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Notice 2004-001 - New CSA Rule For Hold Periods

January 20, 2004


The Canadian Securities Administrators have adopted revisions to Multilateral Instrument 45-102 Resale of Securities. The revisions eliminate the concept of �qualifying issuer;� all CNQ issuers who otherwise meet the requirements of new MI 45-102 will be eligible for a four-month hold period on prospectus-exempt offerings of securities.

Hold and Seasoning Periods

The effect of the new rule is that issuers will no longer have to rely on the blanket orders granted to CNQ Issuers last year to obtain a four-month hold period on exempt offerings. Issuers will not have to make application to the Ontario Securities Commission for exemptive relief in order to obtain the shorter hold period. Securities that were issued subject to a twelve-month hold period under the current version of the rule will have the period shortened to 4 months from the date of distribution upon implementation of the new rule.

Sales from Control

Sales by control block holders on CNQ are currently qualified by filing Form 45-102F3 Notice of Intention to Distribute with CNQ and the applicable securities commission(s). When the new rule comes into force, such sales will be qualified by filing new Form 45-102F1. If the filer has a valid Form 45-102F3 outstanding at the time the new rule comes into force, a Form 45-102F1 does not have to be filed until 30 days after the Form 45-102F3 was filed.


The new rule will come into force on March 30, 2004 in conjunction with new continuous disclosure rules applicable to all reporting issuers. In Ontario, implementation is contingent on the Minister of Finance not rejecting the instrument or returning it for further consideration.


Multilateral Instrument 45-102 will not be adopted in Qu�bec, but will be adopted by all other provinces and territories. The Commission des valeurs mobili�res du Qu�bec has adopted similar relief in Decision 2003-C-0413 dated December 16, 2003, which will also be effective on March 30, 2004.

Text of the New Rules

The text of new MI 45-102 is available electronically here.

The text of the CVMQ order is available electronically here (in French only)


Please direct any questions to Timothy Baikie, General Counsel & Corporate Secretary at 416.572.2000 x2282.



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