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CSA propose a new prospectus exemption for the resale of securities of a foreign issuer

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Jun 29, 2017

On June 29, 2017, the Canadian Securities Administrators (CSA) published for comment proposed amendments to National Instrument 45-102 Resale of Securities (NI 45-102) that would introduce a new prospectus exemption for the resale of securities of a foreign issuer.

If adopted, the proposed exemption would allow Canadian investors to resell, outside of Canada, securities of a foreign issuer acquired under a prospectus exemption where the issuer is not a reporting issuer in any jurisdiction of Canada. The proposed amendments suggest a different approach for determining minimal connection to Canada by introducing a definition of foreign issuer to replace the current 10 per cent Canadian ownership test.

Comments on the proposed amendments should be submitted in writing by September 27, 2017.  Re­view the press re­lease and related documents on the AMF’s web­site.

Concurrently on June 29, 2017, the Ontario Securities Commission (OSC) published for a 90-day comment period revised OSC Rule 72-503 Distributions Outside Canada and proposed Companion Policy 72-503 Distributions Outside Canada. Under these proposals, resale provisions of securities of a foreign issuer would instead be covered by the CSA’s foreign issuer resale exemption above.

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