(1) In this section:
“designated Canadian jurisdiction” means Alberta, British Columbia, Manitoba, New Brunswick, Nova Scotia, Ontario, Québec, or Saskatchewan;
“designated exchangeable security” means an exchangeable security which provides the holder of the security with economic and voting rights which are, as nearly as possible except for tax implications, equivalent to the underlying securities;
“exchangeable security” means a security of an issuer that is exchangeable for, or carries the right of the holder to purchase, or of the parent issuer to cause the purchase of, an underlying security;
“exchangeable security issuer” means a person or company that has issued an exchangeable security;
“parent issuer”, when used in relation to an exchangeable security issuer, means the person or company that issues the underlying security; and
“underlying security” means a security of a parent issuer issued or transferred, or to be issued or transferred, on the exchange of an exchangeable security.
(2) Except as provided in this subsection, an exchangeable security issuer satisfies the requirements in this Instrument if
(a) the parent issuer is the beneficial owner of all the issued and outstanding voting securities of the exchangeable security issuer;
(b) the parent issuer is either
(i) an SEC issuer with a class of securities listed or quoted on a U.S. marketplace that has filed all documents it is required to file with the SEC; or
(ii) a reporting issuer in a designated Canadian jurisdiction that has filed all documents it is required to file under this Instrument;
(c) the exchangeable security issuer does not issue any securities, and does not have any securities outstanding, other than
(i) designated exchangeable securities;
(ii) securities issued to and held by the parent issuer or an affiliate of the parent issuer;
(iii) debt securities issued to and held by banks, loan corporations, loan and investment corporations, savings companies, trust corporations, treasury branches, savings or credit unions, financial services cooperatives, insurance companies or other financial institutions; or
(iv) securities issued under exemptions from the prospectus requirement in section 2.35 of National Instrument 45-106 Prospectus Exemptions;
(d) the exchangeable security issuer files in electronic format,
(i) if the parent issuer is not a reporting issuer in a designated Canadian jurisdiction, copies of all documents the parent issuer is required to file with the SEC under the 1934 Act, at the same time as, or as soon as practicable after, the filing by the parent issuer of those documents with the SEC; or
(ii) if the parent issuer is a reporting issuer in a designated Canadian jurisdiction,
(A) a notice indicating that the exchangeable security issuer is relying on the continuous disclosure documents filed by its parent issuer and setting out where those documents can be found in electronic format, if the parent issuer is a reporting issuer in the local jurisdiction; or
(B) copies of all documents the parent issuer is required to file under securities legislation, other than in connection with a distribution, at the same time as the filing by the parent issuer of those documents with a securities regulatory authority or regulator;
(e) the exchangeable security issuer concurrently sends to all holders of designated exchangeable securities all disclosure materials that are sent to holders of the underlying securities in the manner and at the time required by
(i) U.S. laws and any U.S. marketplace on which securities of the parent issuer are listed or quoted, if the parent issuer is not a reporting issuer in a designated Canadian jurisdiction; or
(ii) securities legislation, if the parent issuer is a reporting issuer in a designated Canadian jurisdiction;
(f) the parent issuer
(i) complies with U.S. laws and the requirements of any U.S. marketplace on which the securities of the parent issuer are listed or quoted if the parent issuer is not a reporting issuer in a designated Canadian jurisdiction, or securities legislation if the parent issuer is a reporting issuer in a designated Canadian jurisdiction, in respect of making public disclosure of material information on a timely basis; and
(ii) immediately issues in Canada and files any news release that discloses a material change in its affairs;
(g) the exchangeable security issuer issues in Canada a news release and files a material change report in accordance with Part 7 of this Instrument for all material changes in respect of the affairs of the exchangeable security issuer that are not also material changes in the affairs of its parent issuer; and
(h) the parent issuer includes in all mailings of proxy solicitation materials to holders of designated exchangeable securities a clear and concise statement that
(i) explains the reason the mailed material relates solely to the parent issuer;
(ii) indicates that the designated exchangeable securities are the economic equivalent to the underlying securities; and
(iii) describes the voting rights associated with the designated exchangeable securities.
(3) The insider reporting requirement and the requirement to file an insider profile under National Instrument 55-102 System for Electronic Disclosure by Insiders does not apply to any insider of an exchangeable security issuer in respect of securities of the exchangeable security issuer so long as,
(a) if the insider is not the parent issuer,
(i) the insider does not receive, in the ordinary course, information as to material facts or material changes concerning the parent issuer before the material facts or material changes are generally disclosed, and
(ii) the insider is not an insider of the parent issuer in any capacity other than by virtue of being an insider of the exchangeable security issuer;
(b) the parent issuer is the beneficial owner of all of the issued and outstanding voting securities of the exchangeable security issuer;
(c) if the insider is the parent issuer, the insider does not beneficially own any designated exchangeable securities other than securities acquired through the exercise of the exchange right and not subsequently traded by the insider;
(d) the parent issuer is an SEC issuer or a reporting issuer in a designated Canadian jurisdiction; and
(e) the exchangeable security issuer has not issued any securities and does not have any securities outstanding, other than
(i) designated exchangeable securities;
(ii) securities issued to and held by the parent issuer or an affiliate of the parent issuer;
(iii) debt securities issued to and held by banks, loan corporations, loan and investment corporations, savings companies, trust corporations, treasury branches, savings or credit unions, financial services cooperatives, insurance companies or other financial institutions; and
(iv) securities issued under exemptions from the prospectus requirement in section 2.35 of National Instrument 45-106 Prospectus Exemptions.