CSA Notice of Amendments to National Instrument 33-105 Underwriting Conflicts to Streamline Disclosure Requirements for Private Foreign Securities Offerings to Certain Canadian Investors

June 29, 2015

On June 25, 2015, the Canadian Securities Administrators (the “CSA”) implemented amendments to National Instrument 33-105 Underwriting Conflicts (“NI 33-105”), which have been made by each member of the CSA (the “Amendments”). The Amendments will come into force on September 8, 2015, provided the jurisdictions which require ministerial approval receive it.

The Amendments provide an exemption from the disclosure requirements relating to conflicts of interest between an issuer and dealer in connection with an offering by a foreign issuer to sophisticated investors in Canada made on a private placement basis.  The purpose of the Amendments is to provide relief from one of the disclosure requirements that results in the preparation of a “wrapper” when foreign securities are offered by way of prospectus exemption in Canada as part of a global offering. The Amendments require that the purchaser of the securities must be a permitted client, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. The intention of the Amendment is to facilitate the participation in foreign securities offerings by sophisticated Canadian investors that qualify as permitted clients.

The Amendments will eliminate the requirement to provide connected and related issuer disclosure for securities offerings that qualify as “eligible foreign securities”.  The Amendments define, eligible foreign securities as securities that are offered primarily in a foreign jurisdiction and that are:

  • Issued by an issuer:
    • that is incorporated, formed or created under the laws of a foreign jurisdiction,
    • that is not a reporting issuer in a jurisdiction of Canada,
    • that has its head office outside of Canada, and
    • that has a majority of the executive officers and a majority of the directors ordinarily resident outside of Canada;


  • Issued or guaranteed by the government of a foreign jurisdiction.

The Amendments will apply to offerings of both non-investment fund issuers and non- redeemable investment funds that meet the criteria listed above. Under current paragraph 1.3(b) of NI 33-105, the rule does not apply to a distribution of mutual fund securities. Non-Canadian investment fund issuers should note there are other Canadian regulatory requirements specific to investment funds that may still apply, such as investment fund manager registration. Permitted clients that are investment funds should also note that other Canadian regulatory requirements may restrict a Canadian investment fund’s ability to purchase securities of a non-Canadian investment fund issuer, such as fund on fund restrictions.

As a result of the Amendments, a number of related amendments were also concurrently published:

  • Multilateral Instrument 45-107 Listing Representation and Right of Action Disclosure Exemptions,
  • Ontario amendments to OSC Rule 45-501 Ontario Prospectus and Registration Exemptions, and
  • An Ontario-specific amendment to Form 45-106FI Report of Exempt Distribution.

These amendments generally relate to disclosure of statutory rights of action and restrictions on the making of representations that securities will be listed or quoted on an exchange or quotation system. This information is also typically included in a wrapper prepared for foreign offerings.   For more information, please refer to the CSA Notice of Amendments to National Instrument 33-105 Underwriting Conflicts at https://www.bcsc.bc.ca/Securities_Law/Policies/Policy3/PDF/CSA_Notice__June_25__2015/.


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