British Columbia Regulatory Updates
By Brian Koscak, EMDA Chairman and Partner, Cassels Brock & Blackwell LLP
BCSC Amends Northwest Exemption
Effective April 16, 2012, the British Columbia Securities
Commission (BCSC) has added two new conditions to BC
Instrument 32-513 – Registration Exemption for Trades in
Connection with Certain Prospectus Exempt Distributions. Under
the new conditions the exemption will not be available to a former
registrant and to a person who has provided financial services to
the purchaser. Financial services includes, but is not limited to,
carrying on business as a mortgage broker, selling or providing
insurance or related services or acting as a financial planner who
considers the tax, personal or financial situation of a person and
then provides that person with advice about how to make financial
planes. The effect will now require certain firms/individuals to
register as an exempt market dealer/dealing representative under
British Columbia (BC) securities legislation if they continue to carry
on their business after the changes and are former registrants or
have previously provided financial services to a purchaser.
The BCSC knows who is relying on the Northwest Exemption
in BC since a firm/individual seeking to rely on the Northwest
Exemption in BC must file an information report with the BCSC.
In other words, the BCSC knows who you are. Rest assured
anyone who is relying on the Northwest Exemption in BC must
now reconsider whether the changes now require registration.
If in doubt, you should contact the BCSC or a securities
lawyer specializing in securities registration matters to determine
whether registration is required. Remember, if you get it wrong, the
consequences could be severe so to be prudent and check first.
The author understands that the BCSC has been focussing
on those relying on the Northwest Exemption in BC in connection
with mortgage investment entities. So, if you are caught by
these changes, note that you are likely a focus of attention by
Form 45-106F6 British Columbia Report of Exempt Distribution
Information about Form 45-106F6
Information about Form 45-106F6 is available on the BCSC’s
web site at: http://www.bcsc.bc.ca/drequirements.asp?id=13722.
There is also a useful PowerPoint presentation by the BCSC
that is also available on the BCSC’s website. The BCSC used
to have a webinar related to this PowerPoint presentation on
Form 45-106F6 on its website but it was removed after certain
exemptions were added in connection with BC Instrument 45-533.
For more information contact:
1. See http://www.bcsc.bc.ca/policy.aspx?id=14442&cat=BC%20Notices