The Ontario Securities Commission (OSC) has decided to vary a cease trade order (CTO) originally issued against Hanfeng Evergreen Inc. The CTO, which was imposed due to regulatory concerns, prohibited trading in the company’s securities. The decision to vary the CTO was made under section 144(1) of the Ontario Securities Act, R.S.O. 1990, c. S.5, which allows for such variations if they are not prejudicial to the public interest.
The variation permits beneficial shareholders who are not insiders or control persons to sell their securities outside of Canada, subject to certain conditions. These conditions include that the sale must be made through a market outside of Canada and through an investment dealer registered in Ontario. This decision was made in recognition that the original terms of the CTO placed Ontario resident shareholders at a disadvantage compared to certain shareholders who could trade their shares on foreign markets.
The outcome of this decision is that certain shareholders of Hanfeng Evergreen Inc. now have a limited ability to sell their shares, despite the CTO, provided they comply with the specified conditions. This variation aims to balance regulatory enforcement with fairness to shareholders.