Procedural Matters and Preparing for Annual Filings · Procedural Matters and Preparing for Annual Filings (for non-investment fund reporting issuers) February 22, 2018 Eden Williams,

The OSC SME Institute

Procedural Matters and Preparing for Annual Filings (for non-investment fund reporting issuers) February 22, 2018

Eden Williams, Manager, Regulatory Administration

Regulatory Administration Team, Corporate Finance

Disclaimer

The views expressed in this presentation are the personal views of the presenting staff and do not necessarily represent the views of the Commission or other Commission staff.

The presentation is provided for general information purposes only and does not constitute legal or accounting advice.

Information has been summarized and paraphrased for presentation purposes and the examples have been provided for illustration purposes only. Responsibility for making sufficient and appropriate disclosure and complying with applicable securities laws remains with the company.

Information in this presentation reflects securities laws and other relevant standards that are in effect as of the date of the presentation.

The contents of this presentation should not be modified without the express written permission of the presenters.

THE OSC SME INSTITUTE 2

OSC SME Institute — Objectives

• Help SMEs navigate regulatory waters

• Demystify disclosure requirements so issuers can focus on building their business

• Help SMEs reduce the cost of compliance

• Provide an opportunity for informal dialogue with OSC staff

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Disclosure requirements, including those for technical reporting, are a cornerstone of investor confidence

THE OSC SME INSTITUTE

Procedural Matters and Preparing for Annual Filing

CORPORATE FINANCE BRANCH 4

Topic Pages

Applications for Exemptive Relief 5

Preliminary Prospectus 25

Continuous Disclosure Documents – Annual and Interim Filings 56

Insider Reporting 81

Reports of Exempt Distribution 91


Applications for Exemptive Relief

Dave Mattacott, Applications Administrator

Exemptive Relief Applications

• If a company requires relief from a requirement of securities legislation, it may file an application for exemptive relief.

• Multiple jurisdictions:

NP 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions

NP 11-203 describes:

• the process for filing applications,

• the types of applications that can be made and

• how a company determines its principal regulator (PR).

• Ontario only:

OSC Policy 2.1 Applications to the Ontario Securities Commission

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Types of Applications

Type Explanation Reference Files/Fees

Passport • Relief being sought in Ontario and at least

one other jurisdiction and PR Ontario

• (or relief being sought in at least two

jurisdictions other than ON)

Appendix D to MI 11-102

Passport System

-Files and pays ON

only

Dual • Ontario and at least one other jurisdiction,

Ontario not PR

Appendix D to MI 11-102

Passport System

-Files and pays PR

and ON

Coordinated • a company is seeking relief from a

securities law requirement that falls outside

the scope of MI 11-102, and

• relief is required in at least two jurisdictions

sections 3.4 and 5.2(3), and

Annex C of NP 11-203.

-Files and pays each

applicable regulator

Hybrid • Combination of Coordinated and Passport

or Dual review

• a company must follow the process for

both a coordinated review application and

either a passport application or dual

application

-section 3.5 and Annex D of

NP 11-203.

-Appendix D to MI 11-102

Passport System

-Files and pays each

applicable regulator

Local • requires relief only in Ontario -OSC Policy 2.1 -Files and pays ON

only

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Pre-Filings

• A pre-filing is used to enable a company to consult with staff of the regulator on a specific issue to understand how securities legislation will be interpreted by the regulator.

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•National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions

Application pre-filing

•National Policy 11-202 Process for Prospectus Reviews in Multiple Jurisdictions.

Prospectus pre-filing

Where to file

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Applications e-form portal

Exemptive relief applications

Notices pursuant to

s.11.9 or 11.10 of NI 31-103

Pre-filings e-form portal

Prospectus and Application pre-

filings

General portal

Applications for Management Cease Trade

Orders

Notices under subsection

2.42(2)a of NI 45-106

How to file

• OSC Rule 11-501 requires that as of February 19, 2014 certain documents identified under Ontario’s securities rules be filed electronically through the OSC’s web filing portal.

• We do not accept paper copies

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To get to the filing portals from the OSC homepage: - scroll down to the Quick links and select “OSC’s Electronic filing portal”, or - from the top menu bar, under Securities law and instruments, select “Electronic filing” from the drop-down menu.

How to File - The OSC’s Electronic Filing Portal

• All e-forms can be accessed via the OSC website, on the Electronic Filing Portal: http://www.osc.gov.on.ca/en/SecuritiesLaw_forms_index.htm

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http://www.osc.gov.on.ca/en/SecuritiesLaw_forms_index.htm

• All mandatory information is marked with a red asterisk (*)

• All information should be completed correctly, and carefully double checked

The options for the type of applicant or filer are as follows:

Applications e-form walkthrough

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• Clearing Agency • Credit rating agency • Exchange • Issuer

• Offeror • Registrant • Self regulatory organization • Other

Applications e-form walkthrough

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• Refer to the Application letter and draft decision to determine the correct legislation/instrument/sections

Make sure the right information is in the right box

• If requesting confidentiality, remember to click “Yes” on the form

• The reason for a request for confidentiality should be explained in the application letter

Applications e-form walkthrough - Confidentiality

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Applications e-form walkthrough – Filing Procedures & Principal Regulators

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Applications e-form walkthrough – Expedited review requests

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• Any request for an expedited review should be explained in the application letter

• If requested in the letter, remember to click “Yes” on the form

Applications e-form walkthrough – Documents to attach

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• Attach the Application/Notice document as a PDF

• Attach a copy of the Draft Order/Decision as a Word document

• Include a verification statement, if applicable

Applications e-form walkthrough – Contact information

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• Make sure information is accurate, particularly the email address

SEDAR Applications

NI 81-102 Investment Funds applications,

• If an NI 81-102 application is public, it must be filed on SEDAR

Please note that confidential applications for relief pursuant to NI 81-102 must be filed through the Applications e-form portal

Applications for relief to be evidenced by final prospectus receipt

• Should be filed under the same project number and filing type as the prospectus on SEDAR

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Fees

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Should be paid by credit card at the time of filing

If not paid at the time of filing, or if there is any additional amount owing, you must pay by cheque or wire transfer

Reference the submission ID number when submitting your payment by cheque or wire transfer

Fees

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An application for

(a) relief from one section of the Act, a regulation or a rule, or

(b) recognition or designation under one section of the Act, a regulation or a rule. O1

An application for

(a) relief from two or more sections of the Act, a regulation or a rule made at the same time, or

(b) recognition or designation under two or more sections of the Act, a regulation or a rule made at the same time.

O2

An application made under O1 or O2 if none of the following is subject to, or is reasonably expected to become subject to, a participation fee under this Rule or OSC Rule 13-503 (Commodity Futures Act) Fees:

(i) the applicant;

(ii) an issuer of which the applicant is a wholly owned subsidiary;

(iii) the investment fund manager of the applicant);

O3

OSC Rule 13-502 Fees Appendix C:

General PDF Submission e-form walkthrough

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• Certain other documents may be filed on the General PDF Submissions portal

(e.g., Notice under ss.2.42(2)a of NI 45-106, Management Cease Trade Orders, etc.)

• Accessible through the OSC’s Electronic Filing Portal under “PDF Submissions”

General PDF Submission form walkthrough

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• The Filer type and Filer category selected determines the types of documents available

• Ensure that the document type is accurate

• Before choosing “Other” make sure the document is not in the list

Re-filings & Additional documents

• All revised or additional documents should be sent by email to the Applications Administrator at [email protected]

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• When re-filing an application or pre-file document, you should email it, not submit it through the e-form portal.

mailto:[email protected]


Filing a Preliminary Prospectus

Evelina Barsukov, Prospectus Review Officer

Lorraine Greer, Prospectus Review Officer

Prospectuses

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• Offering

• Non-offering Types

• Long form (NI 41-101)

• Short form (NI 44-101) Forms

• Shelf (NI 44-102) / PREP (NI 44-103)

• Bought deal (NI 44-101)

• Overnight marketed deal (NI 41-101CP)

• Capital Pool Company (CPC) (NI 41-601)

Procedures Provisions Programs

Choosing your Principal Regulator (PR)

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Specified jurisdictions: • British Columbia • Alberta • Saskatchewan • Manitoba • Ontario • Québec • New Brunswick • Nova Scotia

Ontario

Determining your Principal Regulator (PR)

• Please consider the following connecting factors when choosing your PR:

NP 11-202 s.3.4

(4) The principal regulator for a prospectus filing under this policy is the regulator of the jurisdiction in which

• (a) the issuer's head office is located…

(7) The factors an issuer […] should consider in identifying the PR based on its most significant connection are, in order of influential weight:

• (a) location of management;

• (b) location of assets and operations;

• (c) location of trading market or quotation system in Canada;

• (d) location of securities holders, if the securities are not traded or quoted on a trading market or quotation system in Canada;

• (e) location of underwriter;

• (f) location of legal counsel; and

• (g) location of transfer agent.

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Not considered relevant for Canadian Issuers

Multijurisdictional filings

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OSC PR

Other

Juris.

Dual Other

PR OSC

For information on the passport system, please refer to MI 11-102

SEDAR* Filing Types/Categories

• To create a new non-investment fund prospectus filing:

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Category of Filer

• Other Issuer

Category of Filing

• Securities Offerings

Filing Type

• i.e. Long form, short form, etc.

Filing subtype/document type

• i.e. preliminary, final, amendment, etc.

*System for Electronic Document Analysis and Retrieval

Filing Procedures

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Filing Procedures (continued)

• If filed under the passport system, please indicate “MI 11-102 Passport System and NP 11-202” on SEDAR

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Documents Required to be Filed with a Preliminary Prospectus

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Resource Issuers • 43-101 Technical Reports • Qualified Persons’ Consents

Other Documents

Short Form • Qualification Certificate

Long Form • Auditor’s Comfort Letter

Basic Filing • Cover Letter • Certificated Prospectus • 11-202 Confirmation Letter • Personal Information Forms with Consents

• Material Contract/Agreements • Docs Affecting Rights of Securityholders • Docs Incorporated by Ref. but not yet filed • Decisions Granting Relief

OR

Preliminary Short Form Requirements

• Notice of Intention

Must be filed on SEDAR at least 10 business days prior to filing the short form prospectus

Changes the Issuer’s “Short Form Prospectus Issuer Status” on SEDAR.com to “Yes”

• Qualification certificate

Must be signed by an executive officer and dated the same day as the prospectus

Jurisdictions listed must match prospectus

• Documents incorporated by reference

Must be filed in ALL applicable jurisdictions as of the date of the prospectus

Consider including the filing date of these documents for ease of reference

If filing in Quebec, French versions of the documents incorporated by reference must be filed unless an exemption has been granted by the Autorité des marchés financiers

All documents incorporated by reference must be “public” on SEDAR

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Be aware of the difference between ”filed” and “delivered”

Filed – is generally available to the public Delivered – non-public only

Documents required to be submitted

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Preliminary Final

Cover Letter X X

A certified copy of the prospectus in English (and French, if also filed in Quebec) X X

Blacklined copy of the prospectus X

Confirmation letter (NP 11-202) X X

Qualification certificate (short form only) X

Auditor’s comfort letter (long form) X

Expert Consents X

Reports (NI 43-101 Technical Reports, etc.) X X

Qualified persons consents (Mining issuers only) X X

Qualified persons certificates (Mining issuers only) X

Personal Information Forms (PIFs) with certificates and consents X

Material Contracts/Agreements X X

Documents affecting the rights of securityholders X X

Documents incorporated by reference but not yet filed X

*Undertakings X

*Conditional approval from exchange (IPO or CPC) X

*Escrow Agreement (IPO) X

Submissions to jurisdiction (issuers and non-issuers) X

Copy of any decisions granting exemptive relief X

Cover Letter

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Basic Information about the

filing

Special circumstances

Previous dealings

with regulators

Enclosures

Cover Letter – Basic Information

Issuer’s full name

Type of prospectus

Date of prospectus

Location of the head office

Jurisdictions where filing

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Filing procedure

Cover Letter – Previous dealings with Regulators

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Details of any Pre-files

Exemptions relied upon

Other communication (previous discussions)

Cover Letter - Special Circumstances

Bought Deal

Overnight Marketed Deal

Any other special requests

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Cover Letter - Documents accompanying the prospectus

PIFs

Decision documents

Other documents

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Preliminary Cover Letter example

Re: Models Inc. Short Form Preliminary Prospectus dated November 10, 2017

On behalf of Models Inc. (the “Issuer”), we are filing today a preliminary short form prospectus (the “Prospectus”) dated November 10, 2017.

The head office of the Issuer is in Toronto, Ontario. In accordance with Section 3.4(4)(a) of National Policy 11-202 – Process for Prospectus Reviews in Multiple Jurisdictions (“NP 11-202”), the Ontario Securities Commission (the “Commission”) is the principal regulator for this filing.

The Issuer is filing the Prospectus in each of the provinces and territories of Canada under Multilateral Instrument 11-102 – Passport System and NP 11-202.

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Preliminary Cover Letter example (cont’d)

On September 15, 2017, the Issuer filed a pre-file of the draft Preliminary Prospectus with the OSC and received a disposition.

[Details of disposition in accordance with NP 11-202 s.8.3(3)]

At the time of the pre-file, the required fee was paid to the OSC. We request that this fee be used towards fees payable in connection with the filing of the Preliminary Prospectus. (Pre-file submission ID: PRF1234567890-123) The issuer was granted exemptive relief from the Autorité des marches financiers providing temporary exemptive relief for the translation of all documents incorporated by reference into the Preliminary Prospectus until the filing of the final prospectus. The Issuer intends to complete a bought deal offering of its common shares in accordance with the provisions of s.7.1 of NI 44-101.

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Preliminary Cover Letter example (cont’d)

Completed Personal Information Forms for all current executive officers and directors are being delivered by the Issuer concurrently with the Prospectus or have been previously delivered as detailed below:

[A list of any documents attached or filed on SEDAR]

I trust the enclosed is satisfactory. Please do not hesitate to contact me if you have any questions.

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Director/Officer/Promoter Title(s) SEDAR project Submission

John Doe President and Chief Executive Officer 9753100 #6

Jane Doe Chief Financial Officer Filed herewith n/a

Bob Smith Director 8060402 #3

Karen Jones Director 8675309 #2

Kate Allan Promoter Filed herewith n/a

Personal Information Forms (PIFs)

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Types of PIF Form Certificate & Consent

CSA NI 41-101 Appendix A, Schedule

1 - Part A

TSX TSX Form 4

TSXV TSX Venture Form 2A

Aequitas NEO Aequitas NEO Form 3

NI 41-101

Appendix A

Schedule 1

Part B


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PIF

ALL information must be accurate

ALL the questions must have a response

Any positive response to Questions 6-10 must be

accompanied by an initialed explanation of the events

Complete name of individual (No initials) Date of birth Place of birth Legible writing

Certificate and Consent

Must be attached to the PIF

Executed within 3 years of the filing of the

preliminary prospectus

Must have a manual signature, unlike other documents submitted

electronically

Prospectus Certificates

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Filing Type Forms of Certificate Long Form

NI 41-101F1, Item 37

Issuer Item 37.2

Underwriter Item 37.3

Amendments Item 37.4

Non-offering Item 37.5

Short Form

NI 44-101F1, Item 21

Issuer Item 21.2


Amendments Item 21.4

Shelf Distributions

NI 44-102

Appendix A, Part 1 (Forward Looking Form for Continuous Distribution):

Issuer Item 1.1


Amendments Item 1.4

Appendix B, Part 1 (Non-Forward Looking Form):

Issuer Item 1.1


Amendments Item 1.4

Post-Receipt Pricing

(PREP)

NI 44-103, Parts 3 and 4

Base PREP

Issuer Part 3.2(1), 7. (a)

Underwriter Part 3.2(1), 7. (b)

Amendments Part 3.6

Supplemented PREP

Issuer Part 4.5(2) 3. (a)

Underwriter Part 4.5(2) 3. (b)

Amendments Part 4.7

Prospectus Certificate – Key Points

Date must match the

date on the face page of

the prospectus

Jurisdictions must match

the face page of the

prospectus and SEDAR

Current and accurate certificate language

Appropriate signatories

Correct signature

format

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Best practice - keep the form and order of jurisdictions the same

throughout all the submitted documents, including the marketing materials.

Signatures – General Example #1

Certificate of the Issuer

February 22, 2017

This prospectus constitutes full, true and plain disclosure of all material facts relating to the securities offered by this prospectus as required by the securities legislation of [insert the jurisdictions in which qualified].

(signed) “Jane Smith” (signed) “John Doe”

Chief Executive Officer Chief Financial Officer

(signed) “Stephanie Spielberger” (signed) “Cameron Jameson”

Director Director

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Signatures – General Example #2


February 22, 2017


(signed) “Jane Smith” (signed) “John Doe”


(signed) “Stephanie Spielberger”

Director

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Signatures – Example #3 (CPCs)


February 22, 2017


(signed) “Jane Smith” (signed) “Jane Smith”


(signed) “Stephanie Spielberger” (signed) “Cameron Jameson”

Director Director

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Signature Format – Best Practices

Two names

(signed) John Smith

(signed) “John Smith”

“John Smith”

Unacceptable:

John Smith

More than two names

(signed) John James Smith

(signed) “J. James Smith”

“John J. Smith”

Unacceptable:

(signed) J.J. Smith

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For electronic filings, signatures must be in typed form only NI 13-101 4.3(1)

NP 11-202 Confirmation Letters

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Type Section

Preliminary 7.2(2)

Preliminary Amendment 10.1(2)

Final 7.3(4)

Final Amendment 10.4(4)

Any non-applicable (N/A) items must be clearly stated

Prospectus Timing

Offering type Prospectus type Timing of

filing OSC Timing of issuance of receipt

Prospectuses

generally

Preliminary or Final

(long/short form) Before 12:00 pm Same day

After 12:00 pm Generally before 12:00 pm on the next business day

Bought deal

Preliminary

(short form)

Before 3:00 pm Same day

Issuer should advise prospectus review officer by email before 12:00 pm on the

day of filing that the preliminary prospectus will be filed by 3:00 pm that day

After 3:00 pm Before 12:00 pm on the next business day

Final

(short form)


After 12:00 pm Before 12:00 pm on the next business day. Receipt is dated the next business day

Overnight

marketed

offering

Preliminary

(short form)

Before 12:00 pm Issuer must advise prospectus review officer by email of plans to conduct an

overnight marketed offering no later than morning on day of launch

OSC will make reasonable efforts to issue the receipt at or just after 4:00 pm same

day

After 12:00 pm Must discuss with OSC whether accommodation is possible. No assurances can

be made

Final

(short form)


After 12:00 pm Before 12:00 pm on the next business day. Receipt is dated the next business day

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Fees and Fee codes

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Prospectus Type Fee code Fee amount

Short Form NI 44-101

(i.e., regular, shelf, PREP, MJDS) AI4A30 $3,800

Long Form NI 41-101

(i.e., regular, PREP, CPC, MJDS, etc.) AI4A10 $3,800

Technical Report (each report) AI4A20 $2,500

• Filing fee must be paid with the filing of the preliminary prospectus

Preliminary prospectus face page disclosure (“Red Herrings”)

Filing Type Preliminary prospectus face page disclosure

Long Form Prospectus NI 41-101F1 (Item 1)

Short Form Prospectus NI 44-101F1 (Item 1)

Short Form Shelf Prospectus NI 44-101F1 (Item 1) and NI 44-102 (Part 5, s. 5.5)

Long Form PREP

Short Form PREP

NI 41-101F1 (Item 1) and NI 44-103 (Part 3.2), or

NI 44-101F1 (Item 1) and NI-44-103 (Part 3.2)

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Continuous Disclosure

Sheryl Antonio, Financial Examiner

Amy Fraser, Financial Examiner

Andy Nguyen, Acting Financial Examiner

Specified Requirement

Specified requirement: the requirement to file within the time period prescribed by securities legislation one or more of the following:

• annual financial statements;

• interim financial report;

• annual or interim MD&A;

• annual information form;

• certification of filings under National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings.

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Filing Deadlines Document Non-Venture Venture

Annual Financial

Statements on or before the earlier of

(i) the 90th day after the end of its most recently

completed financial year; and

(ii) the date of filing, in a foreign jurisdiction, annual

financial statements for its most recently completed

financial year

on or before the earlier of

(i) the 120th day after the end of its most recently

completed financial year; and

(ii) the date of filing, in a foreign jurisdiction, annual

financial statements for its most recently completed

financial year. Annual and Interim

MD&A on or before the earlier of

(a) the filing deadlines for the annual financial statements

and each interim financial; and

(b) the date the reporting issuer files the financial

statements


(a) the filing deadlines for the annual financial statements

and each interim financial report; and

(b) the date the reporting issuer files the financial

statements

Interim Financial Report on or before the earlier of

(i) the 45th day after the end of the interim period; and

(ii) the date of filing, in a foreign jurisdiction, an interim

financial report for a period ending on the last day of the

interim period; or


(i) the 60th day after the end of the interim period; and

(ii) the date of filing, in a foreign jurisdiction, an interim

financial report for a period ending on the last day of the

interim period.

Annual Information

Form on or before the 90th day after the end of the reporting

issuer’s most recently completed financial year; or

(b) in the case of a reporting issuer that is an SEC issuer

filing its AIF on Form 10-K or Form 20-F, on or before the

earlier of

(i) the 90th day after the end of the reporting issuer’s

most recently completed financial year; and

(ii) the date the reporting issuer files its Form 10-K or

Form 20-F with the SEC.

N/A

Note: If a venture issuer voluntarily files an AIF for a

financial year after it has filed its annual financial

statements, annual MD&A and annual certificates for the

financial year, the venture issuer must file on the same

date that it files its AIF a separate annual certificate in the

wording prescribed by the required form

Certificates on the later of the dates on which it files the following:

(a) its AIF if it is required to file an AIF under NI 51-102; or

(b) its annual financial statements and annual MD&A.

on the later of the dates on which it files the following:

(a) its AIF if it is required to file an AIF under NI 51-102; or

(b) its annual financial statements and annual MD&A.

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Certificates

• All certificates should be dated the same date the certificate is filed on SEDAR

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Certificate Form

Form 52-109F1 Certification of Annual Filings - Full Certificate

Form 52-109FV1 Certification of Annual Filings - Venture Issuer Basic Certificate

Form 52-109F1 - IPO/RTO

Certification of Annual Filings Following an Initial Public Offering, Reverse Takeover or Becoming a Non-Venture Issuer

Form 52-109F1R Certification of Refiled Annual Filings

Form 52-109F1 - AIF Certification of Annual Filings in Connection with Voluntarily Filed AIF

Form 52-109F2 Certification of Interim Filings - Full Certificate

Form 52-109FV2 Certification of Interim Filings - Venture Issuer Basic Certificate

Form 52-109F2 - IPO/RTO

Certification of Interim Filings Following an Initial Public Offering, Reverse Takeover or Becoming a Non-Venture Issuer

Form 52-109F2R Certification of Refiled Interim Filings

Timing

• Participation Fees - Part 2 of OSC Rule 13-502 Fees

Participation fees are due to be paid by the earlier of:

the filing due date of the annual financial statements, and

the date of filing of the annual financial statements

• Fill out the appropriate participation fee form

• Filing Due Dates Calendar

http://www.osc.gov.on.ca/en/Companies_filing-calendar_index.htm

• Temporary Hardship Exemption – Part 3.1 of NI 13-101

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Reporting Issuer Classifications

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Participation Fee Forms

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• Form 13-502F6

• Form 13-502F3A

• Form 13-502F2 • Form 13-502F1

Class 1 & 3B

Class 2

Subsidiary Exemption

Class 3A

Class of the issuer is based on their status as at the end of their

previous financial year, not at the time of filing


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Specified Trading Periods

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Late Participation Fees

Late participation fees may apply if a company is late in paying its participation fee

Part 2.7 of OSC Rule 13-502 Fees

0.1% of the unpaid portion of the participation fee for each business day

Not applicable if less than $100

No maximum amount

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Late Document Fees

Late document fees will apply to certain documents

Appendix D of OSC Rule 13-502 Fees

Annual and interim financial statements

Annual information form

Form 13-502 (Participation fee forms)

$100 per business day per document

Maximum amount of $5,000 per calendar year

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Specified Default

Specified default: a failure by a reporting issuer to comply with the requirement to file, within the time period prescribed, one or more of the following:

• annual financial statements;

• interim financial report;

• annual or interim MD&A;

• annual information form;

• certification of filings under National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings.

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Responding to a specified default

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For more details, refer to the definitions in Multilateral Instrument 11-103.

FFCTO

Reporting Issuer List

• http://www.osc.gov.on.ca/documents/en/Investors/is_issuers.pdf

National Cease Trade Order Database

• https://cto-iov.csa-acvm.ca

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We do not grant extensions on filing deadlines.

http://www.osc.gov.on.ca/documents/en/Investors/is_issuers.pdf



https://cto-iov.csa-acvm.ca/







Revocation of a FFCTO

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FFCTO in effect for less than 90 days

• No formal application (filing constitutes application)

• Late fees applicable

• Revocation generally within 2 business days

FFCTO in effect for more than 90 days

• Formal application required (section 144 of the Ontario Securities Act)

• Application fee

• Late fees applicable

Management Cease Trade Orders (MCTOs)

The OSC will consider granting an MCTO if the reporting issuer satisfies the eligibility criteria set out in Section 6 of NP 12-203.

MCTO Application

• Submitted 2 weeks before the due date for the required filings

• Filed through the General PDF Submission Portal on the OSC website, not through the Applications Portal

• Send a copy of the application to each CSA regulator in the other jurisdictions where it is a reporting issuer

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MCTO Application

In its application, the reporting issuer should:

• Identify the specified default, the reasons for the default and the anticipated duration of the default

• Explain how the issuer satisfies each of the eligibility criteria described in section 6 of NP 12-203

• Set out a detailed remediation plan that includes a realistic timetable for remedying the default

• Include consents signed by the CEO and CFO (or equivalent)

• Provide Personal Information Forms (PIFs) for the CEO and CFO

• Include a copy of the proposed or actual default announcement

• Confirm that the issuer will comply with the alternative information guidelines

• Include a copy of the issuer undertaking to cease certain trading activities

• Describe the issuer’s blackout policies and other policies and procedures relating to insider trading

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MCTO Application


• Full PIFs are required to be filed or referenced in the MCTO application

Can I use a PIF previously filed on SEDAR?

• Yes, if the consent on the PIF is dated within the last three years.

• You must indicate in the MCTO application the SEDAR project number and submission number where the PIF can be found.

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Alternative Information Guidelines

Default Announcement

• If the issuer decides to apply for a MCTO the issuer should immediately file a default announcement by way of news release (and material change report, if required) on SEDAR containing the information set out in Section 9 of NP 12-203

Bi-weekly Default Status Reports

• During the period of the MCTO, the reporting issuer must issue bi-weekly default status reports in the form of news releases with the information set out in Section 10 of NP 12-203

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Default Announcement

Default Status Reports

Alternative Disclosure

Conversion of MCTO to FFCTO

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Non-compliance with the alternative

information guidelines

Failure to remedy default within 2 months from the

date of the MCTO

Subsequent defaults

Possible

conversion

to FFCTO

Making CD filings private on SEDAR

• Generally, we will change the status of CD filings for the following reasons:

Filed on wrong issuer profile

Confidential information (e.g. personal information)

Technical errors on a redacted document

• Generally, we will not change the status of CD filings for the following reasons:

Incorrect document type

Duplicate filing

Non-material errors

• If you require a document to be marked private:

Send a request form to the Financial Examiners at [email protected]

You may email [email protected] to request a copy of the required request form

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Making CD filings public on SEDAR

• If a document is filed on SEDAR under a document type that is private upon filing and you would like it to be marked public, send a request by email to [email protected]

• If the document is related to a prospectus filing, the request should be sent to our Prospectus Group at [email protected]

• If the document is related to an Investment Fund issuer, the request should be directed to our Investment Funds and Structured Products Branch at [email protected]

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SEDAR Profiles

• Should be up-to-date at all times

Email address is the first point of contact (including FFCTO notifications)

• Part 5.1(3) of NI 13-101 An issuer must update their SEDAR profile within 10 days of any change including:

Change in auditor

Change in year end

Name change

Listing or delisting on a stock exchange

Change in head office could result in a change in Principal Regulator

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Reminders

• We cannot provide legal or accounting advice or offer opinions on legal or financial matters.

• We do not review draft documents prior to filing on SEDAR.

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Insider Reporting

Elizabeth Henry, Insider Reporting Review Officer

Fahd Anjum, Acting Insider Reporting Review Officer

Insider Reporting Overview

• Who is a reporting insider?

Definition can be found in NI 55-104 Part 1

• What is SEDI?

System for Electronic Disclosure by Insiders

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Issuer Profile Supplements

• What is an issuer profile supplement?

Contains information about the issuer

NI 55-102F3

• Initial filing of an issuer profile supplement

Within 3 days of becoming a reporting issuer

• Amendments to an issuer profile supplement

Updates should be completed immediately

NI 55-102 2.3(3)

• If any changes are made to SEDAR profiles, ensure that SEDI is also updated

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Insider Profiles

Updates within

10 days

Insider name or address

change

Change in relationship

to issuer

Ceases to be an insider

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• What is an insider profile?

• Contains contact information for the insider (NI 55-102F1)

• Initial filing of an insider profile

• Before the insider files an insider report on SEDI

• Additional contact information for agents should be up-to-date

Ceased to be an Insider

• If I am no longer an insider, what do I have to do on SEDI?

Amend the insider profile

• Note to Agents: If you are made aware that an insider/person has ceased to be an insider, please update the profile immediately.

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• The insider should contact the CSA helpdesk to have the access key reset:

When an agent is no longer filing for an insider

If the insider has forgotten the access key

Insider access key

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Issuer grant reports

Exemption under Part 6 of NI 55-104:

• Grant report must be filed by the issuer within 5 days of the grant for insiders to rely on the exemption

• Insiders cannot rely on the exemption when grant reports are not filed

• If a grant report has been filed, the insider can rely on the exemption and file up to 30 days after the end of the calendar year

• See NI 55-316 3.4 for further detail

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Other Common Issues

Date of Transaction

• Trade date not the settlement date

Late filings

• Subject to a late fee in OSC Rule 13-502 Appendix D

Cheque payments

• Attach Insider ID and SEDI Invoice number with waiver requests

• Include a copy of the invoice

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Other Common Issues

Archiving of Securities

• Archive securities that are no longer outstanding

Adding & Updating security designations

• Demonstration in previous presentation

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Waiver Requests

Waivers for late fees for insider reports will generally NOT be granted for the following:

• misunderstanding the 5 day reporting requirement (e.g., reporting within 5 business days rather than 5 calendar days)

• mistakenly report within 5 days of the settlement date rather than the trade date

• delays caused by vacations or business trips

• miscommunication between the insider and their agent or broker (e.g., failure of a broker to provide the insider with the details of a trade)

• negligence of filing agents

• unfamiliarity with the legal obligations

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The Exempt Market

Evan Marquis, Exempt Market Review Officer

Mia Li, Regulatory Support Clerk

What is the Exempt Market?

• A segment of Canada’s capital markets where securities are exempt from the prospectus requirements.

• Utilized by Canadian and foreign companies, both public and private, selling securities to institutional investors and qualified investors.

• Prospectus exemptions can help a company raise money without the time and expense of preparing a prospectus.

• Investors often receive less information about the companies selling and securities being purchased. These securities may be more difficult to resell.

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Timing Requirements for filing Form 45-106F1

• Form 45-106F1s for non-investment fund issuers must be filed no later than 10 days after the distribution. Note: days = calendar days

• An issuer may use one report for multiple distributions occurring within 10 days of each other, provided the report is filed on or before the 10th day following the first distribution date.

• If the 10th day falls on a weekend or a statutory holiday in Ontario, the filing would be due on the next business day in Ontario.

• Eastern Standard Time is used to determine due dates and filing times.

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Sample calculation #1 Distribution period and late filing

October

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*Oct 2 – Oct 12 sample distribution period.

**Report is filed on Oct 13 and is 1 business day late.

1st Distribution

Date

Due

Date Late

1 3 2 5 4

7 6 9 8

1

10


Sample calculation #2 Distribution period and late filing

October

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*If start date was Oct 4 the filing would be due on Oct 16.

**Report is filed on Oct 17 and is 1 business day late.

***Multiple distribution dates of Oct 4 and Oct 12 can be combined in one report.

Due

Date Late

10th

Day 2nd Distribution

Date

1st Distribution

Date 1 3 2

5 4 7 6 9 8 10

Late Fees

• Note that OSC Rule 13-502 Fees provides information regarding late fees applicable to the late filing of certain documents in Appendix D, Columns A and B. Specifically, for the exempt market Form 45-106F1:

(C) Fee for late filing Form 45-106F1

• $100 for every business day following the date the form was required to be filed by a person or company until the date the form is filed, to a maximum of $5,000 for all forms required to be filed by the person or company in the calendar year.

NOTE: We prefer that issuers, underwriters and service providers wait for their fee letter before sending payment for late fees, if applicable.

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The Exempt Market Page

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How to File Form 45-106F1

• You can access the e-form via the Exempt Market page at: http://www.osc.gov.on.ca/en/exempt-market.htm

• Via the OSC’s website and accessing the OSC’s Electronic Filing Portal link (found under Quick Links) and then selecting Form 45-106F1 Report of Exempt Distribution.

• Scroll down to “File a Form 45-106F1”. Or, via the Exempt Market page, go to “Forms and Filing Requirements” first. Check “Non-Investment Fund” or “Investment Fund”, as applicable.

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http://www.osc.gov.on.ca/en/exempt-market.htm



http://www.osc.gov.on.ca/en/home.htm


http://www.osc.gov.on.ca/en/form45106f1.htm





• Next, enter the distribution period. A calendar will pop-out for start and end dates.

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• Refer to the Instructions to New Form link for guidance.

• Click “Online Form (New Form)” to begin filling out the form.

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http://www.osc.gov.on.ca/documents/en/Securities-Category4/45-106f1_instructions_20160630.pdf


Amending a submission

• Select “Amended report” in Item 1 of the e-form and reference the original submission ID (EDR) number.

• Indicate in the comment box what the amendment is changing.

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1)

3)

2)

Save Draft / Amendment Feature

• Click on the "Save" button, located at the upper right corner of the e-form

• Enter the name of the issuer or underwriter

• A link to the saved e-form will be emailed to you.

The link to the saved e-form will remain active for 30 days prior to submission.

Once you have submitted the e-form, the link will only be available for 14 days from the date of submission.

• You can print or save a copy of the e-form or email the link to others for review.

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103

• Enter the issuer or underwriter name and email address in order to receive an email link to draft


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Sample Email with Link to form:

Activity Fees and Supplementary Fees

• Pursuant to OSC Rule 13-502 Fees, Part 6 – Activity Fees item 6.1 reads:

Activity fees — General — A person or company must, when filing a

document or taking an action described in any of Rows A to O of Column A of Appendix C, pay the activity fee shown opposite the description of the document or action in Column B.

• In particular: Appendix C – Activity Fees, Row B2 states:

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Activity Fees and Supplementary Fees

• Activity fees can be paid by:

Credit Card (at the time of filing only)

Wire Transfer (please send an email request for wire payment instructions) Note that wire transfers have an additional $15 fee

Cheque made payable to the “Ontario Securities Commission” and sent to:

Corporate Finance Department

20 Queen Street West, Suite 2200, P.O. Box 55

Toronto, Ontario M5H 3S8

Attention: Exempt Market Filings

Note: When submitting payment, please include the fee letter and reference the EDR number and issuer or underwriter name for the report.

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Use of the OM (s.2.9) exemption in Ontario

• The offering memorandum (OM) prospectus exemption came into force in Ontario on January 13, 2016.

• Issuers must file the OM and any marketing materials used in connection with a distribution under the OM Exemption with the OSC. It can be attached or referenced by a prior filing number at item 7h) of the 45-106F1. This documentation may also be submitted via the Electronic Filing Portal under the appropriate document types.

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Activity Fees and Supplementary Fees • If an issuer relies on the section 2.9 (Offering Memorandum) exemption in

Ontario, additional, supplementary activity fees may apply.

• Specifically, if the Ontario distribution amount raised under section 2.9 exceeds $2,000,000, OSC Rule 13-502 Fees, Appendix C – Activity Fees, Row B2.1 states that the fee is the:

Greater of (i) $500 or (ii) 0.025% of the gross proceeds realized by the issuer from the distribution in Ontario

• For example, ABC Capital Inc. raises $2,600,000 in Ontario under s.2.9. The total activity fee owing would be $650, (.025 of $2,600,000). If the company paid $500 upon filing their report, an additional $150 would be owed.

• The Fees Administrator will send a fee letter for the correct total activity fee or additional supplementary amount, as applicable.

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Use of the OM (s.2.9) exemption in Ontario

CONTINUOUS DISCLOSURE REQUIREMENTS

• Generally, pursuant to ss.2.9(17.5) of NI 45-106, an issuer must, within 120 days after the end of each of its financial years, deliver annual financial statements to the securities regulatory authority.

See 45-106CP 3.8(8) for further detail

• For a change in financial year end, a Notice of change in financial year end is required to be delivered to the OSC pursuant to ss.2.9(17.13) of NI 45-106.

• A Notice of Use of Proceeds (Form 45-106F16) must also be delivered concurrently with annual financial statements the OSC.

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Late Fees for Annual Financial Statements

• As previously mentioned, OSC Rule 13-502 Fees provides information regarding late fees applicable to the late filing of certain documents in Appendix D, Columns A and B. Specifically, regarding financial statements, the late fee is calculated:

$100 for every business day following the date the form was required to be filed by a person or company until the date the form is filed, to a maximum of $5,000 for all forms required to be filed by the person or company in the calendar year.

NOTE: This annual cap is independent of the cap for issuers and underwriters and their late form 45-106F1 submissions.

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Electronic Filing Portal (General Submissions)

• Ongoing continuous disclosure documents, including annual audited financial statements can be filed via the General PDF Submissions e-form of the OSC’s Electronic Filing Portal.

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https://eforms.osc.gov.on.ca/e-filings/generic/form.do?token=ec7a3cb6-d86d-419d-9c11-f1febe403cb6



Electronic Filing Portal (General Submissions)

Common Exempt Market Document Categories

• Delivery of an offering memorandum including investor presentations, or any amendment pursuant to s. 5.4 of OSC Rule 45-501 Ontario Prospectus and Registration Exemptions [Non-Investment Funds]

• Marketing materials required to be filed pursuant to s.2.9(17.1) of NI 45-106 Prospectus Exemptions

• 45-106F16 Notice of Use of Proceeds

• Notice of change in financial year end required to be delivered pursuant to s. 2.9(17.13) of NI 45-106 Prospectus Exemptions

• Annual financial statements required to be delivered pursuant to s. 2.9(17.5) of NI 45-106 Prospectus Exemptions

NOTE: Refer to Electronic Filing Portal for a complete document list.

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Common Form Compliance Errors

1. UNIQUE PURCHASER COUNT

• The number of unique Ontario purchasers indicated on the Schedule 1 does not match the number indicated on the Form 45-106F1.

In calculating the number of unique purchasers per row, count each purchaser only once.

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1. UNIQUE PURCHASER COUNT

• For example, John Smith, an Ontarian makes 3 separate purchases under the accredited investor exemption within the same report of exempt distribution and appears three times on Schedule 1. If no other purchasers were on the report, the Number of purchasers field at item 7f) for Ontario and the accredited investor exemption would indicate 1 and the Total number of unique purchasers would likewise be 1.

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2. ONTARIO DISTRIBUTION AMOUNT

• The total Ontario distribution amount specified on the Schedule 1 does not match the form.

3. DISTRIBUTON DATES

• The distribution dates indicated on the Schedule 1 appear to be different than those referred to on the Form 45-106F1.

Could have fee implications or additional report(s)

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4. EXEMPTIONS DO NOT MATCH

• The exemptions relied on in the Schedule 1 appear to be different than those referred to on the Form 45-106F1. Also, subsections should be added, if applicable, in the appropriate columns.

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5. PURCHASER DATA IS INCORRECT/MISSING

• All purchaser information must be completed and correct.

• Our preference is that fields be left blank if the data is not required.

• Please do not add additional fields such as investment account numbers and types.

• If two or more individuals have purchased a security as joint purchasers, complete Schedule 1 by providing information for each purchaser under the columns for family name, first given name and secondary given names, if applicable, and separating the individuals' names by an ampersand.

For example, if Jane Jones and Robert Smith are joint purchasers, indicate "Jones & Smith" in the family name column, and "Jane & Robert" in the first given name column of the Schedule 1 Excel template.

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6. NRD NUMBER OR REGISTRANT NAME IS DEFICIENT

• The NRD number and registrant firm name do not match in the following item(s) on the Form 45-106F1: 4 (Underwriter Information) or Item 8 (Compensation Information).

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7. ISSUER NAME

• The Issuer name and/or certification date was omitted or incorrect on the Schedule 1.

119


8. INCORRECT TEMPLATE/CANNOT OPEN SCHEDULE

• Schedule 1 and/or 2 were filed using an incorrect template or cannot be opened.

CSA approved templates can be found:

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Temporary Technical Difficulties • If you experience technical issues when filing your 45-106F1, please contact

the OSC’s Inquiries and Contact Centre during business hours.

• Local (Toronto) 416-593-8314

• Toll-free (North America) 1-877-785-1555

• TTY 1-866-827-1295

• E-mail [email protected]

• If you cannot file before the deadline, an electronic version of the form can be sent by email with the Schedule 1 and, if applicable, Schedule 2 to the [email protected] inbox and also with a copy to [email protected].

• Please also explain your technical issue(s) and indicate that the report is being filed under a temporary technical difficulties exemption and also note that a copy must be transmitted through the e-filing portal as soon as practical after the technical difficulty has been resolved.

121




Questions?

122

Appendix A - Additional Resources

General

• Unofficial version of OSC Rule 13-502 Fees

http://www.osc.gov.on.ca/documents/en/Securities-Category1/rule_20170208_13-502_unofficial-consolidated.pdf

Insider Reporting

• February 2017 SME Presentation: https://youtu.be/8Iw87uwROgg

• Ontario Staff Notice 51-726 Report on Staff’s Review of Insider Reporting and User Guide for Insiders and Issuers

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https://youtu.be/8Iw87uwROgg

Appendix A - Additional Resources

Exempt Market Filings

• The OSC’s Exempt Market Website


• CSA Staff Notice 45-308 (Revised) Guidance for Preparing and Filing Reports of Exempt Distribution under National Instrument 45-106 Prospectus Exemptions

http://www.osc.gov.on.ca/en/SecuritiesLaw_csa_20160407_45-308_revised-guide-exempt-distribution.htm

• OSC Report on Exempt Market Activity (2017)

http://www.osc.gov.on.ca/en/NewsEvents_nr_20170615_report-exempt-market-activity.htm

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Appendix B – Contact Information

THE OSC SME INSTITUTE 125

Contact Information

OSC Contact Centre Email: [email protected] Phone: 416-593-8314 or 1-877-785-1555

Eden Williams Manager, Regulatory Administration,

Corporate Finance

Email: [email protected]

David Mattacott

Applications Administrator Email: [email protected]

Evelina Barsukov

Lorraine Greer

Prospectus Review Officers


Sheryl Antonio

Amy Fraser

Andy Nguyen

Financial Examiners


Elizabeth Henry

Fahd Anjum

Insider Reporting Review Officers

Email (General): [email protected] Email (Waivers): [email protected]

Evan Marquis

Exempt Market Review Officer Email: [email protected]