Release No. 33-6902

Release No. 34-29354

Release No. 39-2267

Release No. IC-18210

Release No. IS-291

June 21, 1991

56 Fed. Reg. 30069 - July 1, 1991

AGENCY: Securities and Exchange Commission

ACTION: Final Rule

[Lawyer Links Note: Correcting Amendment 33-6902A]

MULTIJURISDICTIONAL DISCLOSURE AND MODIFICATIONS TO THE CURRENT REGISTRATION AND REPORTING SYSTEM FOR CANADIAN ISSUERS

SUMMARY: The Securities and Exchange Commission (the Commission) is announcing the adoption of rules, forms and schedules intended to facilitate cross-border offerings of securities and continuous reporting by specified Canadian issuers. To remove unnecessary impediments to transnational capital formation, this multijurisdictional disclosure system permits Canadian issuers meeting eligibility criteria to satisfy certain securities registration and reporting requirements of the Commission by providing disclosure documents prepared in accordance with the requirements of Canadian securities regulatory authorities. The multijurisdictional disclosure system also allows certain cash tender and exchange offers for securities of Canadian issuers to proceed in accordance with Canadian and provincial or territorial tender offer requirements instead of in accordance with Commission tender offer requirements.

In connection with the multijurisdictional disclosure system, the Commission also is announcing the adoption of revisions to existing rules and forms to permit registration and reporting under the Securities Act of 1933 and the Securities Exchange Act of 1934 by Canadian foreign private issuers on the same basis as other foreign private issuers.

Concurrently with the publication of this Release, the Canadian Securities Administrators are publishing a National Policy Statement that adopts a largely parallel multijurisdictional disclosure system in Canada. That system permits U.S. issuers to satisfy certain securities registration and reporting requirements in Canada using disclosure documents prepared in accordance with Commission requirements. That National Policy Statement is published as an appendix to this Release.

EFFECTIVE DATE: July 1, 1991.

FOR FURTHER INFORMATION CONTACT: Anita Klein, Office of International Corporate Finance, Division of Corporation Finance at (202) 272-3246; John C. Maguire, Office of Tender Offers, Division of Corporation Finance at (202) 272-3097; Felicia Smith, Office of Chief Counsel, Division of Corporation Finance at (202) 272-2573; Robert Bayless, Office of the Chief Accountant, Division of Corporation Finance at (202) 272-2553; Nancy Sanow or George Scargle, Office of Legal Policy and Trading Practices, Division of Market Regulation at (202) 272-2848; Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549.

SUPPLEMENTARY INFORMATION:  The Commission is adopting new Forms F-7, F-8, F-9, F-10 and F-80 under the Securities Act of 1933 (the Securities Act); new Form 40-F and new Schedules 14D-1F, 14D-9F and 13E-4F under the Securities Exchange Act of 1934 (the Exchange Act); and new Form F-X under the Securities Act, the Exchange Act and the Trust Indenture Act of 1939 (the Trust Indenture Act). The Commission further is adopting: new Rule 467, revisions to Rules 158, 175, 424, 473 and 502 and revisions to Forms S-2, S-3, S-4, S-8, S-11, F-1, F-2, F-3 and F-4 under the Securities Act; new Rules 12h-4, 13a-3, 13e-4(g), 14d-1(b), 14e-2(c), 15d-4, and 15d-5(c), revisions to Rules 3a12-3(b), 3b-6, 12g-3, 12g3-2, 13a-10, 13a-16, 15d-5(b), 15d-10 and 15d-16, and revisions to Forms 20-F, 6-K and 10-K under the Exchange Act; new rules 4d-9 and 10a-5 and revisions to Rules 0-11 and 10a-4 and revisions to Forms T-1 and T-6 under the Trust Indenture Act; revisions to Rules 3-01, 3-02, 3-12, and 3-19 of Regulation S-X; revisions to Items 302, 402, 404 and 601 of Regulation S-K; revisions to Rules 30-1(f) and 30-3 of the Commissions Rules Delegating Authority to Division Directors; and revisions to Rule 24 of the Commissions Rules of Practice.

Table of Contents

I. EXECUTIVE SUMMARY

The multijurisdictional disclosure system with Canada (MJDS) being adopted by the Commission is intended to facilitate the free flow of capital. As a result of the MJDS, a securities offering made in two countries will be regulated in only one. Cross-border offerings in the United States and Canada thus can be made more efficiently and at less expense. Offerings of investment grade securities and offerings of equity securities by certain large issuers, rights offerings, exchange offers and business combinations, all may be conducted under the MJDS. Canadian issuers that meet specified eligibility tests may register securities with the Commission through disclosure documents they have prepared for Canadian regulatory authorities. In addition, specified Canadian issuers may use Canadian disclosure documents to satisfy the Commissions periodic disclosure requirements and tender offer regulations. Pursuant to new rules being adopted under the Trust Indenture Act of 1939 (the Trust Indenture Act), ¹ Canadian institutional trustees may act as sole trustees in MJDS debt offerings, and exemptions from certain Trust Indenture Act provisions are established for indentures governing MJDS debt securities.

The MJDS is not available for securities issued by investment companies that are registered or required to be registered under the Investment Company Act of 1940 (the Investment Company Act), ² but it is available to investment companies exempt from registration under the Investment Company Act.

In conjunction with the MJDS, the Commission is adopting revisions to rules and forms that affect all Canadian issuers. All Canadian foreign private issuers are now eligible to use the forms designed for registration and reporting by foreign companies under the Securities Act of 1933 (the Securities Act) ³ and the Securities Exchange Act of 1934 (the Exchange Act). ⁴ Moreover, all Canadian foreign private issuers are now exempt from the Commissions proxy requirements and from application of the share ownership reporting requirements and short-swing profit recapture provisions of the Exchange Act.

Concurrently with this release, the Canadian Securities Administrators (CSA) are publishing a National Policy Statement that adopts a multijurisdictional disclosure system for U.S. issuers in Canada. ⁵ In addition, as a result of coordination by the Commission and Canadian regulators with the North American Securities Administrators Association (NASAA), securities regulators at the state level are in the process of adopting rules to accommodate MJDS offerings. ⁶

While Canada is the partner of the United States in this inaugural multijurisdictional disclosure initiative, the MJDS is designed with the intention of mitigating on a broader scale the difficulties posed by multinational offerings. Thus, the Commission is continuing its work with securities regulators of other countries with a view toward extending the multijurisdictional disclosure system. In addition, the Commission has proposed rules that would facilitate rights offers and exchange and tender offers relating to foreign securities held in limited amounts in the United States on a similar basis as the MJDS. ⁷

II.BACKGROUND

In recent years, there has been substantial growth in both U.S. investors purchases of foreign securities and offerings by U.S. issuers outside the United States. ⁸ Part of the growth in such transactions has consisted of an increase in the number of offerings made simultaneously in two or more countries, one of which may be the country of the issuer. Such offerings typically are made when the issuer desires to expand the geographic base of its security holders, when the issuer wishes to increase the market for its securities internationally, or when strategic reasons exist (for example, to protect against takeover attempts). In other cases, such offerings are made because the relative cost of financing so dictates, the size of the offering is such that it cannot be absorbed by the issuers domestic market, or the issuer needs to reach a particular group of securityholders or a broader investor base.

With the increase in U.S. ownership of foreign securities, the unwillingness of foreign issuers to extend rights offers, business combinations, exchange offers or cash tender offers to U.S. shareholders has become increasingly significant. Rather than comply with the requirements of regulators in more than one country, foreign issuers choose at times to exclude jurisdictions such as the United States from their offerings. As a result, U.S. holders are denied the opportunity to realize significant value on their foreign investments. ⁹

In light of the growth of multinational offerings and the concerns of U.S. investors wishing to participate in them, the Commission has been making significant efforts to remove impediments to transnational capital formation without unduly disadvantaging U.S. issuers in the U.S. markets or failing to afford the protections intended by the Securities Act and the Exchange Act to those buying securities in the U.S. capital markets. The Commission has accommodated various foreign disclosure policies and business practices, and has special forms available for use by foreign issuers. Nevertheless, when a multinational offering includes a public U.S. tranche, the disclosure requirements established by the Commission may dictate the addition of information to selling documents prepared in accordance with another jurisdictions rules. ¹⁰ In addition, attempting to comply with the requirements of multiple jurisdictions can be expensive not only because of the cost of retaining local accountants and lawyers, but also because of the additional time needed, since conditions advantageous to the issuer may prevail in the capital markets only for a limited period. Also, because registration under the Securities Act brings with it periodic reporting requirements under the Exchange Act, a foreign issuer deciding whether to register securities must consider the burden of ongoing reporting.

On July 24, 1989, the Commission proposed for comment rules, forms, and schedules to provide the foundation for a multijurisdictional disclosure system to facilitate cross-border securities offerings by certain Canadian issuers. ¹¹ Such offerings included rights offerings and exchange offers, as well as offerings of investment grade securities and equity securities by larger issuers. The Ontario Securities Commission (OSC) and the Commission des valeurs mobilieres du Quebec (CVMQ) concurrently issued for comment proposals concerning the establishment of a multijurisdictional disclosure system in Canada for certain U.S. issuers. ¹²

After reviewing the comments received on the Original Proposal, ¹³ which were generally supportive but suggested refinements, the Commission proposed for comment on October 22, 1990 a revised multijurisdictional disclosure system. ¹⁴ While many aspects of the system remained the same, the Reproposal reflected refinements to each of the originally proposed forms and broadened the Original Proposal by, inter alia, expanding the class of issuers eligible to make rights offerings under the system and expanding the system to cover business combinations. In connection with the Reproposal, the Commission also proposed for the first time in conjunction with the MJDS revised rules and forms to place Canadian foreign private issuers on an equal footing with all other foreign private issuers with respect to registration and reporting. Shortly after publication of the Reproposal, the Canadian Securities Administrators published for comment a revised, largely parallel, multijurisdictional disclosure system in Canada for certain U.S. issuers. ¹⁵

The Commission is adopting the MJDS with limited changes from the Reproposal. Canada is the logical first partner for the United States in such an initiative because of the significant presence of Canadian companies in the U.S. trading markets. More than 100 Canadian issuers are listed on the New York Stock Exchange or the American Stock Exchange or are quoted on the National Association of Securities Dealers Automated Quotation (NASDAQ) National Market System. Of the 463 foreign issuers filing periodic reports with the Commission under the Exchange Act, more than 240 are Canadian. ¹⁶ Canadian companies also are relatively frequent issuers in the U.S. capital markets. In 1989 and 1990 alone, Canadian private issuers made a total of 54 public offerings in the United States, offering approximately $11.9 billion of securities. ¹⁷ The Commissions development of the MJDS with Canada is a first step in meeting the needs of issuers making transnational securities offerings.

III.THE MULTIJURISDICTIONAL DISCLOSURE SYSTEM

A.Overview of the MJDS

To register securities for an offering under the MJDS, a Canadian issuer essentially will take the offering document it prepared under Canadian law and file it with the Commission along with a cover page, certain legends and various exhibits. The Commission finds that permitting certain Canadian issuers to register securities under the MJDS using their home jurisdiction disclosure documents instead of using disclosure documents prepared in accordance with the Securities Act specifications is in the public interest and fully adequate for the protection of U.S. investors.

The MJDS encompasses registration of equity securities and investment grade debt or preferred securities of large Canadian issuers. Registration under the MJDS also is available for specified exchange offers, business combinations and rights offers of a broader class of smaller Canadian issuers. The broader availability of the MJDS for those types of offerings reflects the interests of U.S. interests in not being excluded from transactions that will affect the value of their existing holdings. Where U.S. holders have less than 40 percent of the target shares in the case of an exchange offer and less than 40 percent of the shares of the successor registrant at the close of a business combination, the MJDS may be used to register the securities being offered.

For any type of MJDS offering, the Canadian issuer must have at least a three-year history of reporting with a Canadian securities regulatory authority. Except in the case of rights offerings and offerings of certain non-convertible investment grade securities, an issuer also must satisfy specified size tests of minimum market value and/or public float.

Issuers eligible to rely upon the MJDS include only Canadian foreign private issuers ¹⁸ and, for specified offerings, Canadian crown corporations. Foreign issuers that do not meet the definition of foreign private issuer are in essence U.S. issuers and therefore must use the same forms as U.S. issuers for purposes of registration and reporting under the Securities Act and Exchange Act. ¹⁹ Canadian crown corporations are those corporations all of whose common shares or comparable equity is owned directly or indirectly by the Government of Canada or a Province or Territory of Canada.

Two new rules under the Trust Indenture Act are also being adopted for use in connection with MJDS offerings. New Rule 10a-5 permits Canadian institutional trustees subject to supervision or examination by Canadian federal authorities to act as sole indenture trustees in debt offerings under the MJDS. That Rule gives effect to a provision of the Trust Indenture Reform Act of 1990 ²⁰ conditionally permitting the Commission to authorize sole trusteeships by foreign persons. New Rule 4d-9 provides an exemption from specified provisions of the Trust Indenture Act for indentures governing debt securities sold under the MJDS where the indentures are subject to similar substantive provisions through the regulatory schemes for trust indentures under the federal law of Canada or the law of Ontario.

The issuers home jurisdiction periodic reports are used under the MJDS to satisfy reporting requirements under the Exchange Act that arise solely by reason of registering securities offerings on the MJDS forms, or when the issuer of the securities meets certain tests of market value, public float and reporting history. Other than requirements relating to English translations, a consent to service of process and, in limited cases, a reconciliation of financial statements, the MJDS disclosure is based on incorporation of the registrants home jurisdiction documents in their entirety. In addition, a newly adopted exemption eliminates the Commissions reporting obligation that otherwise would arise by reason of Securities Act registration under the MJDS in connection with most rights offers, exchange offers and business combinations.

Financial statements included in MJDS disclosure documents may be audited in accordance with generally accepted auditng standards in Canada. ²¹ Except in rights offerings, ²² compliance with U.S. auditor independence requirements must commence with the audit report on the financial statements for the most recent fiscal year included in the first MJDS filing and continue for each report thereafter. For prior periods, compliance with Canadian independence standards is sufficient.

Under revisions being adopted to an exemptive provision under the Exchange Act, securities of Canadian foreign private issuers are exempt from the share ownership reporting requirements and short-swing profit recapture provisions of Section 16 of the Exchange Act. ²³ In addition, securities of Canadian foreign private issuers previously subject to U.S. proxy regulations are now exempt from the requirements of Exchange Act Sections 14(a), 14(b), 14(c) and 14(f) under such revised exemption.

The MJDS also extends to Williams Act regulations applicable to third-party and issuer exchange and cash tender offers made for the securities of Canadian issuers in compliance with Canadian tender offer regulations, if less than 40 percent of the target shares are held by U.S. holders. In addition, general exemptions under Exchange Act Rules 10b-6 ²⁴ and 10b-13 ²⁵ are provided under the MJDS to permit specified purchases of securities during qualifying tender and exchange offers. ²⁶

Review of a disclosure document submitted under the MJDS will be that customary in Canada. ²⁷ Thus, except in the unusual case where the Commission staff has reason to believe there is a problem with the filing or the offering, the MJDS registration statements generally will be given a no review status by the Commission. Further, the MJDS forms for registration under the Securities Act will be made effective automatically upon filing with the Commission except where no contemporaneous offering is being made in Canada and where preliminary materials are being filed. In the case of offerings not made contemporaneously in Canada, such registration statements will be made effective after the Canadian securities regulator has completed its review.

Issuers using the MJDS continue to be subject to provisions imposing civil or criminal liability for fraud in each jurisdiction where the securities are offered. Issuers are subject to the authority of each such jurisdiction to halt the offering in the public interest and for the protection of investors.

B.Securities Act Registration

1.Offerings by Substantial Issuers

The purpose of the substantial designation is to single out issuers whose size is such that there is a large market following for them and the marketplace can be expected to have set a price for their securities based on all publicly available information. ²⁸ The Commission has distinguished for this purpose between investment grade securities and other securities and has provided separate registration forms for each. Substantial issuers in the context of convertible investment grade securities ²⁹ are issuers that have a total market value for their equity shares ³⁰ of at least (CN) $180 million and for their public float ³¹ of at least (CN) $75 million. ³² (For non-convertible investment grade securities, issuers need not meet the substantial test. ³³) Substantial in the context of registration of all other securities includes those issuers with a market value for their equity shares of at least (CN) $360 million and a public float of (CN) $75 million. The market value of equity shares and public float tests may be measured as of any date within 60 days prior to the date of filing. ³⁴

a.Offerings of Any Securities by Substantial Issuers (Form F-10)

Securities offered for cash or in connection with exchange offers or business combinations may be registered on Form F-10 by substantial Canadian issuers. ³⁵ To be eligible to use Form F-10, the issuer must have been reporting with Canadian securities regulators for the 36 months immediately prior to filing and be in compliance with such regulators requirements at the time of filing. ³⁶ As with all other MJDS forms, the issuer of the securities must be a foreign private issuer ³⁷ and must be incorporated or organized under the laws of Canada or any Canadian province or territory. ³⁸

Form F-10 is available for the registration of debt securities or preferred stock of a Canadian organized, majority-owned subsidiary. Where a Canadian parent satisfies the three-year reporting history, the (CN) $360 million market value and the (CN) $75 million public float tests, and fully and unconditionally guarantees the securities, the subsidiary as well as the guarantor qualifies to use Form F-10. ³⁹ Such debt securities or preferred stock may be convertible or exchangeable, but only for the securities of the parent company.

If the filing is made prior to July 1, 1993, reconciliation to U.S. GAAP as specified in Item 18 of Commission Form 20-F is required for any financial statements included in Form F-10 pursuant to home jurisdiction requirements. ⁴⁰ Item 18 requires the full disclosure of information required by Regulation S-X and U.S. GAAP, including segment information and supplemental oil and gas data. Filings on Form F-10 made on or after July 1, 1993 will not be subject to any requirement to reconcile the financial statements to U.S. GAAP, absent future action by the Commission to the contrary.

b.Offerings of Investment Grade Debt and Preferred Stock by Substantial Issuers (Form F-9)

Registration on Form F-9 is permitted for offerings of investment grade debt securities or investment grade preferred stock, if such securities are either non-convertible or are convertible only after one year from the date of issuance. Form F-9 securities may only be convertible into another class of securities of the issuer or, in the case of guaranteed securities discussed below, the parent. The issuer must be either a foreign private issuer or a crown corporation, and must be of substantial size if the securities are convertible. A foreign private issuer (or, in the case of guaranteed securities, its parent) must have a 36-month reporting history with a Canadian securities regulatory authority and be in compliance with such reporting requirements at the time of filing Form F-9. A crown corporation need only have a 12-month Canadian reporting history to be eligible. ⁴¹

The investment grade determination has to be made by a nationally recognized statistical rating organization (NRSRO). ⁴² Under the Reproposal, securities would have been deemed investment grade if, at the time of effectiveness of the registration statement, at least one NRSRO had rated the security in one of its three highest rating categories that signifies investment grade. The Commission indicated in the Reproposal, however, that to the extent the fourth highest rating category is recognized in the future by Canadian regulatory authorities as signifying investment grade under the MJDS, the Commission would give parallel recognition. In light of such subsequent recognition, ⁴³ Form F-9 as adopted refers to registration of securities with the fourth highest rating.

In a parallel fashion to Form F-10, Form F-9 is available for certain issuers of guaranteed securities. A majority-owned Canadian subsidiary issuing investment grade debt or preferred stock does not have to satisfy the 36-month reporting requirement or the market value or public float tests if the securities are fully and unconditionally guaranteed by a parent that is eligible to use Form F-9. Such securities may be convertible or exchangeable, but only after a year from the date of issuance and only for securities of the parent company. ⁴⁴

2. Exchange Offers and Business Combinations (Forms F-8 and F-80)

a. Exchange Offer Registration

Form F-8 is available for Securities Act registration in connection with exchange offers ⁴⁵ for a Canadian issuers securities in which the securities being registered are all or a portion of the consideration offered. ⁴⁶ Except for issuer exchange offers, which may be registered without regard to the issuers public float, Form F-8 registrants must have a public float for their equity shares with a market value that equals or exceeds (CN) $75 million. ⁴⁷

Registrants under Form F-8 also must have their securities listed on The Toronto Stock Exchange, The Montreal Exchange or the Senior Board of The Vancouver Stock Exchange for the most recent 12 months prior to filing, and have been reporting with a Canadian securities regulator for the most recent 36 months. The issuer also must be in compliance with such listing and reporting requirements at the time of filing. The combined reporting and listing requirements has replaced the 36-month listing history requirement under the Reproposal in order to provide greater flexibility in use of Form F-8 and in response to comments by Canadian regulators.

The target of the bid, like the registrant, must be a foreign private issuer incorporated or organized under the laws of Canada or any Canadian province or territory. To prevent discrimination among holders of the class of securities that is the subject of the offer, the bidder is required to offer its securities to U.S. holders upon terms and conditions not less favorable than those offered to any other holder of the same class of subject securities.

Under the Reproposal, use of Form F-8 would have been limited to situations in which less than 20 percent of the securities of the target class was held of record by U.S. residents (other than U.S. affiliates) as of the end of such issuers last quarter. Comment was solicited by the Commission, however, with regard to whether the 20 percent ceiling for U.S. ownership should be increased, and a level of 40 percent was suggested. Commenters largely favored a 40 percent test. As adopted, the MJDS imposes a 40 percent ceiling on ownership of the class of subject securities by U.S. holders. ⁴⁸ The state securities regulators have expressed a willingness to recognize an increase from 20 percent to 25 percent for purposes of the Uniform Securities Act. Form F-8 has therefore been revised to reflect a 25 percent ceiling on U.S. ownership. The Commission has provided an alternative MJDS registration form (Form F-80) for exchange offers equalling or exceeding the 25 percent ceiling, so that states choosing to review such transactions may do so without reviewing every Form F-8. Form F-80 is identical to Form F-8 except for the use of a 40 percent U.S. ownership ceiling instead of a 25 percent ceiling. ⁴⁹

In calculating the U.S. ownership threshold, U.S. affiliates are not excluded as they were under the Reproposal. In measuring the percentage of the class of securities held in the United States, securities convertible into or exchangeable for securities of such class are not included.

Also under the Reproposal, a safe harbor would have afforded third-party bidders commencing an unsolicited exchange offer the benefit of a conclusive presumption, under certain circumstances, that U.S. ownership of the subject class of securities did not equal or exceed the proscribed level. ⁵⁰ The Commission is retaining that safe harbor substantially as proposed, but extending it to all third-party offers, whether solicited or unsolicited. In addition, because of similar difficulties third parties would encounter, the safe harbor is being extended to the determination of whether the target company is a foreign private issuer. Thus, third-party bidders commencing an exchange offer have the benefit of a conclusive presumption that the target is a foreign private issuer and that U.S. holders hold less than 25 percent (Form F-8) or 40 percent (Form F-80) of the securities, unless: (1) the aggregate trading volume of that class on national securities exchanges in the United States and NASDAQ exceeded the aggregate trading volume of that class on securities exchanges in Canada or the Canadian Dealing Network, Inc. (CDN) over the 12 calendar month period prior to commencement of the offer (or, if commenced in response to a prior bid, the 12 calendar month period prior to the commencement of the initial offer); ⁵¹ (2) the most recent annual report or annual information form filed or submitted by the issuer with securities regulators in Ontario, Quebec, British Columbia or Alberta (or, if the issuer of the securities is not a reporting issuer in any of the above provinces, with any other Canadian securities regulator) or with the Commission indicates that U.S. holders hold the threshold percentage of more of the subject class of securities; or (3) the offeror has actual knowledge that the level of U.S. ownership as of the operative date equals or exceeds the threshold percentage.

The calculation of the trading volume for purposes of the presumption is based on volume figures published by the exchange(s) on which the security is listed and the published NASDAQ and CDN volume figures. Also, unlike the Reproposal, a third-party bidder availing itself of the safe harbor is not obligated to undertake the burden of searching the public filings of securities authorities in each of the U.S. states, and the Canadian provinces and territories. In addition, a third-party bidder is not required to certify that it has made a reasonable investigation and as a result it believes that less than the threshold amount of the targets securities is held by U.S. holders.

A Canadian offeror making an exchange offer pursuant to the MJDS will file the home country disclosure documents under cover of Form F-8 or F-80 with the Commission. The offer and takeover or issuer bid circular will be distributed by mail in accordance with Canadian law ⁵² to shareholders in both countries. In the United States an exchange offer cannot commence until a registration statement has become effective. ⁵³ An exchange offer commences under Canadian law, however, immediately upon the mailing to target shareholders of the takeover or issuer bid circular containing the required prospectus disclosure. ⁵⁴ The Commission has provided, therefore, for immediate effectiveness of filings on Forms F-8 and F-80.

b. Business Combination Registration

Form F-8 and Form F-80 also allow registration in connection with business combinations. When securities are part of the consideration in a business combination, generally an exemption is granted from the prospectus requirements under Canadian law in light of the disclosure provided in the information circular required by Canadian proxy solicitation rules. ⁵⁵ While, at the time of the Reproposal, Canadian securities regulators had not set forth specific disclosure requirements for such circular, ⁵⁶ Canadian securities regulators subsequently have taken action to require prospectus-level disclosure in information circulars used for such business combinations. ⁵⁷ Thus, the Commission is allowing use of Form F-8 or Form F-80 (or Form F-10 where the requirements are satisfied) to satisfy Securities Act registration requirements in such cases. ⁵⁸ All information circulars and other disclosure documents used by companies participating in business combinations to solicit securityholders votes in connection therewith must be filed under cover of Form F-8 or F-80 and delivered to securityholders in the United States.

To be eligible for use of Form F-8 or F-80 in connection with business combinations, each company participating in the business combination must be incorporated or organized in a Canadian jurisdiction and be a foreign private issuer. Each company participating in the business combination, other than the successor registrant, is required to have had a class of its securities listed on The Montreal Exchange, The Toronto Stock Exchange or the Senior Board of The Vancouver Stock Exchange for the 12 months immediately prior to filing the Form, and have been reporting with a Canadian securities regulatory authority for the 36 months immediately prior to filing of the Form. Such companies also must be in compliance with such listing and reporting requirements at the time of filing Form F-8 or F-80. Each participating company, other than the successor registrant, also is required to have a public float of at least (CN) $75 million.

In order not to preclude use of the MJDS when a smaller participant is participating in a business combination, Forms F-8 and F-80 do not impose a public float or reporting or listing requirement on any participating company if such requirements are met by other participating companies whose assets and gross revenues from continuing operations, respectively, would contribute at least 80 percent of the successor registrants total assets and gross revenues from continuing operations, as measured based on pro forma combination of the participating companies most recently completed fiscal years.

As in the case of exchange offers on Form F-8 or F-80, the securities to be registered in connection with a business combination must be offered to U.S. holders upon terms and conditions not less favorable than those offered to any other holder of the same class of securities of the participating company.

Form F-8 or F-80 also may be used for second-step business combinations occurring within twelve months after an exchange offer or cash tender offer. In that case, if the securities offered in the exchange offer or cash tender offer were registered or could have been registered on Form F-8, F-9, F-10 or F-80, or if Schedule 13E-4F or 14D-1F were filed or could have been filed in connection therewith, the issuer will be deemed to satisfy the public float test of Form F-8 or F-80 for the business combination if such test would have been satisfied by such company immediately prior to commencement of the exchange offer or cash tender offer. ⁵⁹ Otherwise, the reduction in such participating companys public float resulting from the prior offer might prevent the satisfaction of the public float test for purposes of the second-step business combination.

Eligibility for Form F-8 or F-80 in terms of U.S. shareholdings is assessed on the basis of securities of the successor registrant that will be distributed to participants. Form F-8 is available where less than 25 percent of the class of securities of the successor registrant would be held by U.S. holders, as if measured upon completion of the business combination. Form F-80 is available where less than 40 percent of such class of securities would be held by U.S. holders upon completion of the business combination. As is the case with exchange offers, U.S. affiliates are not excluded from the calculation of U.S. shareholdings as they were under the Reproposal. The calculation of U.S. holders is made as of a participants last fiscal quarter or, if such quarter ended within the last 60 days, as of the participants preceding quarter.

Registrants participating in business combinations who are ineligible to use Form F-8 or F-80 because, for example, the threshold for securities held by U.S. holders is equalled or exceeded, may register on Form F-10 if participants accounting for at least 80 percent of total assets and gross revenues from continuing operations of the successor registrant meet the Form F-10 eligibility requirements. Form F-10 thus accommodates business combinations as well as exchange offers. ⁶⁰

3.Rights Offers (Form F-7)

Form F-7 may be used by Canadian issuers making rights offerings in the United States. ⁶¹ To be eligible to use Form F-7, the issuer has to have a class of securities listed on The Toronto Stock Exchange, The Montreal Exchange or the Senior Board of The Vancouver Stock Exchange for the 12 months immediately preceding use of the Form, and be reporting with a Canadian securities regulator for the 36 months immediately preceding use of the Form. The issuer also must be in compliance with requirements arising from such listing and reporting at the time of filing Form F-7. Unlike the Reproposal, requirements that the exercise period of the rights not exceed 90 days and the rights be exercisable immediately upon issuance are not included in Form F-7 as adopted. Also unlike the Reproposal, the 25 percent limitation on the increase in the number of the outstanding securities of the class to be issued upon exercise of the rights has been deleted from the Form F-7 eligibility requirements. Upon reconsideration, the limitation was judged unnecessary for, and in some cases inconsistent with, U.S. investors interests.

To preclude its use by issuers ineligible to make an MJDS offering to new investors, Form F-7 provides that the rights issued may not be transferable except outside the United States in accordance with Regulation S under the Securities Act. ⁶² The securities purchased by existing securityholders upon exercise of rights, however, are transferable in the United States.

4.Disclosure Supplementing Home Jurisdiction Requirements

In light of the absence of requirements for such disclosure under Canadian law, information regarding indemnification provisions relating to directors, officers or controlling persons of the registrant is required to be disclosed in Forms F-8, F-80, F-9 and F-10. ⁶³ A statement regarding the Commissions opinion that indemnification against Securities Act liabilities is against public policy and is therefore unenforceable also is required.

5.Application of Securities Act Rules

The Securities Act rules in Regulation C mandating standards for the preparation and form of prospectuses are inapplicable under the MJDS, unless otherwise specified in the MJDS forms. ⁶⁴ Other Securities Act rules regarding the offer and sale of securities in the United States generally do apply unless the MJDS form specifies otherwise or the rule, by its terms, is inapplicable. For example, U.S. requirements for prospectus delivery ⁶⁵ apply to MJDS offerings in the United States, as do safe harbor provisions relating to advertisements and other notices regarding MJDS offerings. ⁶⁶ In addition, publication of recommendations, opinions or other information with respect to a MJDS registrant or its securities is permitted to the extent provided by Securities Act safe harbor rules. ⁶⁷ Where appropriate, Securities Act rules have been amended to apply to MJDS forms. ⁶⁸

C.Exchange Act Registration and Reporting

Canadian issuers that make a registered offering of securities in the United States or have a certain number of shareholders of record resident in the United States and have a threshold amount of assets are subject to registration and reporting requirements under the Exchange Act. ⁶⁹ Similarly, Canadian issuers listing securities on a national securities exchange or having them quoted on NASDAQ are subject to such Exchange Act requirements. ⁷⁰ A chart of such reporting obligations and the forms available to Canadians to satisfy them is included as Appendix C to this Release.

1.Section 15(d) Obligations

Absent an exemption, Section 15(d) of the Exchange Act ⁷¹ requires each issuer that has filed a Securities Act registration statement that has become effective to file periodic reports thereafter. ⁷² While under the Reproposal registration on any of the MJDS Securities Act forms would have resulted in subsequent Exchange Act reporting, the MJDS as adopted provides that securities registered on MJDS Form F-7, F-8 or F-80 are exempt from the Section 15(d) requirement to file subsequent reports with the Commission, provided the issuer is furnishing its home country disclosure documents under the Rule 12g3-2(b) exemption from the Commissions reporting obligations under Section 12(g). ⁷³

Any Section 15(d) reporting obligation resulting solely from registration on MJDS Form F-9 or F-10 (or Forms F-8, F-80 or F-7 where the issuer does not satisfy the Rule 12g3-2(b) condition) may be satisfied by the Canadian issuer filing its home jurisdiction periodic disclosure documents under cover of Commission Forms 40-F and 6-K. ⁷⁴ Those documents will include Annual Information Forms, audited annual and unaudited interim financial statements and material change reports. Issuers reporting as a result of using Form F-10 (unless they could have registered the securities on Form F-9) also must include a reconciliation of their annual financial statements to U.S. GAAP as required by Item 17 of Form 20-F if the Form 40-F is filed prior to July 1, 1993. Forms filed on such date or thereafter will not be subject to such reconciliation requirement, absent future Commission action to the contrary. Further, Canadian issuers that are eligible to use Form F-10 (but not Form F-9), but have registered or choose to register securities on the Commissions non-MJDS Securities Act forms, also may satisfy their reporting obligations by filing their home jurisdiction periodic disclosure documents, together with an Item 17 reconciliation if the filing is made prior to July 1, 1993. Similarly, a Canadian issuer eligible to use Form F-9 that has registered or chooses to register Form F-9-eligible securities on non-MJDS forms may file its home jurisdiction periodic disclosure documents on Form 40-F, in which case no reconciliation is required.

All other Canadian issuers must use either Form 20-F and Form 6-K reports or, at their option, the 10-K, 10-Q and 8-K reports to satisfy their Section 15(d) reporting obligations. ⁷⁵

2.Stock Exchange and NASDAQ-Related Obligations

Section 13(a) of the Exchange Act requires each issuer that has registered securities under that Act to file periodic reports. ⁷⁶ The Exchange Act requires registration of any class of securities, whether debt or equity, that is listed on a national securities exchange. ⁷⁷ Exchange Act registration is also required for securities quoted on NASDAQ. ⁷⁸ Issuers eligible to use MJDS Form F-10, and issuers eligible to use MJDS Form F-9 that are having Form F-9-eligible securities so listed or quoted, may comply with such reporting obligations by filing their home jurisdiction disclosure documents. ⁷⁹

3.Forms 40-F and 6-K

Forms 40-F and 6-K will be available for eligible Canadian issuers that are registering securities under the Exchange Act or satisfying their Exchange Act reporting obligations by filing home jurisdiction disclosure. Form 40-F is used as a wraparound for the filing of home jurisdiction information material to an investment decision that the issuer has made public, filed with a stock exchange or distributed to securityholders. ⁸⁰ For an issuer registering securities under the Exchange Act, Form 40-F specifically requires the issuer to file that portion of its home jurisdiction documents containing a description of the securities being registered. ⁸¹

Documents filed under Form 40-F to satisfy reporting obligations must be filed with the Commission the same day they are filed with a Canadian securities regulatory authority. Documents required by Form 6-K must be furnished to the Commission promptly after they are made public, filed or distributed as noted above. Disclosure documents filed with the Commission on Form 40-F or 6-K are subject to antifraud liability, but only the documents filed on Form 40-F are subject to Section 18 liability.

Documents filed under cover of Form 40-F must be in English. If documents in a foreign language are furnished under Form 6-K, English versions or summaries need only be provided if such documents are distributed directly to securityholders of a class to which a reporting obligation under the Exchange Act relates or if such documents are in the form of a press release.

Regulations 12B, 13A and 15D do not apply to registrants using Form 40-F. ⁸² Unless specified therein, all other Exchange Act rules apply to Form 40-F. Exchange Act rules regarding fees, amendments and effectiveness of registration statements apply.

D.Tender Offer Regulation Under the MJDS

The Commission also is incorporating into the MJDS certain provisions for compliance with the U.S. regulatory scheme relating to tender offers in connection with cash and exchange offers for Canadian companies. Pursuant to amendments being adopted to the Commissions tender offer rules, regulations and schedules, third-party and issuer tender offer filings in connection with offers made in both jurisdictions for a class of securities of a Canadian issuer may proceed in the United States in accordance with all relevant Canadian federal, provincial and territorial rules and regulations. Such offers must be extended to all holders of the class of securities in the United States and Canada upon terms and conditions not less favorable than those offered to any other holder of the same class of securities, and the transaction itself must be covered by and not exempt from substantive provisions of Canadian law governing the terms and conditions of the offer. In addition, U.S. holders must hold less than 40 percent of the subject securities.

Commenters addressing the tender offer issues in the Proposals focused primarily on the appropriateness of the proposed 20 percent ceiling to be imposed on U.S. record ownership, the method for calculating this percentage of ownership, the safe harbor for third-party bidders, and the effect of discretionary exemptive orders granted by Canadian securities regulators. Upon consideration of the comments submitted, the following modifications are being adopted.

The ceiling for U.S. ownership has been raised to 40 percent with respect to compliance with the Williams Act and Commission rules thereunder in connection with cash and exchange offers, which increase was largely endorsed by commenters. As noted, the ceiling on U.S. ownership for registering an exchange offer under the Securities Act on Form F-8 is 25 percent and on Form F-80 is 40 percent. As with Forms F-8 and F-80, the percentage limitation set forth in the MJDS tender offer rules and schedules ⁸³ is calculated by reference to securities held by persons with U.S. addresses in the records of the issuer and other specified records. ⁸⁴ Like those Forms, U.S. affiliates are not excluded from the calculation of the U.S. ownership ceiling as they would have been under the Reproposal.

The operative date for calculating U.S. ownership for the purpose of determining eligibility for MJDS is the end of the subject companys last quarter or, if such quarter terminated within 60 days of the filing date, as of the end of the subject companys preceding quarter. ⁸⁵ The rules, as adopted, provide that the date of the initial bid, in the case of competing bids, is used for determining MJDS eligibility for all subsequent competing bids. Subsequent competing bids are able to look back to the initial commencement date, so long as the initial offer was eligible to use MJDS, regardless of whether the initial offer took advantage of MJDS. In addition, as in Forms F-8 and F-80, third-party bidders whether solicited or unsolicited are able to rely upon a conclusive presumption that less than the threshold percentage of the class of subject securities is held by U.S. holders and that the target is a foreign private issuer, absent published trading volume data, disclosure in public filings or actual knowledge to the contrary. ⁸⁶

An important condition to use of the MJDS to effect cross-border tender and exchange offers is that the offer be subject to a Canadian regulatory scheme governing the conduct of tender offers. Accordingly, transactions that are not subject to Canadian tender offer regulation, such as offers for non-convertible debt securities and non-convertible, non-voting preferred stock, would not be eligible for the MJDS. Offers exempted from Canadian tender offer regulation likewise would not qualify. By way of illustration, the Commission noted in the Original Proposal that an exempt takeover or issuer bid conducted on The Toronto Stock Exchange or The Montreal Exchange would be governed by the Williams Act and the rules thereunder, since such a bid would not be regulated by any Canadian federal, provincial or territorial regulatory scheme governing tender offers. ⁸⁷ The MJDS is available regardless of whether the offering person is eligible for an exemption, so long as it does not take advantage of such eligibility. Therefore, if a bidder chose to make an offer subject to Canadian take-over bid regulation, the transaction would not be ineligible for the MJDS merely because a blanket exemption was otherwise available to the bidder. Furthermore, even if the bidder takes advantage of a blanket exemption in one or more Canadian jurisdictions, the transaction would not be ineligible for the MJDS so long as the offer remains fully subject to the laws or regulations governing takeover bids of Canada or any one of its provinces or territories.

In addition, a limited grant of exemptive relief to a Canadian bidder or issuer from applicable Canadian take-over bid rules, rather than a blanket exemption, will not necessarily preclude a bidder or issuer from proceeding with a tender or exchange offer in the United States under the MJDS. The MJDS will not be available if the Canadian regulators granted relief from Canadian regulatory provisions mandating tender offer protections otherwise called for by the Williams Act and Commission rules such that the transaction would no longer be subject to such protections pursuant to the laws or regulations of Canada or any one of its provinces or territories. Persons seeking to use the MJDS despite the entry of such an exemptive order implicating Williams Act requirements, could seek relief from the Commission which could allow the offer to proceed under the MJDS either conditioned upon compliance with the relevant Williams Act provisions with respect to U.S. holders or unconditionally. All requests for entry of such orders would be resolved on an expedited basis. Exemptive relief by Canadian authorities from Canadian requirements relating to such matters as distribution of offering materials in French, post-bid and pre-bid integration of purchases into the offer, valuation and minority voting requirements in insider bids, and collateral benefits normally would not result in the loss of MJDS eligibility, and therefore normally would not require relief from the Commission. Nevertheless, the Commission should be provided with a copy of all requests for relief from Canadian authorities at the time the request is made and any orders granting such relief should be filed as an exhibit to the Schedule 13E-4F or 14D-1F. If the Commissions staff believes that a particular form of relief would implicate Williams Act protections, and thus in the staffs view would cause the loss of MJDS eligibility, the requesting party and the Canadian regulators would be advised by the staff of its view that an application for relief to the Commission would be necessary before the transaction could proceed under the MJDS. The Commission is adopting amendments to its rules to provide for delegation of this authority to the Division of Corporation Finance and the Division of Market Regulation. ⁸⁸

If the request to proceed under the MJDS is not granted, the offer may nevertheless proceed using the MJDS, with respect to the use of Canadian disclosure documents, although the U.S. portion of the offer will have to comply with all or certain of the provisions of the Williams Act, as specified by the order, even though exempted from a comparable provision in Canada.

E.Exchange Act Provisions Affecting the Activities of Participants in Tender and Exchange Offers

Rule 10b-6 generally prohibits a person participating in a securities distribution from, directly or indirectly, bidding for or purchasing, or inducing others to purchase, the securities in distribution or any security of the same class and series or any right to purchase such security (related securities), until the participants role in the distribution has terminated. ⁸⁹ Rule 10b-13 prohibits a person who is making a cash tender offer or exchange offer for any equity security from, directly or indirectly, purchasing or making any arrangement to purchase such security (or any other security which is immediately convertible into or exchangeable for such security) otherwise than pursuant to the tender offer or exchange offer, from the time of announcement of the offer until its expiration, including any extensions thereof. The rule is designed to protect shareholders in the tender offer from the harmful effects of purchases or arrangements made outside, and on terms or conditions different from, the tender offer, and to protect the integrity of the tender offer process by proscribing side deals that could render the tender offer a sham. ⁹⁰

Canadian provisions permit participants in transactions contemplated by Forms F-8, F-80, F-9 and F-10 and Schedules 14D-1F and 13E-4F to engage in certain activities that are prohibited by Rules 10b-6 and 10b-13. For example, Canadian provisions permit, in limited circumstances, purchases by an offeror during a third-party bid, or by an issuer during an issuer bid. ⁹¹ Such purchases are permitted from the third business day following the date of the bid until its termination. Purchases are conditioned upon limiting the amount of securities acquired to five percent of the outstanding securities as of the date of the bid, disclosing the intention to make such purchases in the third-party or issuer bid circular, and issuing and filing a press release with the relevant exchange or regulatory commission at the close of each day on which securities have been purchased. ⁹²

In connection with the MJDS, the Commission is granting exemptions with respect to Rules 10b-6 and 10b-13. ⁹³ The exemptions apply solely to tender and exchange offers made in reliance on Rule 13e-4(g) or 14d-1(b). The exemptions permit: (1) with respect to cash tender offers, purchases of the securities that are the subject of the offer and any other security that is immediately convertible into or exchangeable for such security (target securities); and (2) with respect to exchange offers, purchases of target securities and bids for and purchases of the securities offered by the bidder or issuer (offered securities), and any security of the same class and series or any right to purchase any such offered securities (collectively, subject securities). ⁹⁴ The exemptions are available to offerors that: (1) disclose in the Form F-8, F-80, F-9 or F-10, or in Schedules 13E-4F and 14D-1F, or, in the case of a cash tender offer where no filing is required to be made in the United States, in the offering materials disseminated to U.S. securityholders, the possibility of, or the intent to make, purchases of subject securities as permitted by applicable Canadian regulations; and (2) disclose in the United States information regarding purchases of subject securities on the same basis as it is required to be disclosed or otherwise is disclosed pursuant to Canadian statutory and regulatory requirements. ⁹⁵

The Commissions exemptions with respect to Rules 10b-6 and 10b-13 represent an appropriate accommodation that recognizes that Canadian procedures applicable to tender and exchange offers afford a large measure of the protections provided by Rules 10b-6 and 10b-13. ⁹⁶

F.Mechanics of the MJDS

1.Offerings of Securities

An issuer using the MJDS will prepare a disclosure document according to Canadian requirements and use that document for securities offerings in the United States, subject to minimal additions set forth in the MJDS forms. ⁹⁷ Of course, if no Canadian takeover bid circular or issuer bid circular (in the case of an exchange offer) or information circular (in the case of a business combination) or prospectus (in all other cases) is prepared with respect to an offering because an exemption from such requirements is being relied upon by the issuer, the offering is not eligible to be made using MJDS forms regardless of whether the eligibility tests are satisfied. ⁹⁸ Where an offering on Form F-9 or F-10 is being made only in the United States, however, the MJDS is available so long as the home jurisdiction disclosure document is prepared and filed with the Canadian securities regulator in the review jurisdiction.

Review of the disclosure document will be undertaken by Canadian securities authorities and generally will be that customary in Canada. Thus, except in the unusual case where the Commissions staff has reason to believe there is a problem with the filing or the offering, the documents generally will be given a no review status by the Commission. For the most part, since the MJDS Securities Act forms become effective upon filing, any Commission review would be undertaken after effectiveness.

The MJDS forms distinguish between the disclosure document required to be given to each investor and the documents to be filed with the Commission. Participating Canadian issuers will provide investors in the United States generally with the same information delivered to investors in Canada. A prospectus used in the United States, however, need not contain any disclosure applicable solely to Canadian offerees or purchasers that is not material to U.S. offerees or purchasers. All the forms and schedules also expressly require that the issuer add to the prospectus or circular legends notifying investors that the investment may have tax consequences in the issuers jurisdiction, that investors may have to pursue remedies for any securities law violation against persons and assets located in the issuers jurisdiction, and that any financial statements are prepared in accordance with Canadian accounting standards. Information incorporated by reference into the Canadian registration statement or prospectus that is not required to be delivered to securityholders in the issuers home jurisdiction is not required to be included in the MJDS prospectus, but must be filed with the Commission as an exhibit to the applicable form. Other documents required by home jurisdiction law to be made publicly available in connection with the transaction, or required to be filed with the Canadian securities regulator concurrently with the Canadian prospectus, also must be filed with the Commission as exhibits to the registration statement or schedule. The rules require the issuer to provide such information to the investor upon request. Such information also will be available in the public files of the Commission. Documents previously filed with the Commission or furnished by the issuer to the Commission pursuant to the Rule 12g3-2(b) exemption may be incorporated by reference and need not be filed again. ⁹⁹ Experts consents also must be filed with the Commission as a part of the MJDS registration statement and are required to indicate clearly that the consent to use the experts statements and consents extends to all the documents being filed with the Commission which attribute a report or opinion to the expert. ¹⁰⁰

2.Incorporation by Reference

Information filed under cover of Form 40-F or furnished on Form 6-K in connection with the MJDS may be incorporated by reference into certain Securities Act registration statements. Forms F-2, F-3, F-4 and S-8 allow such incorporation by reference on the same basis that Form 20-F information may be so incorporated, provided the registrant is eligible to use Form F-10 or, if the securities being registered on Form F-2, F-3, F-4 or S-8 are Form F-9-eligible securities, the registrant is eligible to use Form F-9. In addition, Forms F-2, F-3 and F-4 allow incorporation of Form 10-K, 10-Q and 8-K information by Canadian issuers who have been reporting under such forms. To maintain the integrity of the issuer distinctions made in the MJDS registration forms, incorporation by reference of Form 40-F information is limited to issuers eligible to use Form F-10, or Form F-9 (with regard to Form F-9-eligible securities).

3.Form F-X

The Securities Act registration forms (other than Form F-7) and Williams Act schedules (if filed by non-U.S. persons) must be accompanied upon filing by a Form F-X, which includes a consent to service of process and appointment of a U.S. person as agent for process, and a consent to service of an administrative subpoena and an undertaking to assist the Commission in responding to inquiries made by the Commission staff. In addition, Form F-X is required to be filed by any non-U.S. person acting as trustee with respect to securities registered on Form F-7, F-8, F-9, F-10 or F-80. ¹⁰¹ A Canadian issuer registering securities on Form 40-F must file a Form F-X with its Form 40-F. Also, issuers that have not filed a Form F-X with the Commission previously in connection with securities to which a reporting obligation relates, are required to file one at the time they file periodic reports on Form 40-F.

Form F-X has been revised from the version under the Reproposal to include a reference to a specific period during which a successor agent for service of process must be appointed if the agent resigns, is dismissed or is unable to continue serving as such. In the case of issuers filing Form F-X in connection with Form F-9, F-10 or 40-F, or Schedules 13E-4F, 14D-1F or 14D-9F such requirement extends for six years following the date the issuer of the securities to which such Form or Schedules relates ceases filing reports under the Exchange Act. Because issuers using Form F-8 or F-80 will not necessarily be reporting under the Exchange Act, the obligation to appoint successor agents is limited to a period of six years following the effective date of the latest amendment to such Form F-8 or F-80. ¹⁰² For trustees filing Form F-X, the obligation continues so long as any of the securities subject to the indenture remain outstanding. Each form and schedule being adopted contains a requirement that the Commission be advised promptly by amendment to Form F-X of any change to the name or address of an agent.

4. Time of Filing Securities Act Forms

Although the MJDS Securities Act registration forms need not be filed with the Commission on the same day they are filed with the Canadian securities regulators, offers may not be made in the United States until such forms are filed. Moreover, sales may not be made in the United States until such forms have been declared effective. ¹⁰³ The Commission understands that in certain circumstances Canadian law allows underwriters to solicit expressions of interest from potential investors within two business days prior to filing a preliminary prospectus with Canadian securities regulators. Such bought deals could continue to be conducted in Canada in connection with the MJDS so long as no solicitations of interest are made in the United States prior to the filing of the applicable Securities Act registration statement with the Commission.

5. Effective Date

Under the Reproposal, the effective date for registration of securities on Forms F-7 and F-8 (and for securities offered in an exchange offer or business combination on Form F-9 or F-10) would have been the date of written or oral notification of the Commission by the registrant or the applicable Canadian securities regulators that the securities legally may be sold in Ontario and Quebec (or, if the securities are being offered in only one of such provinces, that such securities legally may be sold in Ontario or Quebec). Forms F-9 and F-10 for offerings not in connection with exchange offers or business combinations would have become effective upon written or oral notification of the Commission by the registrant or the applicable Canadian securities regulator that the securities legally may be sold in the designated principal jurisdiction.

Under the MJDS as adopted, Forms F-7, F-8 and F-80 (and any amendments thereto) will become effective upon filing. ¹⁰⁴ Forms F-9 and F-10 (and any amendments thereto) also will become effective upon filing, if they relate to offerings of securities being made contemporaneously in Canada and the United States, and they do not include a designation on the cover page that they are preliminary materials. ¹⁰⁵ In the case of a U.S.-only offering on Form F-9 or Form F-10, the registration statement (and any amendments thereto) will be made effective on the date specified by the registrant, if such date is more than seven days after the date filed with the Commission. The seven-day period will provide adequate time for Canadian authorities reviewing such documents to advise the Commission of any regulatory concerns and will minimize the potential for the MJDS to encourage Canadian issuers to forego registration in Canada. Such seven-day period need not elapse prior to effectiveness with the Commission, however, if the Canadian securities regulator in the review jurisdiction issues a receipt or notification of clearance with respect to the registration statement (or amendment) prior thereto. In that case, the effective date will be as soon as practicable after written notification of the Commission that such receipt or clearance was issued. ¹⁰⁶ Either the issuer or the applicable Canadian securities regulator may make such written notification.

6. Shelf Offerings and Post-Effective Pricing Procedures

Since the date of the Reproposal, Canadian regulatory authorities have adopted rules for shelf prospectus offerings and for pricing of offerings after the final prospectus is receipted. ¹⁰⁷ Canadian MJDS issuers may rely only upon such home jurisdiction shelf prospectus offering and pricing procedures in connection with MJDS offerings. MJDS registration statements used in connection with such pricing procedures therefore will become effective with the Commission prior to pricing to the same extent they do in Canada. Supplements to the home jurisdiction disclosure documents in connection therewith will be filed with the Commission within one business day after they are filed with the relevant Canadian jurisdiction, but will not be deemed amendments to the Commission registration statement. Similarly, under the Canadian MJDS for U.S. issuers, the Commissions shelf and pricing procedures will apply. ¹⁰⁸ In connection therewith, U.S. issuers must file a supplement with the Commission whenever a tranche is not being sold in the United States under the Canadian MJDS. ¹⁰⁹

G. Exclusion of Investment Companies

The MJDS forms are not available to Canadian registrants that are investment companies, as defined in Section 3 of the Investment Company Act of 1940, if they are registered or required to be registered under the Investment Company Act. In the case of exchange offers, the issuer of the subject securities also may not fall within that category. Canadian issuers within the definition of investment company but exempted from registration either in reliance on an individual exemptive order or on an exemptive rule may take advantage of the MJDS. ¹¹⁰

The Commission has published for comment amendments to Rule 6c-9 under the Investment Company Act. ¹¹¹ Rule 6c-9 currently provides an exemption from the registration provisions of that Act for foreign banks offering their debt securities and non-voting preferred stock within the United States, either directly or through finance subsidiaries. The proposed amendments would expand the exemption to foreign banks offering equity securities and foreign insurance companies and finance subsidiaries of foreign banks and insurance companies offering their securities. Canadian trust companies and loan companies would be specifically included within the definition of foreign bank. The comment period relating to such proposal has expired and the Commission is considering what further action may be appropriate.

H. Trust Indenture Act

The Proposals included rules and forms designed to provide exemptions under Section 304(d) of the Trust Indenture Act ¹¹² from the required appointment of a U.S. trustee under a qualified indenture. ¹¹³ Proposed rules and forms would have allowed a Canadian institutional trustee to act as sole trustee under a qualified indenture if the securities under the indenture were eligible for registration on Form F-7, F-8, F-9 or F-10, and if the indenture provided for a Canadian institutional trustee authorized by law to exercise trust powers and subject to supervision or examination by government authority. ¹¹⁴ The Trust Indenture Reform Act of 1990 (the Reform Act), which has been enacted by Congress, eliminates the need for such proposed rules and forms under the Trust Indenture Act.

In accordance with the expanded authority granted to the Commission by the Reform Act amendments to the Trust Indenture Act, the Commission recently proposed for comment two rules to facilitate multijurisdictional and cross-border offerings of debt securities by Canadian issuers. ¹¹⁵ As proposed, Rule 10a-5 under Section 310(a)(1) ¹¹⁶ of the Trust Indenture Act would have permitted persons authorized to exercise corporate trust powers and subject to federal supervision or examination under the Trust Companies Act (Canada) ¹¹⁷ or the Canada Deposit Insurance Corporation Act ¹¹⁸ to act as sole indenture trustee for offerings under the MJDS. As proposed, Rule 4d-9 under Section 304(d) ¹¹⁹ of the Trust Indenture Act would have provided an exemption for trust indentures subject to the Canada Business Corporations Act ¹²⁰ or the Business Corporations Act, 1982 (Ontario) ¹²¹ from the operation of paragraphs (a)(3) and (a)(4) of Section 310, ¹²² Sections 310(b) through 316(a), ¹²³ and Sections 316(c) through 318(a) ¹²⁴ of the Trust Indenture Act for offerings of debt securities made under the MJDS.

The Commission is adopting Rule 10a-5 as proposed with one modification. Although British Columbia authorities have advised that legislative action is contemplated that would enable United States trustees to act as sole indenture trustees for offerings made in British Columbia, British Columbia law ¹²⁵ presently would not permit a U.S. trustee to act as sole trustee for such offerings. ¹²⁶ Accordingly, in view of the residency requirements for trustees under indentures subject to British Columbia law, Rule 10a-5 as adopted would not permit appointment of a trust company incorporated or continued and regulated as a trust company under British Columbia law. In addition, the rule as adopted will preclude the appointment of Canadian trustees as sole trustees under trust indentures of obligors incorporated or continued under the Company Act that are to be used for MJDS offerings in the United States.

The Commission is adopting Rule 4d-9 as proposed with two modifications. Canadian authorities have advised that the trust indentures of banks issuing debentures are subject to the requirements of the Bank Act. ¹²⁷ Upon examination of the provisions of the Bank Act applicable to indenture securities and indenture trustees, the Commission has determined that the Bank Act, which is similar to the CBCA, offers investor protection that is comparable to that provided by the Trust Indenture Act. Accordingly, Rule 4d-9 as adopted also provides an exemption for trust indentures of obligors that are subject to the Bank Act.

As previously noted, the Company Act does not include exemptive authority in respect of trust indentures prepared in accordance with regulations governing trust indentures in other jurisdictions. ¹²⁸ Thus, a United States obligor making an offering in British Columbia would be precluded from making the offering with an indenture qualified only under the Trust Indenture Act. While British Columbia authorities have advised that legislative changes will be sought in order to exempt the trust indentures of United States obligors that comply with the Trust Indenture Act from the requirements of the Company Act, it is unclear when such changes will be effected. Under the circumstances, the rule has been revised to exclude its availability for offerings made by obligors incorporated or continued under the Company Act. British Columbia obligors making offerings of debt securities in the United States would be required to do so pursuant to an indenture that is qualified under the Trust Indenture Act, including the requirement for a United States institutional trustee.

Under new Rules 4d-7 and 10a-5, offerings of debt securities under the MJDS would be made by filing the MJDS registration statement, the Canadian trust indenture, and Form F-X with the Commission. The Canadian trustee would not be required to file a Form T-1 in respect of its indenture trusteeship.

I.Liability

Canadian issuers filing documents with the Commission under the MJDS are subject to civil liability and antifraud provisions of the U.S. securities laws. ¹²⁹ In addition, MJDS registration statements are subject to the authority of the Commission to suspend their effectiveness. ¹³⁰

Commenters have expressed concern that an offering document prepared under applicable Canadian rules in accordance with MJDS forms will be considered misleading solely because information required by other existing Commission forms is omitted. By adopting the MJDS, the Commission in essence is adopting as its own requirements the disclosure requirements of Canadian forms. The effect is the same as if the Commission had set forth each Canadian requirement within the MJDS forms. Moreover, different disclosure is required under Commission registration and reporting forms available to different categories of issuers under present Commission practice. Separate sets of forms for foreign and U.S. issuers have long existed under the Securities Act and the Exchange Act. Accordingly, good faith compliance with the disclosure requirements of the home jurisdiction, as construed by Canadian regulatory authorities, will constitute compliance with the applicable U.S. federal securities disclosure requirements, even if such compliance results in the omission of information which might otherwise have been required as a line item in registration statements filed by U.S. issuers on the Commissions other registration forms.

Further, violation of a home jurisdiction disclosure requirement with respect to an MJDS document will not automatically disqualify the issuer from use of the MJDS with respect to that transaction or report. Instead, the issuer will have violated both a home jurisdiction requirement and an identical Commission disclosure requirement with respect to that document.

J.The Canadian Multijurisdictional Disclosure System

The Canadian MJDS for U.S. issuers is largely parallel in scope to the MJDS for Canadian issuers being adopted by the Commission. Like the MJDS for Canadian issuers, securities registration for rights offerings, exchange offers, business combinations ¹³¹ and offerings of investment grade securities, among others, may be made by U.S. issuers under the Canadian MJDS. Under the MJDS as it will operate in Canada, U.S. issuers are able to make public offerings of securities in all provinces and territories of Canada on the basis of prospectuses prepared in accordance with U.S. law. Such prospectus disclosure will be updated in accordance with U.S. requirements, and U.S. documents will be used to comply with continuous reporting requirements. U.S. issuers making shelf offerings must comply with U.S. shelf requirements. Tender offers for securities of U.S. issuers meeting eligibility criteria similar to those set forth in this release will be deemed to comply with applicable Canadian regulations if they are conducted in accordance with the provisions of the Williams Act. In addition, tender offers for securities of U.S. issuers with 20 percent or more Canadian holders must comply with certain Canadian substantive rules applicable to integration of pre-bid purchases with the offer and to valuation requirements in the case of issuer and insider bids.

The Canadian MJDS for U.S. issuers will be implemented in Canada through publication of a national policy statement by the Canadian Securities Administrators (CSA), together with the issuance of blanket orders and rulings by the securities regulatory authority of each Canadian province and territory. National Policy Statement No. 45, which sets out the rules governing the use of the Canadian MJDS, is attached as Appendix D to this release and will become effective on the same date as the MJDS set forth in this release. ¹³²

K.Monitoring Efforts in Connection with the MJDS

The CSA has considered the potential impact that the MJDS may have on the Canadian capital markets. The CSA believes the MJDS will benefit the Canadian capital markets.

However, there is a Canadian concern that the U.S. Glass-Steagall Act puts bank-owned dealers at a disadvantage in competing for underwriting assignments when Canadian issuers use the MJDS to finance in the United States. As a result of the Glass-Steagall Act, bank-owned dealers currently are subject to various restrictions on their U.S. underwriting activities, including, most importantly, a limit on the dollar volume of U.S. underwritings. The bank-owned dealers are particularly concerned about the effect the MJDS may have on their equity underwriting business.

Given the importance to the CSA of having a strong dealer community knowledgeable of and committed to the Canadian capital markets, the CSA believes the MJDS should include a safety valve that is available if the MJDS does prove to harm the Canadian dealer community substantially. The CSA will monitor the effect of the MJDS and obtain input from Canadian dealers and otherwise monitor the effects of the MJDS on the Canadian dealer community. In addition, the securities regulators in Canada will, if appropriate, hold hearings after an initial period of not more than two years following the implementation of the MJDS to review the MJDS, including its impact on bank-owned dealers. If the hearings demonstrate that the MJDS has had and will continue to have a material adverse effect on the Canadian dealer community, the CSA and the Commission will commence rulemaking proceedings to seek comment on such changes to the MJDS as are needed to alleviate such adverse effect on the dealers and to ensure that the MJDS achieves its policy goals.

IV.MODIFICATIONS TO THE CURRENT REGISTRATION AND REPORTING SYSTEM FOR ALL CANADIAN ISSUERS

As noted in the Reproposal, while non-Canadian foreign private issuers have been provided a special registration and reporting system under the Securities Act and Exchange Act, ¹³³ certain Canadian foreign private issuers have been required to use the registration and reporting forms applicable to U.S. companies. Such treatment reflected the inter-relationship of U.S. and Canadian capital markets and the geographical proximity of the two countries. The Commission has reevaluated the policy of distinguishing Canadian issuers from other foreign issuers. ¹³⁴

Consequently, pursuant to revisions being adopted, ¹³⁵ any Canadian foreign private issuer may use Form 20-F as a registration statement or as an annual report under the Exchange Act. ¹³⁶ Canadian foreign private issuers are also eligible to use the Securities Act registration forms designed for foreign issuers. ¹³⁷ Thus, Canadian issuers have the same access to Commission forms as other foreign issuers. ¹³⁸

The adopted revisions also affect the application of the Commissions proxy rules and share ownership reporting requirements and short-swing profit recapture rules to Canadian issuers. As revised, Rule 3a12-3 under the Exchange Act ¹³⁹ exempts foreign private issuers, including Canadians, from Sections 14(a), 14(b), 14(c), 14(f) and 16 of the Exchange Act. ¹⁴⁰

Despite the revisions being adopted, Canadian foreign private issuers continue to be eligible to use forms prescribed for U.S. companies, if they so elect. A Canadian foreign private issuer who chooses to report or register on forms designed for U.S. companies does not thereby become ineligible to rely on the exemption from the Commissions proxy, share ownership and short-swing profit provisions noted above. While Canadian issuers using Form 10-K are accustomed to satisfying certain disclosure item requirements by incorporating sections of their proxy statements filed with the Commission, Canadian issuers relying on the exemption will be unable to do so. In that case, such 10-K item requirements must be satisfied by directly supplying the information within the Form. ¹⁴¹

V.TRANSITION FROM ONE REGISTRATION AND REPORTING SYSTEM TO ANOTHER

Since revisions being adopted will allow certain Canadian issuers to register and report on forms for which they were previously ineligible, it is to be expected that Canadian issuers will be switching from the integrated disclosure system designed for U.S. companies to the integrated disclosure system designed for foreign companies. In addition, Canadian foreign private issuers that have been filing their proxy materials can be expected to stop doing so in reliance upon the Rule 3a12-3 exemption. Similarly, persons who have been filing reports under Section 16 with regard to their ownership of securities of certain Canadian issuers will also be able to discontinue doing so where the securities will be exempt from that Section by virtue of that Rule.

Although none of the new forms or rules described in this Release may be relied upon prior to the effective date, commenters on the Proposals raised questions regarding their use after the effective date. Persons wishing to make the transition from the existing rules and forms to the adopted rules and forms should abide by the following procedures. First, any Canadian issuer that currently is filing annual reports under the Exchange Act on Form 10-K but becomes eligible to use Forms 20-F or 40-F may use the latter forms for any fiscal year that ends after the effective date of this Release. If such an issuer completes its fiscal year prior to the effective date, but its annual report on Form 10-K would be due on or after the effective date, that issuer may use Form 10-K, 20-F or 40-F but must comply with the due date applicable to the Form chosen. If such an issuer completes its fiscal year and its Form 10-K is due before the effective date, it should file such Form 10-K.

With respect to quarterly reports by a Form 10-K filer, a Canadian issuer switching to the 20-F or 40-F system of reporting need only continue filing reports on Form 10-Q for those quarters completed prior to the effective date of this Release if the due date for such 10-Q is also before the effective date. When the due date for a 10-Q is on or after the effective date, quarterly results announced by Canadian issuers for quarters ending before then may, however, have to be provided under cover of Form 6-K.

Canadian issuers are not expected to monitor on a continuous basis whether or not they continue to be eligible to use a particular system of Exchange Act forms for reporting. An issuer who is eligible to file a Form 40-F at the end of a fiscal year will be presumed to be eligible to use it at the date of filing and to be eligible to use Form 6-K in connection therewith until the end of its next fiscal year.

With respect to proxy requirements, no Canadian issuer newly eligible for the exemption provided by rule 3a12-3 need file any proxy material pursuant to Section 14 on or after the effective date specified in this Release. Issuers who have filed proxy materials with the Commission prior to the effective date but have not begun their proxy solicitations prior thereto may choose to conduct such solicitation pursuant to Canadian law rather than pursuant to Section 14.

Persons ceasing to be required to report under Section 16 with respect to a class of securities because of the adoption of the revised Rule 3a12-3 exemption should file no later than July 10, 1991 a Form 4 disclosing all reportable transactions taking place prior to the effective date that have not been reported previously. ¹⁴² Otherwise, those persons ceasing to have to report due to the exemption being adopted will have no reporting obligations on or after the effective date.

Finally, Canadian issuers that have filed registration statements under the Securities Act on Commission forms but become eligible for MJDS forms following the effective date of this Release may by amendment transform those registration statements from one form to another. ¹⁴³ For effective registration statements, the issuer should file a post-effective amendment with home jurisdiction disclosure using the MJDS form for which it is newly eligible and clearly identify on the cover thereof that by filing such an amendment it is switching from the previously filed form to the MJDS form. For registration statements that have not become effective, a pre-effective amendment of the same nature should be filed. ¹⁴⁴

VI. STATE SECURITIES REGULATION

In addition to complying with the federal securities laws, issuers selling their securities in the United States are subject to state securities laws (including the District of Columbia and Puerto Rico) of those jurisdictions where offers and sales are made. Generally, those laws require registration of securities offered to persons in the state. In most jurisdictions, the registration statement filed with the Commission also will satisfy the state filing requirements. The filings are subject to review by each of the states, as to the adequacy of the disclosure and, in many states, for compliance with additional substantive standards.

State laws provide several exemptions from registration provisions; the two existing exemptions most relevant to the MJDS are for sales to existing securityholders of the issuer, including rights offerings, and for securities traded in specified marketplaces. The former exemption is for sales to existing securityholders (including holders of convertible securities or certain warrants) where no commission or other remuneration (other than a standby commission) is paid for solicitation of any securityholders in the state. The marketplace exemptions generally apply to securities listed on the New York and American Stock Exchanges or quoted on the NASDAQ National Market System, and in some states on specified regional exchanges. Securities of the same issuer which are senior to securities listed or quoted on an exempt marketplace generally are also exempt.

The specific requirements for offering and selling securities in any state are governed by that jurisdictions statutes, rules and policies. Nevertheless, the North American Securities Administrators Association (NASAA), which represents all state securities regulators as well as Canadian provincial regulators and the securities authorities of Mexico, proposes uniform guidelines and procedures which are frequently adopted by many of its member states. In April 1989, NASAA adopted a Statement on Internationalization of the Securities Markets, in which it urged securities regulators to encourage legitimate capital raising activities across national borders, subject to minimum rules to ensure investor protection. NASAA also passed a resolution on September 14, 1989 endorsing the MJDS as originally proposed. The NASAA resolution called upon its membership to take any action necessary to accommodate MJDS offerings within state securities laws. NASAA also formed a special task force to work with the Commission and Canadian regulators to determine what accommodations would be appropriate at the state level.

NASAA thereafter conducted a survey of securities administrators in all states, Puerto Rico and the District of Columbia to gather information regarding how such administrators planned to accommodate MJDS offerings in their jurisdictions and the number of state exemptions from registration that may be available to MJDS issuers. ¹⁴⁵ Based upon the information obtained from the survey, on August 30, 1990 NASAA adopted four Model Rules to the Uniform Securities Act (1956) and recommended their adoption, where necessary, to the membership. The Model Rules provide, inter alia, for: (a) harmonization of state review periods with Canadian seven-day review periods; (b) acceptance of MJDS Form F-7 in lieu of any state form that may be required to claim an exemption from registration for a rights offering to existing security holders; (c) acceptance of financial information presented in the registration statement in conformity with Canadian generally accepted accounting principles to the extent permitted under the MJDS; and (d) an exemption from registration for secondary trading of securities which are the subject of an MJDS offering and for which a registration statement on Form F-8, F-9 or F-10 has become effective with the Commission. Because Form F-80 was not intended to be part of the Model Rules, some states may not incorporate Form F-80 into their state laws.

Some states already have adopted those rules or similar measures necessary to produce such results. It is anticipated by NASAA that similar action will be taken by substantially all states within the immediate future. Some states are required by their administrative procedures acts to wait for Commission action before formally adopting the changes.

VII. COST-BENEFIT ANALYSIS

The Commission is not aware of any additional costs that will result from the MJDS, but as eligible issuers will be able to avoid expenses associated with the preparation of more than one disclosure document, benefits are expected to result for such issuers. With respect to the revisions to existing rules and forms to treat Canadian foreign private issuers like all other foreign private issuers, additional costs are also not anticipated. Since use of the foreign integrated disclosure system will be voluntary for Canadian issuers currently using Commission forms, the costs of converting from one system to the other are not mandated. In fact, in light of the expansion of the exemption from the proxy rules and the operation of Section 16, some benefit can be expected to result. A few Canadian issuers commenting on the Reproposal stated that they would expect to experience cost savings if the reproposed system were adopted. U.S. issuers are unaffected by such changes.

With respect to the new rules under the Trust Indenture Act, the benefit to designated Canadian obligors and Canadian trustees (the only entities eligible for exemption under the rules) of permitting appointment of Canadian trustees for offerings made in the United States by Canadian obligors, and exempting trust indentures of such obligors from the operation of specified provisions of the Trust Indenture Act, greatly outweighs any burden. Any impact on such entities is expected to be minimal. The rules also will benefit public securityholders by facilitating the expansion of investment opportunities for U.S. citizens by removing barriers to public issuances of debt securities by Canadian registrants in the United States.

VIII. REGULATORY FLEXIBILITY ACT CERTIFICATION

Pursuant to Section 605(b) of the Regulatory Flexibility Act [5 U.S.C. §605(b)], the Chairman of the Commission has certified that the adoption of the MJDS and the revisions to the registration and reporting procedures for Canadian issuers will not have a significant impact on a substantial number of small entities. That certification, including the reasons therefor, is attached to this release as Appendix B.

IX. EFFECTIVE DATE

The MJDS shall be effective on July 1, 1991, in accordance with the Administrative Procedure Act, which allows effectiveness in less than 30 days after publication for, inter alia, a substantive rule which grants or recognizes an exemption or relieves a restriction and as otherwise provided by the agency for good cause found and published with the rule. 5 U.S.C. §553(d)(1) and (3). It is necessary for the MJDS to become effective on July 1, 1991 in order to coordinate the effectiveness with the MJDSs counterpart being adopted by Canadian provinces and territories on that date.

X.TABLE OF CONTENTS OF RULES, FORMS AND SCHEDULES

                                                                           PAGE
1.17 CFR Part 200__Authority
   Rule 30-1(f) of Rules on Delegating Authority to Division Directors
   Rule 30-3(a)(35) of Rules on Delegating Authority to Division Directors
2.17 CFR Part 201__Authority
   Rule 24
3.17 CFR Part 210__Authority
   Rules 3-01, 3-02, 3-12 and 3-19 of Regulation S-X
4.17 CFR Part 229__Authority
   Items 302, 402, 404 and 601 of Regulation S-K
Securities Act
5.17 CFR Part 230__Authority
6.Rule 158__Definitions for Section 11(a)
7.Rule 175__Liability for Certain Statements by Issuers
8.Rule 424__Filing of Prospectuses, Number of Copies
9.Rule 467__Effectiveness of Registration Statements and Amendments
  thereto on Forms F-7, F-8, F-9 and F-10
10.Rule 473__Delaying Amendments
11.Rule 502__General Conditions to be Met
12.17 CFR Part 239__Authority
13.Form S-2__General Instruction I.E.
14.Form S-3__General Instruction I.A.5
15.Form S-4__Instruction F
16.Form S-8__General Instructions C, G and Items 3, 9
17.Form S-11__General Instruction E
18.Form F-1__General Instruction I.A
19.Form F-2__General Instructions I.A., I.D., I.E. and I.G. and Items 11
   and 12 and Instructions
20.Form F-3__General Instructions I.A.1., I.A.6., I.B.1. and I.B.3. and
   Items 11 and 12
21.Form F-4__General Instructions A.1. and C.1. and Items 10, 11, 12,
   13, and 17
22.Description of New Forms:
   Form F-7__Registration Statement
   Form F-8__Registration Statement
   Form F-9__Registration Statement
   Form F-10__Registration Statement
   Form F-80__Registration Statement
   Form F-X__Appointment of Agent
Exchange Act
23.17 CFR Part 240__Authority
24.Rule 3a12-3__Exemptions from Sections 14(a), 14(b), 14(c) and 14(f)
   and Section 16
25.Rule 3b-6__Liability for Certain Statements by Issuers
26.Rule 12g-3__Registration of Securities of Successor Issuers
27.Rule 12g3-2__Exemption for ADRs and Certain Foreign Securities
28.Rule 12h-4__Exemption from Duty to File Reports Under Section
   15(d)
29.Rule 13a-3__Reporting by Form 40-F Registrant
30.Rule 13a-10__Transition Reports
31.Rule 13a-16__Reports of Foreign Private Issuers on Form 6-K
32.Rule 13e-4__Tender Offers by Issuers
33.Schedule 13E-4F__Tender Offer Statement
34.Rule 14d-1__Scope of and Definitions Applicable to Regulations 14D
   and 14E
35.Schedule 14D-1F__Tender Offer Statement
36.Schedule 14D-9F__Recommendation of Subject Company
37.Rule 14e-2__Position of Subject Company
38.Rule 15d-4__Reporting by Form 40-F Registrants
39.Rule 15d-5__Reporting by Successor Issuers
40.Rule 15d-10__Transition Reports
41.Rule 15d-16__Reports of Foreign Private Issuers on Form 6-K
42.17 CFR Part 249__Authority
43.Form 20-F__Registration of Foreign Private Issuers
44.Form 40-F__Registration of Securities of Certain Canadian
   Issuers
45.Form F-X__Appointment of Agent for Service of Process
46.Form 6-K__Report of Foreign Private Issuers
47.Form 10-K__Annual and Transition Reports
Trust Indenture Act
48.17 CFR Part 260__Authority
49.Rule 0-11__Liability for Certain Statements by Issuers
50.Rule 4d-9__Exemption for Canadian Trust Indentures
51.Rule 10a-4__Consent of Trustee to Service of Process
52.Rule 10a-5__Eligibility of Canadian Trustees
53.17 CFR Part 269__Authority
54.Form F-X__Appointment of Agent for Service of Process
55.Form T-1__Statement of Eligibility
56.Form T-6__Application under Section 310(a)(1)

XI.STATUTORY BASIS OF RULES, FORMS

AND SCHEDULES AND RULE AND FORM REVISIONS

These revisions are being adopted pursuant to Sections 7, 8, 10 and 19 of the Securities Act, ¹⁴⁶ Sections 3(b), 4A, 12, 13, 14, 15, 16, and 23 of the Exchange Act, ¹⁴⁷ and Sections 304, 305, 307, 308, 310, 314 and 319 of the Trust Indenture Act. ¹⁴⁸

List of Subjects in 17 CFR Parts 200, 201, 210, 229, 230, 239, 240, 249, 260 and 269.

Authority delegations (Government agencies), Accounting, Reporting and recordkeeping requirements, Securities, Trusts and trustees.

XII.TEXT OF RULES, FORMS AND SCHEDULES AND RULE AND FORM REVISIONS

In accordance with the foregoing, Title 17, Chapter II of the Code of Federal Regulations is amended as follows:

PART 200--ORGANIZATION; CONDUCT AND ETHICS; AND INFORMATION AND REQUESTS

Subpart A Organization and Program Management

1.The authority citation for Part 200, Subpart A is revised to read as follows:

Authority: 15 U.S.C. 77s, 78d-1, 78d-2, 78w, 79t, 77sss, 80a-37, 80b-11, unless otherwise noted.

Section 200.30-1 is also issued under 15 U.S.C. 77f, 77g, 77h, 77j, 78c(b), 78l, 78m, 78n, 78o(d).

Section 200.30-3 is also issued under 15 U.S.C. 78b, 78d, 78f, 78k-1, 78s, 78q, 78eee, 79d.

2.The authority citations following Sections 200.30-1 and 200.30-3 are removed.

3.By amending paragraph (f) of §200.30-1 to add paragraph (f)(14) to read as follows:

§200.30-1 Delegation of authority to Director of Division of Corporation Finance

* * * * *

(f)***

(14)To determine with respect to a tender or exchange offer otherwise eligible to be made pursuant to Rule 14d-1(b) (§240.14d-1(b) of this chapter) whether, in light of any exemptive order granted by a Canadian federal, provincial or territorial regulatory authority, application of certain or all of the provisions of Sections 14(d)(1) through 14(d)(7) of the Exchange Act, Regulation 14D and Schedules 14D-1 and 14D-9 thereunder, and Rule 14e-1 of Regulation 14E, to such offer is necessary or appropriate in the public interest.

* * * * *

4.By revising paragraph (a)(35) of §200.30-3 to read as follows:

§200.30-3 Delegation of authority to Director of Division of Market Regulation

* * * * *

(a)***

(35)(i)To grant exemptions from Rule 13e-4 (§240.13e-4 of this chapter) pursuant to Rule 13e-4(h)(7) (§240.13e-4(h)(7) of this chapter);

(ii)To determine with respect to a tender or exchange offer otherwise eligible to be made pursuant to Rule 13e-4(g) (§240.13e-4(g) of this chapter) whether, in light of any exemptive order granted by a Canadian federal, provincial or territorial regulatory authority, application of certain or all of the provisions of Section 13(e)(1) and Rule 13e-4 and Schedule 13E-4 thereunder to such offer is necessary or appropriate in the public interest.

* * * * *

PART 201--RULES OF PRACTICE

5.The authority citation for Part 201 is revised to read as follows:

Authority: 15 U.S.C. 77s, 78w, 79t, 77sss, 80a-37, 80b-11, unless otherwise noted.

Section 201.6 is also issued under 15 U.S.C. 77h, 77ttt, 78d-1, 78v, 79s, 80a-40, 80b-12.

Section 201.23(e) is also issued under 28 U.S.C. 2112(a).

Section 201.24 is also issued under 15 U.S.C. 77f, 77g, 77h, 77j, 78c(d), 78l, 78m, 78n, 78o(d).

6.The authority citation following Section 201.24 is removed.

7.By revising the first sentence of the introductory text of §201.24 to read as follows:

§201.24 Incorporation by reference.

Where rules, regulations, or instructions to forms of the Commission permit incorporation by reference, a document may be so incorporated by reference to the specific document and to the prior filing or submission in which such document was physically filed or submitted.***

* * * * *

PART 210--FORM AND CONTENT OF AND REQUIREMENTS FOR FINANCIAL STATEMENTS, SECURITIES ACT OF 1933, SECURITIES EXCHANGE ACT OF 1934, PUBLIC UTILITY HOLDING COMPANY ACT OF 1935, INVESTMENT COMPANY ACT OF 1940, AND ENERGY POLICY AND CONSERVATION ACT OF 1975

8.The authority citation for Part 210 is revised to read:

Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 77aa(25), 77aa(26), 78l, 78m, 78n, 78o, 78w(a), 79e(a)(b), 80a-8, 80a-20, 80a-29, 80a-30, 80a-37, unless otherwise noted.

Section 210.3-02 is also issued under 15 U.S.C. 79n, 79t(a).

Section 210.3-19 is also issued under 15 U.S.C. 80b-11.

9.The authority citations following Sections 210.3-01, 210.3-02, 210.3-12 and 210.3-19 are removed.

10.By revising paragraph (h) of §210.3-01 to read as follows:

§210.3-01 Consolidated balance sheets.

* * * * *

(h)Any foreign private issuer, other than a registered management investment company or an employee plan, may file the financial statements required by §210.3-19 in lieu of the financial statements specified in this rule.

11.By revising paragraph (d) of §210.3-02 to read as follows:

§210.3-02 Consolidated statements of income and changes in financial position.

* * * * *