Canadian Ownership and Control Determination Regulations, 1984 — 22
ormal equity at any time prior to the expiration of the right conferred by the unit of the class of forward equity, subsection (10) does not apply to the unit of the class of forward equity. (12) Subject to subsection (13), where units of a publicly traded class of formal equity of an applicant are issuable pursuant to the exercise of a right conferred by a unit of a class of forward equity that is a bearer unit and all units of that class of forward equity were offered for sale at the time of issue by the entity or its underwriters only outside Canada, the units of the class of formal equity shall be deemed (a) to be issued and outstanding and owned by a person having a Canadian ownership rate of nil; and (b) to form a separate class of formal equity. (13) Subsection (12) does not apply to a unit of a class of forward equity of the applicant where the applicant demonstrates to the Minister that the unit does not meet the conditions described in paragraph (7)(a) nor the condition described in paragraph (7)(b) and that the applicant has knowledge or reason to believe that the unit will not be converted to a unit of a class of formal equity at any time prior to the expiration of the right conferred by the unit. (14) Where an applicant has no knowledge or reason to believe that the beneficial Canadian ownership of units of a class of forward equity of the applicant that are issuable would be less than the applicant’s Canadian ownership rate, calculated without regard to those units, and the applicant elects that the class of forward equity be exempt from the application of this section, the class of forward equity is exempt from the application of this section. (15) Where units of a class of forward equity were either issued and outstanding or to be issued and outstanding pursuant to a public announcement on or prior to July 15, 1983, the applicant may elect that (a) subsections (1) to (13) shall apply only in respect of those units of a class of formal equity that would have been deemed issued and outstanding as a result of the application of subsection 17(5) or (7), as the case may be, of the Canadian Ownership and Control Determination Regulations as a result of the application of those Regulations; and (b) the Canadian ownership rate of the owner of the units shall be deemed to be the Canadian ownership rate that would be considered for the purposes of subsection 17(5) and (7) of the Canadian Ownership and Control Determination Regulations to be the Canadian ownership rate of a person deemed to own those units. (16) Where a class of forward equity of an applicant has been issued by the applicant and (a) the exercise of the right conferred by a unit of the class of forward equity is subject to a restriction to the effect that the right is not exercisable if the exercise thereof would reduce the Canadian ownership rate of the applicant below a specified limit that is acceptable to the Minister, or (b) the right conferred by a unit of the class of forward equity cannot be exercised unless, at the time of the exercise of the right, the owner thereof has a specified Canadian ownership rate that is acceptable to the Minister, the applicant may elect to be exempt from the application of subsections (2) to (13) in respect of the class of forward equity and, on the making of that election, the applicant is exempt from the application of those subsections in respect of the class of forward equity. (17) Units of a class of formal equity deemed issued and outstanding under this section shall cease to be so deemed on the day that is the earliest of (a) the day next following the day on which the right conferred by the unit of the class of forward equity expires; (b) the day next following any day on which the number of units issuable pursuant to the exercise of the right conferred by the unit of the class of forward equity is reduced. (18) Units of a class of formal equity deemed issued and outstanding pursuant to paragraph 22(7)(a) shall