1) Under the sub-heading “Unclaimed accounts”, briefly describe what an unclaimed account is. (2) Describe the steps that the investment fund manager will take to contact the subscriber and the beneficiary with respect to an unclaimed account.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 277 (3) Describe what will happen to any unclaimed contributions, unclaimed earnings on contributions, government grants and earnings on government grants if the investment fund manager is unable to locate the subscriber or the beneficiary. (4) Describe how a subscriber or beneficiary can obtain payments of any unclaimed money. Item 7 Scholarship Plans with Same Investment Objectives (Multiple Prospectus)
7.1. Investment Objectives
(1) This section applies to a multiple prospectus for scholarship plans that have the same investment objectives, investment strategies and investment restrictions. (2) Set out, under the heading “How we invest your money” with the sub-heading “Investment objectives”, the fundamental investment objectives of the scholarship plans, including any information that describes the fundamental nature of the scholarship plans or the fundamental features of the scholarship plans that distinguish them from other types of scholarship plans. (3) Describe the nature of any securityholder or other approval that may be required to change the investment objectives of the scholarship plans. (4) Describe any of the material investment strategies to be used to achieve those investment objectives. (5) If each scholarship plan purports to arrange a guarantee or insurance in order to protect all or some of the principal amount of the investments made by subscribers, include this fact as a fundamental investment objective of the scholarship plans and (a) identify the person providing the guarantee or insurance, (b) provide the material terms of the guarantee or insurance, including the maturity date of the guarantee or insurance, and (c) provide the reasons for which the guarantor or insurer, as applicable, could limit or avoid execution of the guarantee or insurance policy. INSTRUCTIONS (1) State the type or types of securities, such as money market instruments, first mortgages and bonds, in which the scholarship plans will be primarily invested under normal market conditions.
REGULATION IN FORCE FROM JANUARY 3, 2019 TO MAY 18, 2021 Regulation 41-101 January 3, 2019 PAGE 278 (2) If a particular investment strategy is an essential aspect of the scholarship plans, as evidenced by the manner in which the scholarship plans are marketed, disclose this strategy as an investment objective. Item 8 Scholarship Plans with Same Investment Strategies (Multiple Prospectus)
8.1. Investment Strategies
(1) This section applies to a multiple prospectus for scholarship plans that have the same investment objectives, investment strategies and investment restrictions. (2) Describe under the sub-heading “Investment strategies” the following:
(a) the principal investment strategies that the scholarship plans intend to use in achieving the investment objectives, and (b) the process by which the scholarship plans’ portfolio adviser selects investments for the portfolios of the scholarship plans, including any investment approach, philosophy, practices or techniques used by the portfolio adviser or any particular style of portfolio management that the portfolio adviser intends to follow. (3) Indicate the types of investments, other than those held by the scholarship plans in accordance with their fundamental investment objectives, which may form part of the portfolio assets of the scholarship plans under normal market conditions. (4) If the scholarship plans may depart temporarily from their fundamental investment objectives as a result of adverse market, economic, political or other considerations, disclose any temporary defensive tactics the portfolio adviser may use or intends to use in response to such conditions. INSTRUCTION Scholarship plans may, in responding to subsection 8.1(2), provide a discussion of the general investment approach or philosophy followed by the portfolio adviser of the scholarship plan. Item 9 Scholarship Plans with Same Investment Restrictions (Multiple Prospectus)
9.1. Investment Restrictions
(1) This section applies to a multiple prospectus for scholarship plans that have the same investment objectives, investment strategies and investment restrictions.
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- Referred to by
- Regulation 81-101 respecting Mutual Fund Prospectus Disclosure2020Regulation 44-102 respecting Shelf Distributions2020CSA Notice of Publication: Regulation to Amend Regulation 44-102 Respecting Shelf Distributions for At-the-Market Distributions2020Regulation to amend Regulation 44-102 respecting Shelf Distributions2020Regulation 52-112 respecting Non-GAAP and Other Financial Measures Disclosure2020Draft Regulation to amend Regulation 81-106 respecting Investment Fund Continuous Disclosure2019
Source: Autorite des marches financiers Quebec — original document · Summary generated with machine assistance and reviewed before publication; the authoritative text is the regulator's original document. How RegAlert works
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