Have to go undergo two reviews: BC principal regulator; Ontario will conduct their own review and provide comments independent of BC. Receipt will have to be issued by BC on behalf of all passport jurisdictions and Ontario. (C) What if principle regulator is Ontario? File nationally and receive receipts Receives comments only from Ontario Once final receipt obtained, eligible for every jurisdiction in Canada even though they’re not part of the passport system. Principal regulator (p.238) Generally, the principal regulator will be the jurisdiction where the issuer’s head office is located. If issuer’s head office is not located in a specified jurisdiction, the principal regulator will be the specified jurisdiction w/ which the issuer has the most significant connection. Factors considered (in descending order of importance) in determining connection: Location of issuer’s management Ex. BC managed private issuer, you’d have a principal regulator in BC Location of issuer’s assets and operations Location of the Canadian trading market or quotation system on which the issuer’s securities are traded or quoted, and Location of issuer’s securityholders if the issuer’s securities are not traded or quoted on a Canadian trading market or quotation system. Filing materials Filer should indicate in its SEDAR electronic filing its principal regulator and that it is filing under NP 11-202 and MI 11-102 If principal regulator determined w/ the most significant connection test, then should indicate the connecting factor or factors used File on SEDAR a draft blacklined final prospectus as early as possible A seasoned prospectus (a prospectus used to issue securities w/in the previous two years) may be used Review of materials Principal regulator will use its best efforts to issue a first comment letter w/in 10 working days of the date it receives the preliminary prospectus or pro forma materials. Comment letter outlines problems in the preliminary materials, which the issuer must correct for a final receipt. In the case of dual prospectus, OSC uses its best efforts w/in 5 working days to either advise of material concerns or indicate OSC is clear to receive final materials. Time period for review may be extended if amendments mean the principal regulator is unable to complete a review in the time indicates. Opting out of dual review process (p.239)
unseasonably warm weather in Danier Leather; this is the market impact test! Timing may be important – look @ Kapusta on p.360 Re Donnini (p.361; footnote 122) F: Donnini was a director and large SH of the parent company of Yorkton Securities, which was negotiating w/ KCA, a mining company, about a warrants financing. I: whether Donnini knew material non-public facts when he engaged in certain trades? OSC found that Donnini knew from speaking w/ a # of colleagues at Yorkton that the deal was likely to be completed at $6.75 per share, and that counted as knowledge of a “material fact” even though the deal was not certain to occur. This finding was confirmed by his trading pattern Commission considered the probability that financing might go through as relevant Concealing ID of firm – not good Probability/Magnitude Test Likelihood of occurrence and impact on the market price H: guilty of insider trading (B) The material information relied on by X to trade was NOT GENERALLY DISCLOSED There are two parts to making info public (p.361-363): disclosure (releasing the info) and accomplished through continuous disclosure methods dissemination (ensuring the info is distributed broadly enough). Harold P. Connor (OSCB 1976) Test for whether a material fact or change has been generally disclosed: Information must have been disseminated to trading public Public must have been given adequate time to digest that information given its nature/complexity – minimum 1-day requirement This test was later incorporated into NP 51-201 – issuer’s responsibility to make sure the information has been disseminated National Policy 51-201 Recommendations on how to disclose and when to disclose material change Also addresses selective disclosure & recommends some steps to be taken to minimize selective disclosure Tipping is selective disclosure, so Evidentiary issues Commission Staff must prove each element of the an illegal IT allegation on a BOP.