VANCOUVER, May 14 /CNW/ - The British Columbia Securities Commission
today re-published for comment its proposed rule for issuers quoted in the
U.S. over-the-counter markets along with the related companion policy and
forms.
The changes to B.C. Instrument (BCI) 51-509 Issuers Quoted in the U.S.
Over-the-Counter Markets reflect comments from the initial public
consultation.
On Oct. 29, 2007, the BCSC published for comment changes it was
considering to apply to U.S. OTC issuers with significant connections to the
province. The comment period ended on Dec. 31, 2007, and the BCSC received 19
comment letters for consideration. A summary of these comments and the
commission's responses are included in Appendix A to the notice re-publishing
the proposed rule.
Under the proposed BCI 51-509 Issuers Quoted in the U.S. Over-the-Counter
Markets, the BCSC will have better legal tools to improve disclosure of
B.C.-connected OTC issuers. The proposed rule also discourages the manufacture
and sale of shell companies that may be used for abusive purposes.
The 30-day comment period for the proposed instrument will end on
June 13, 2008.
The B.C. Securities Commission is the independent provincial government
agency responsible for regulating trading in securities within the province.
You will find more information on the proposed rule by visiting the Securities
Law and Policy section of our website at www.bcsc.bc.ca. If you have
questions, contact Ken Gracey, Media Relations, 604-899-6577.
Learn how to avoid investment fraud at the BCSC's investor education
website: www.investright.org.BCI 51-509 Issuers Quoted in the U.S. Over-the-Counter Markets
Backgrounder
What is the U.S. OTC securities market?
- The OTC market is composed of OTC Bulletin Board (OTC BB) and the
Pink Sheets. These markets are legal and are home to legitimate
businesses, but they are vulnerable to abuse because the level of
regulatory scrutiny is very low.
Why is the BCSC concerned about the U.S. OTC securities market?
- A disproportionate number of players in the U.S. OTC markets who
engage in abusive activities have visible connections to B.C. Their
activities damage the reputation of the province's capital markets,
harming the interests of legitimate issuers, investment dealers, and
other market participants.
How does the Securities Act define an OTC issuer?
- Recent B.C. government amendments to the Securities Act allow the
BCSC to designate OTC issuers as reporting issuers. The proposed
instrument designates OTC issuers that have one or more of the
substantial connections listed in BCI 51-509 Issuers Quoted in the
U.S. Over-the-Counter Markets as reporting issuers, and imposes
substantive requirements, benefits and restrictions on these issuers.
What changes is the BCSC making to the proposed instrument?
- the Canadian Trading and Quotation System Inc. (CNQ) was added to the
list of exchanges that exclude issuers from the proposed instrument
- changes were made to the significant connections requirement that
will result in an OTC issuer being designated as a reporting issuer
- an OTC issuer that becomes a reporting issuer must remain a reporting
issuer for at least one year after it no longer has a substantial
connection to B.C.
- most foreign issuer and multi-jurisdictional disclosure system (MJDS)
exemptions will apply, with the exception of the exemption regarding
material change reporting
- there will be a legending requirement for securities that OTC
reporting issuers distribute under exemptions
For further information: Ken Gracey, (604) 899-6577 or (B.C. & Alberta)
1-800-373-6393
