B.C. Reg. 63/2023, deposited March 2, 2023, under the SECURITIES ACT [section 184]. Order of the British Columbia Securities Commission, dated March 1, 2023.

WHEREAS the British Columbia Securities Commission participates in an initiative to produce national and multilateral instruments that, with respect to particular securities regulatory matters, reflect the law as it is enacted in British Columbia and in each other participating jurisdiction of Canada;

AND WHEREAS each of the provinces of Alberta, Manitoba, New Brunswick, Nova Scotia, Ontario, Québec and Saskatchewan has amended National Instrument 45-106 Prospectus Exemptions as that instrument applies in the jurisdiction, and enacted consequential amendments to Multilateral Instrument 11-102 Passport System, National Instrument 45-102 Resale of Securities and National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards;

AND WHEREAS although the amendments have no legal effect in British Columbia, it is necessary for British Columbia’s version of these instruments to accurately reflect the law as enacted in the other provinces;

NOW THEREFORE the Chair of the British Columbia Securities Commission orders that

(a) Multilateral Instrument 11-102 Passport System, B.C. Reg. 58/2008, is amended as set out in the attached Schedule A,

(b) National Instrument 45-102 Resale of Securities, B.C. Reg. 107/2004, is amended as set out in the attached Schedule B,

(c) National Instrument 45-106 Prospectus Exemptions, B.C. Reg. 227/2009, is amended as set out in the attached Schedule C, and

(d) National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards, B.C. Reg. 382/2010, is amended as set out in the attached Schedule D.

— B. LEONG, Chair, British Columbia Securities Commission.

Schedule A

1. Multilateral Instrument 11-102 Passport System, B.C. Reg. 58/2008, is amended as set out in this Schedule.

2. Appendix D is amended as follows:

(a) by replacing the following row:

with the following, as indicated:

(b) in the row entitled "Trading exchange contracts on an exchange in jurisdiction" under "Trading in Exchange Contracts" by replacing

(i) "s.106 & 107" with "n/a" under the column titled "Alberta",

(ii) "s.40" with "n/a" under the column titled "Saskatchewan", and

(iii) "s.70.1" with "n/a" under the column titled "New Brunswick";

(c) in the row entitled "Trading exchange contracts on an exchange outside jurisdiction" under "Trading in Exchange Contracts" by replacing

(i) "s.108 & 109" with "n/a" under the column titled "Alberta",

(ii) "s.41" with "n/a" under the column titled "Saskatchewan", and

(iii) "s.70.2" with "n/a" under the column titled "New Brunswick";

(d) in the rows under "Requirements when using prospectus exemptions" by replacing the following rows:

with the following, as indicated:

Schedule B

1. National Instrument 45-102 Resale of Securities, B.C. Reg. 107/2004, is amended as set out in this Schedule.

2. Appendix D is amended

(a) in the list under the heading "Restricted Period Trades" by

(i) replacing "section 2.3 [accredited investor];" with "section 2.3 [accredited investor] (except in Ontario);",

(ii) replacing "section 2.5 [family, friends and business associates] (except in Ontario)" with "section 2.5 [family, friends and business associates]",

(iii) repealing the following item:

• section 2.7 [founder, control person and family] (Ontario); ,

(iv) replacing "section 2.9 [offering memorandum] (in Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Prince Edward Island, Québec, Saskatchewan and Yukon);" with "section 2.9 [offering memorandum];",

(v) replacing "section 3.1 of Alberta Securities Commission Rule 72-501 Distributions to Purchasers Outside Alberta;" with "section 5 and section 7 of Alberta Securities Commission Rule 72-501 Distributions to Purchasers Outside Alberta;",

(vi) adding the following item after "clauses 77 (1) (u) and (w) and subclauses 77 (1) (ab) (ii) and (iii) of the Securities Act (Nova Scotia);":

• section 73.3 of the Securities Act (Ontario) [accredited investor]; , and

(vii) adding "Alberta," before "Ontario, Québec, New Brunswick and Nova Scotia", and

(b) under the heading "3. Ontario Provisions" by

(i) replacing the definition of "2009 OSC Rule 45-501" with the following:

"2009 OSC Rule 45-501" means the Ontario Securities Commission Rule 45-501 Ontario Prospectus and Registration Exemptions that came into force on the later of (a) September 28, 2009 and (b) the day on which sections 5 and 11, subsection 12 (1) and section 13 of Schedule 26 of the Budget Measures Act, 2009 were proclaimed into force; ,

(ii) replacing the definition of "Type 1 trade" with the following:

"Type 1 trade" means, in Ontario, a distribution in a security under an exemption from the prospectus requirement in any of the following:

(a) clause 72 (1) (a), (b), (c), (d), (l), (m), (p) or (q) of the Securities Act (Ontario), in each case prior to section 11 of Schedule 26 of the Budget Measures Act, 2009 being proclaimed in force;

(b) section 2.4, 2.5 or 2.11 of the 1998 OSC Rule 45-501;

(c) section 2.3, 2.12, 2.13 or 2.14 of the 2001 OSC Rule 45-501;

(d) section 2.3, 2.12, 2.13, 2.14 or 2.16 of the 2004 OSC Rule 45-501;

(e) section 2.1 and section 2.2 of the 2009 OSC Rule 45-501; ,

(iii) adding the following definitions:

"2005 NI 45-106" means the National Instrument 45-106 Prospectus and Registration Exemptions that came into effect on September 14, 2005;

"2009 NI 45-106" means the National Instrument 45-106 Prospectus and Registration Exemptions that came into effect on September 28, 2009; ,

(iv) adding the following before "(b) 2005 OSC Rule 45-501 and 2009 OSC Rule 45-501":

• Section 73.5 of the Securities Act (Ontario) [government incentive security]

(a.1) 2005 NI 45-106 and 2009 NI 45-106

• Section 2.7 of the 2005 NI 45-106 and the 2009 NI 45-106

(a.2) National Instrument 45-106

• Section 2.3 of National Instrument 45-106 Prospectus and Registration Exemptions prior to subsection 12 (2) of Schedule 26 of the Budget Measures Act, 2009 being proclaimed in force. , and

(v) by replacing the following:

(b) 2005 OSC Rule 45-501 and 2009 OSC Rule 45-501

• Section 2.1 of the 2005 OSC Rule 45-501 and 2009 OSC Rule 45-501;

• Section 2.2 of the 2005 OSC Rule 45-501 and 2009 OSC Rule 45-501.

with the following:

(b) 2005 OSC Rule 45-501 and 2009 OSC Rule 45-501

• Section 2.1 of the 2005 OSC Rule 45-501 and sections 2.1 and 2.2 of the 2009 OSC Rule 45-501.

3. Appendix E is amended

(a) in the list preceding "Transitional and Other Provisions"

(i) by replacing "section 2.4 [private issuer];" with "section 2.4 [private issuer], except in Ontario;",

(ii) by adding the following:

• Section 73.4 of the Securities Act (Ontario) [private issuer];

before the following:

• Prince Edward Island Local Rule 45-510 – Exempt Distributions – Exemptions for Trades Pursuant to Take-over Bids and Issuer Bids; , and

(b) by adding the following paragraph before "(b) 2001 OSC Rule 45-501 and 2004 OSC Rule 45-501":

(a.1) National Instrument 45-106

• Section 2.4 of National Instrument 45-106 Prospectus and Registration Exemptions prior to subsection 12 (2) of Schedule 26 of the Budget Measures Act, 2009 being proclaimed in force.

4. Form 45-102F1 Notice of Intention to Distribute Securities under Section 2.8 of NI 45102 Resale of Securities is amended by

(a) replacing the address of the Nova Scotia Securities Commission with the following address:

Suite 400, 5251 Duke Street
Halifax, Nova Scotia B3J 1P3 , and

(b) replacing the contact information under the heading "Government of Yukon" with the following contact information:

Office of the Yukon Superintendent of Securities
Government of Yukon
Department of Community Services
307 Black Street, 1st Floor
PO Box 2703 (C-6)
Whitehorse, Yukon Y1A 2C6
Telephone: 867-667-5466
Facsimile: 867-393-6251
http://www.community.gov.yk.ca/corp/securities_about.html

Schedule C

1. National Instrument 45-106 Prospectus Exemptions, B.C. Reg. 227/2009, is amended as set out in this Schedule.

2. Section 1.1 is amended

(a) in paragraph (h) of the definition of "eligible investor" by adding "in Manitoba, Northwest Territories, Nunavut, Prince Edward Island and Yukon" before "a person that has obtained advice", and

(b) in paragraph (b) of the definition of "eligibility adviser" by deleting "Saskatchewan or".

3. Part 1 is amended by adding the following section after section 1.1:

Additional definitions - Alberta, New Brunswick, Nova Scotia, Ontario, Québec and Saskatchewan

1.1.1 In this Instrument, in Alberta, New Brunswick, Nova Scotia, Ontario, Québec and Saskatchewan

"date of transition to IFRS" has the same meaning as in National Instrument 51-102 Continuous Disclosure Obligations;

"exempt market dealer" has the same meaning as in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations;

"first IFRS financial statements" has the same meaning as in National Instrument 51-102 Continuous Disclosure Obligations;

"investment dealer" has the same meaning as in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations;

"new financial year" means the financial year of an issuer that immediately follows a transition year;

"old financial year" means the financial year of an issuer that immediately precedes a transition year;

"OM marketing materials" means a written communication, other than an OM standard term sheet, intended for prospective purchasers regarding a distribution of securities under an offering memorandum delivered under section 2.9 [Offering memorandum] that contains material facts relating to an issuer, securities or an offering;

"OM standard term sheet" means a written communication intended for prospective purchasers regarding a distribution of securities under an offering memorandum delivered under section 2.9 [Offering memorandum] that

(a) is dated,

(b) includes the following legend, or words to the same effect, on the first page:

"This document does not provide disclosure of all information required for an investor to make an informed investment decision. Investors should read the offering memorandum, especially the risk factors relating to the securities offered, before making an investment decision.",

(c) contains only the following information in respect of the issuer, the securities or the offering:

(i) the name of the issuer;

(ii) the jurisdiction or foreign jurisdiction in which the issuer’s head office is located;

(iii) the statute under which the issuer is incorporated, continued or organized or, if the issuer is an unincorporated entity, the laws of the jurisdiction or foreign jurisdiction under which it is established and exists;

(iv) a brief description of the business of the issuer;

(v) a brief description of the securities;

(vi) the price or price range of the securities;

(vii) the total number or dollar amount of the securities, or range of the total number or dollar amount of the securities;

(viii) the names of any agent, finder or other intermediary, whether registered or not, involved with the offering and the amount of any commission, fee or discount payable to them;

(xi) the proposed or expected closing date of the offering;

(x) a brief description of the use of proceeds;

(xi) the exchange on which the securities are proposed to be listed, if any, provided that the OM standard term sheet complies with the requirements of securities legislation for listing representations;

(xii) in the case of debt securities, the maturity date of the debt securities and a brief description of any interest payable on the debt securities;

(xiii) in the case of preferred shares, a brief description of any dividends payable on the securities;

(xiv) in the case of convertible securities, a brief description of the underlying securities into which the convertible securities are convertible;

(xv) in the case of exchangeable securities, a brief description of the underlying securities into which the exchangeable securities are exchangeable;

(xvi) in the case of restricted securities, a brief description of the restriction;

(xvii) in the case of securities for which a credit supporter has provided a guarantee or alternative credit support, a brief description of the credit supporter and the guarantee or alternative credit support provided;

(xviii) whether the securities are redeemable or retractable;

(xix) a statement that the securities are eligible, or are expected to be eligible, for investment in registered retirement savings plans, tax-free savings accounts or other registered plans, if the issuer has received, or reasonably expects to receive, a legal opinion that the securities are so eligible;

(xx) contact information for the issuer or any registrant involved, and

(d) for the purposes of paragraph (c), "brief description" means a description consisting of no more than three lines of text in type that is at least as large as that used generally in the body of the OM standard term sheet;

"portfolio manager" has the same meaning as in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations;

"SEC issuer" has the same meaning as in National Instrument 51-102 Continuous Disclosure Obligations;

"specified derivative" has the same meaning as in National Instrument 44-102 Shelf Distributions;

"structured finance product" has the same meaning as in National Instrument 25-101 Designated Rating Organizations;

"transition year" means the financial year of an issuer in which the issuer has changed its financial year end;

"U.S. laws" has the same meaning as in National Instrument 51-102 Continuous Disclosure Obligations.

4. Section 2.5 (1) is amended by replacing "Except in Ontario and subject to section 2.6 [family, friends and business associates – Saskatchewan]," with "Subject to section 2.6 [family, friends and business associates – Saskatchewan] and section 2.6.1 [family, friends and business associates – Ontario],".

5. The following section is added after section 2.6:

Family, friends and business associates – Ontario

2.6.1 (1) In Ontario, section 2.5 [family, friends and business associates] does not apply to a distribution of a security of an issuer unless all of the following are satisfied:

(a) the issuer is not an investment fund;

(b) the person making the distribution obtains a risk acknowledgement signed by all of the following:

(i) the purchaser;

(ii) an executive officer of the issuer other than the purchaser;

(ii) if the purchaser is a person referred to under paragraph 2.5 (1) (b), the director, executive officer or control person of the issuer or an affiliate of the issuer who has the specified relationship with the purchaser;

(iv) if the purchaser is a person referred to under paragraph 2.5 (1) (c), the director, executive officer or control person of the issuer or an affiliate of the issuer whose spouse has the specified relationship with the purchaser;

(v) if the purchaser is a person referred to under paragraph 2.5 (1) (d) or (e), the director, executive officer or control person of the issuer or an affiliate of the issuer who is a close personal friend or a close business associate of the purchaser;

(vi) the founder of the issuer, if the purchaser is a person referred to in paragraph 2.5 (1) (f) or (g) other than the founder of the issuer.

(2) The person making the distribution must retain the required form referred to in subsection (1) for 8 years after the distribution.

6. Section 2.7 is repealed.

7. Section 2.9 is amended

(a) in subsection (1) by deleting the words ", New Brunswick, Nova Scotia",

(b) in subsection (2) by replacing the words "In Alberta, Manitoba, Northwest Territories, Nunavut, Prince Edward Island, Québec, Saskatchewan and Yukon," with "In Manitoba, Northwest Territories, Nunavut, Prince Edward Island and Yukon,",

(c) by adding the following after subsection (2):

(2.1) In Alberta, New Brunswick, Nova Scotia, Ontario, Québec and Saskatchewan, the prospectus requirement does not apply to a distribution by an issuer of a security of its own issue to a purchaser if

(a) the purchaser purchases the security as principal,

(b) the acquisition cost of all securities acquired by a purchaser who is an individual under this section in the preceding 12 months does not exceed the following amounts:

(i) in the case of a purchaser that is not an eligible investor, $10 000;

(ii) in the case of a purchaser that is an eligible investor, $30 000;

(iii) in the case of a purchaser that is an eligible investor and that received advice from a portfolio manager, investment dealer or exempt market dealer that the investment is suitable, $100 000,

(c) at the same time or before the purchaser signs the agreement to purchase the security, the issuer

(i) delivers an offering memorandum to the purchaser in compliance with subsections (5) to (13), and

(ii) obtains a signed risk acknowledgement from the purchaser in compliance with subsection (15), and

(d) the security distributed by the issuer is not either of the following:

(i) a specified derivative;

(ii) a structured finance product.

(2.2) The prospectus exemption described in subsection (2.1) is not available

(a) in Alberta, Nova Scotia and Saskatchewan, to an issuer that is an investment fund, unless the issuer is a non-redeemable investment fund or a mutual fund that is a reporting issuer, or

(b) in New Brunswick, Ontario and Québec, to an issuer that is an investment fund.

(2.3) The investment limits described in subparagraphs (2.1) (b) (ii) and (iii) do not apply if the purchaser is

(a) an accredited investor, or

(b) a person described in subsection 2.5 (1) [family, friends and business associates]. , and

(d) in subsection (3) by replacing the words "In Alberta, Manitoba, Northwest Territories, Nunavut, Prince Edward Island, Québec, Saskatchewan and Yukon," with "In Manitoba, Northwest Territories, Nunavut, Prince Edward Island and Yukon,".

8. The following subsection is added after subsection 2.9 (3):

(3.0.1) In Alberta, New Brunswick, Nova Scotia, Ontario, Québec and Saskatchewan, this section does not apply to a distribution of a security to a person that was created, or is used, solely to purchase or hold securities in reliance on the exemption from the prospectus requirement set out in subsection (2.1).

9. Section 2.9 (3.1) is amended by replacing "Subsections (1) and (2)", with "Subsections (1), (2) and (2.1)".

10. Section 2.9 (4) is amended by deleting ", Saskatchewan".

11. The following is added after subsection 2.9 (5):

(5.1) In Alberta, New Brunswick, Nova Scotia, Ontario, Québec and Saskatchewan, an offering memorandum delivered under subsection (2.1)

(a) must incorporate by reference, by way of a statement in the offering memorandum, OM marketing materials related to each distribution under the offering memorandum and delivered or made reasonably available to a prospective purchaser before the termination of the distribution, and

(b) is deemed to incorporate by reference OM marketing materials related to each distribution under the offering memorandum and delivered or made reasonably available to a prospective purchaser before the termination of the distribution.

(5.2) A portfolio manager, investment dealer or exempt market dealer must not distribute OM marketing materials unless the OM marketing materials have been approved in writing by the issuer.

12. Section 2.9 (15) and (16) is amended by replacing "(1) or (2)" with "(1), (2) or (2.1)" wherever it appears.

13. The following subsections are added after subsection 2.9 (17):

(17.1) In Alberta, New Brunswick, Nova Scotia, Ontario, Québec and Saskatchewan, the issuer must file with the securities regulatory authority a copy of all OM marketing materials required or deemed to be incorporated by reference into an offering memorandum delivered under this section,

(a) if the OM marketing materials are prepared on or before the filing of the offering memorandum, concurrently with the filing of the offering memorandum, or

(b) if the OM marketing materials are prepared after the filing of the offering memorandum, within 10 days of the OM marketing materials being delivered or made reasonably available to a prospective purchaser.

(17.2) OM marketing materials filed under subsection (17.1) must include a cover page clearly identifying the offering memorandum to which they relate.

(17.3) Subsections (17.4) to (17.21) apply to issuers that rely on subsection (2.1) and that are not reporting issuers in any jurisdiction of Canada.

(17.4) In Alberta, an issuer must, within 120 days after the end of each of its financial years, file with the securities regulatory authority annual financial statements and make them reasonably available to each holder of a security acquired under subsection (2.1).

(17.5) In New Brunswick, Ontario, Québec and Saskatchewan, an issuer must, within 120 days after the end of each of its financial years, deliver annual financial statements to the securities regulatory authority and make them reasonably available to each holder of a security acquired under subsection (2.1).

(17.6) In Nova Scotia, an issuer must, within 120 days after the end of each of its financial years, make reasonably available annual financial statements to each holder of a security acquired under subsection (2.1).

(17.7) Despite subsections (17.4), (17.5) and (17.6), if an issuer is required to file, deliver or make reasonably available annual financial statements for a financial year that ended before the issuer distributed securities under subsection (2.1) for the first time, the annual financial statements must, as applicable, be filed in Alberta, delivered in New Brunswick, Ontario, Québec and Saskatchewan or made reasonably available in Nova Scotia, as applicable, on or before the later of

(a) the 60th day after the issuer first distributes securities under subsection (2.1), and

(b) the deadline in subsection (17.4), (17.5) or (17.6), as applicable, to file, deliver or make reasonably available the annual financial statements.

(17.8) The annual financial statements of an issuer referred to in subsections (17.4), (17.5) and (17.6) must include

(a) a statement of comprehensive income, a statement of changes in equity, and a statement of cash flows for

(i) the most recently completed financial year, and

(ii) the financial year immediately preceding the most recently completed financial year, if any,

(b) a statement of financial position as at the end of each of the periods referred to in paragraph (a),

(c) in the following circumstances, a statement of financial position as at the beginning of the financial year immediately preceding the most recently completed financial year:

(i) the issuer discloses in its annual financial statements an unreserved statement of compliance with IFRS, and

(ii) the issuer

(A) applies an accounting policy retrospectively in its annual financial statements,

(B) makes a retrospective restatement of items in its annual financial statements, or

(C) reclassifies items in its annual financial statements,

(d) in the case of the issuer’s first IFRS financial statements, the opening IFRS statement of financial position at the date of transition to IFRS, and

(e) notes to the annual financial statements.

(17.9) If the annual financial statements referred to in subsection (17.8) present the components of profit or loss in a separate income statement, the separate income statement must be displayed immediately before the statement of comprehensive income referred to in subsection (17.8).

(17.10) The annual financial statements referred to in subsection (17.8) must be audited.

(17.11) Despite subsection (17.10), for the first annual financial statements of an issuer referred to in subsections (17.4), (17.5) and (17.6), comparative information relating to the preceding financial year is not required to be audited if it has not been previously audited.

(17.12) Any period referred to in subsection (17.8) that has not been audited must be clearly labelled as unaudited.

(17.13) In Alberta, New Brunswick, Ontario, Québec and Saskatchewan, if an issuer decides to change its financial year end by more than 14 days, it must deliver to the securities regulatory authority and make reasonably available to each holder of a security acquired under subsection (2.1) a notice containing the information set out in subsection (17.15) as soon as practicable and, in any event, no later than the earlier of

(a) the deadline, based on the issuer’s old financial year end, for the next annual financial statements referred to in subsections (17.4) and (17.5), and

(b) the deadline, based on the issuer’s new financial year end, for the next annual financial statements referred to in subsections (17.4) and (17.5).

(17.14) In Nova Scotia, if an issuer decides to change its financial year end by more than 14 days, it must make reasonably available to each holder of a security acquired under subsection (2.1) a notice containing the information set out in subsection (17.15) as soon as practicable and, in any event, no later than the earlier of

(a) the deadline, based on the issuer’s old financial year end, for the next annual financial statements referred to in subsection (17.6), and

(b) the deadline, based on the issuer’s new financial year end, for the next annual financial statements referred to in subsection (17.6).

(17.15) The notice referred to in subsections (17.13) and (17.14) must state

(a) that the issuer has decided to change its financial year end,

(b) the reason for the change,

(c) the issuer’s old financial year end,

(d) the issuer’s new financial year end,

(e) the length and ending date of the periods, including the comparative periods, of the annual financial statements referred to in subsections (17.4), (17.5) and (17.6) for the issuer’s transition year and its new financial year, and

(f) the filing deadline for the annual financial statements for the issuer’s transition year.

(17.16) If a transition year is less than 9 months in length, the issuer must include as comparative financial information to its annual financial statements for its new financial year

(a) a statement of financial position, a statement of comprehensive income, a statement of changes in equity, a statement of cash flows, and notes to the financial statements for its transition year,

(b) a statement of financial position, a statement of comprehensive income, a statement of changes in equity, a statement of cash flows, and notes to the financial statements for its old financial year,

(c) in the following circumstances, a statement of financial position as at the beginning of the old financial year:

(i) the issuer discloses in its annual financial statements an unreserved statement of compliance with IFRS, and

(ii) the issuer

(A) applies an accounting policy retrospectively in its annual financial statements,

(B) makes a retrospective restatement of items in its annual financial statements, or

(C) reclassifies items in its annual financial statements, and

(d) in the case of the issuer’s first IFRS financial statements, the opening IFRS statement of financial position at the date of transition to IFRS.

(17.17) A transition year must not exceed 15 months.

(17.18) An SEC issuer satisfies subsections (17.13), (17.14) and (17.16) if

(a) it complies with the requirements of U.S. laws relating to a change of fiscal year, and

(b) it delivers a copy of all materials required by U.S. laws relating to a change in fiscal year to the securities regulatory authority at the same time as, or as soon as practicable after, they are filed with or furnished to the SEC and, in any event, no later than 120 days after the end of its most recently completed financial year.

(17.19) The financial statements of an issuer referred to in subsections (17.4), (17.5) and (17.6) must be accompanied by a notice of the issuer disclosing in reasonable detail the use of the aggregate gross proceeds raised by the issuer under section 2.9 in accordance with Form 45-106F16 Notice of Use of Proceeds, unless the issuer has previously disclosed the use of the aggregate gross proceeds in accordance with Form 45-106F16 Notice of Use of Proceeds.

(17.20) In New Brunswick, Nova Scotia and Ontario, an issuer must make reasonably available to each holder of a security acquired under subsection (2.1) a notice of each of the following events in accordance with Form 45-106F17 Notice of Specified Key Events, within 10 days of the occurrence of the event:

(a) a discontinuation of the issuer’s business;

(b) a change in the issuer’s industry;

(c) a change of control of the issuer.

(17.21) An issuer is required to make the disclosure required respectively by subsections (17.4), (17.5), (17.6), (17.19) and (17.20) until the earliest of

(a) the date the issuer becomes a reporting issuer in any jurisdiction of Canada, and

(b) the date the issuer ceases to carry on business.

(17.22) In Ontario, an issuer that is not a reporting issuer in Ontario that distributes securities in reliance on the exemption in subsection (2.1) is designated a market participant under the Securities Act (Ontario).

(17.23) In New Brunswick, an issuer that is not a reporting issuer in New Brunswick that distributes securities in reliance on the exemption in subsection (2.1) is designated a market participant under the Securities Act (New Brunswick).

14. Section 6.1 (1) (c) is amended by replacing "or (2) [offering memorandum for Alberta, British Columbia, Manitoba, New Brunswick, Nova Scotia, Newfoundland and Labrador, Northwest Territories, Nunavut, Prince Edward Island, Québec, Saskatchewan and Yukon]" with ", (2) or (2.1) [offering memorandum in Alberta, New Brunswick, Nova Scotia, Ontario, Québec and Saskatchewan]".

15. Section 6.5 is amended by adding the following subsections:

(1.1) In Alberta, New Brunswick, Nova Scotia, Ontario, Québec and Saskatchewan, the required form of risk acknowledgement for individual investors includes Schedule 1 Classification of Investors Under the Offering Memorandum Exemption and Schedule 2 Investment Limits for Investors Under the Offering Memorandum Exemption to Form 45-106F4.

(3) In Ontario, the required form of risk acknowledgement under section 2.6.1 [Family, friends and business associates – Ontario] is Form 45-106F12 Acknowledgement Form for Family, Friends and Business Associate Investors.

16. Part 8 is amended by adding the following sections:

Transition – offering memorandum exemption – update of offering memorandum

8.4.1 Despite subsection 2.9 (5.1), in Alberta, New Brunswick, Nova Scotia, Québec and Saskatchewan, an issuer is not required to update an offering memorandum that was filed in the local jurisdiction before April 30, 2016, solely to incorporate the statement required under paragraph 2.9 (5.1) (a), unless the offering memorandum would otherwise be required to be updated pursuant to subsection 2.9 (14) or Instruction B.12 of Form 45-106F2 Offering Memorandum for Non-Qualifying Issuers.

Transition – offering memorandum exemption – update of offering memorandum

8.4.2 Despite paragraph 2.9 (17.1) (a), in Alberta, New Brunswick, Nova Scotia, Québec and Saskatchewan, OM marketing materials that relate to an offering memorandum that was filed in the local jurisdiction before April 30, 2016 and that are delivered or made reasonably available after April 30, 2016 must be filed within 10 days from the earlier of delivery to, or being made reasonably available to, a prospective purchaser.

17. Form 45-106F2 Offering Memorandum for Non-Qualifying Issuers is amended in items 10.1 and 10.2 by adding "Ontario," before "Prince Edward Island".

18. Form 45-106F3 Offering Memorandum for Qualifying Issuers is amended in item 10 by adding "Ontario," before "Prince Edward Island".

19. Form 45-106F4 is amended

(a) by replacing "In Alberta, Manitoba, Northwest Territories, Nunavut, Prince Edward Island, Québec, Saskatchewan and Yukon, to qualify as an eligible investor, you may be required to obtain that advice" with "In Manitoba, Northwest Territories, Nunavut, Prince Edward Island and Yukon to qualify as an eligible investor, you may be required to obtain that advice", and

(b) by adding the following after "must each receive a signed copy":

Schedule 1
Classification of Investors Under the Offering Memorandum Exemption

Instructions: This schedule must be completed together with the Risk Acknowledgement Form and Schedule 2 by individuals purchasing securities under the exemption (the offering memorandum exemption) in subsection 2.9 (2.1) of National Instrument 45-106 Prospectus Exemptions (NI 45-106) in Alberta, New Brunswick, Nova Scotia, Ontario, Québec and Saskatchewan.

Schedule 2
Investment Limits for Investors Under the Offering Memorandum Exemption

Instructions: This schedule must be completed together with the Risk Acknowledgement Form and Schedule 1 by individuals purchasing securities under the exemption (the offering memorandum exemption) in subsection 2.9 (2.1) of National Instrument 45-106 Prospectus Exemptions (NI 45-106) in Alberta, New Brunswick, Nova Scotia, Ontario, Québec and Saskatchewan.

20. The Instrument is amended by adding the following form:

Form 45-106F12
Risk Acknowledgement Form for Family, Friends and
Business Associate Investors

Form instructions:

1. This form does not mandate the use of a specific font size or style but the font must be legible.

2. The information in sections 1, 5 and 6 must be completed before the purchaser completes and signs the form.

3. The purchaser, an executive officer who is not the purchaser and, if applicable, the person who claims the close personal relationship to the purchaser must sign this form. Each of the purchaser, contact person at the issuer and the issuer must receive a copy of this form signed by the purchaser. The issuer is required to keep a copy of this form for 8 years after the distribution.

4. The detailed relationships required to purchase securities under this exemption are set out in section 2.5 of National Instrument 45-106 Prospectus and Registration Exemptions. For guidance on the meaning of "close personal friend" and "close business associate", please refer to sections 2.7 and 2.8, respectively, of Companion Policy 45-106CP Prospectus and Registration Exemptions.

21. The Instrument is amended by adding the following forms after Form 45-106F15 Rights Offering Circular for Reporting Issuers:

Form 45-106F16
Notice of Use of Proceeds

[Insert issuer name]

For the financial year ended [Insert end date of most recently completed financial year]

Date: [Specify the date of the Notice. The date must be no earlier than the date of the auditor’s report on the financial statements for the issuer’s most recently completed financial year.]

[Provide the information specified in the following table.]

[If any of the proceeds required to be disclosed in this table were paid directly or indirectly to a related party (as defined in Instruction A.6 of Form 45-106F2 Offering Memorandum Form for Non-Qualifying Issuers) of the issuer, state in each case the name of the related party to whom the payment was made, their relationship to the issuer and the amount paid to the related party.]

Instructions for Completing
Form 45-106F16

Notice of Use of Proceeds

1. The amount for Line (A) is taken from Line (E) in the prior year’s Notice of Use of Proceeds (Notice), if applicable. If a Notice was not required in the prior year, then the amount for Line (A) is $nil.

2. The amount for Line (B) is the aggregate gross proceeds raised in all jurisdictions in Canada under section 2.9 [offering memorandum] of National Instrument 45-106 (the OM exemption) during the most recently completed financial year. If an issuer raised funds in reliance on other prospectus exemptions concurrently with the OM exemption during the year and it is impractical to separately track proceeds raised only under the OM exemption, the issuer can provide the disclosure outlined in the table for the aggregate gross proceeds raised under all prospectus exemptions during the most recently completed financial year.

3. If Line (C) is $nil, then the issuer does not have an obligation to file, deliver or make reasonably available the Notice for that financial year.

4. In Section 2 of the table, the issuer must provide a breakdown in reasonable detail of the uses of the aggregate gross proceeds during the most recently completed financial year. Issuers should ensure that the disclosure is specific enough and provides sufficient detail for an investor to understand how the proceeds have been used.

5. Both direct and indirect payments to related parties must be disclosed. An example of an indirect payment could include repayment of a debt that was incurred for a prior payment to a related party.

6. Proceeds invested on a temporary basis would not generally be considered to have been used.

Form 45-106F17
Notice of Specified Key Events

This is the form required under subsection 2.9 (17.20) of National Instrument 45-106 Prospectus Exemptions (NI 45-106) in New Brunswick, Nova Scotia and Ontario to make available notice of specified key events to holders of securities acquired under subsection 2.9 (2.1) of NI 45-106.

Date of notice (yyyy/mm/dd):          /         /

Schedule D

1. National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards, B.C. Reg. 382/2010, is amended as set out in this Schedule.

2. Section 1.1 is amended in paragraph (d) of the definition of "acquisition statements" by deleting "except in Ontario,".

3. Subsection 2.1 (2) is amended

(a) by deleting "except in Ontario," wherever it appears, and

(b) by deleting "and" at the end of paragraph (g), by adding ", and" at the end of paragraph (h) and by adding the following paragraph:

(i) all financial statements

(i) filed by an issuer under subsection 2.9 (17.4) of National Instrument 45-106 Prospectus Exemptions,

(ii) delivered by an issuer under subsection 2.9 (17.5) of National Instrument 45-106 Prospectus Exemptions, or

(iii) made reasonably available by an issuer under subsection 2.9 (17.6) of National Instrument 45-106 Prospectus Exemptions.

4. In the following provisions, "(c) and (e)" is replaced with "(c), (e) and (i)":

(a) section 3.2 (1);

(b) section 3.7 (1);

(c) section 3.8 (1);

(d) section 3.9 (1);

(e) section 3.10 (1).

Copyright © 2023: King's Printer, Victoria, British Columbia, Canada