Securities Law & Instruments


Application to the Ontario Securities Commission by an issuer whose securities are quoted on the Canadian Trading and Quotation System Inc., for an exemption from the requirements contained in paragraph (d) of the definition of "qualifying issuer" in Multilateral Instrument 45-102 Resale of Securities (MI 45-102). Relief granted, subject to certain conditions. One condition of order is that it expires on the date of amendment or repeal of MI 45-102.

Instrument Cited

Multilateral Instrument 45-102 Resale of Securities.









UPON the application (the "Application") of Quadra Resources Corp. (the "Issuer") to the Director for an order (the "Order") pursuant to subsection 4.1(1) of Multilateral Instrument 45-102 Resale of Securities ("MI 45-102") that, subject to certain conditions, the Issuer be exempt from the conditions contained in paragraph (d) of the definition of "qualifying issuer" in MI 45-102 (the "Qualified Market Requirement");

AND UPON considering the Application and the recommendation of staff of the Ontario Securities Commission (the "Commission");

AND UPON the Issuer having represented to the Director as follows:

1. The Issuer was incorporated under the Business Corporations Act (Alberta) on July 12, 1994 as Battle Resources Inc. On January 30, 1997, the Issuer changed its name to Quadra Resources Corp.

2. The Issuer's head, principal and registered office is located at 3100, Bow Valley Square III, 255 - 5th Avenue S.W. Calgary, Alberta, T2P 3G6.

3. The Issuer has been a reporting issuer under applicable securities legislation in the Provinces of Alberta, British Columbia, and Ontario since May 15, 1997 as a result of filing a takeover bid circular in those jurisdictions.

4. On September 11, 1997, the common shares of the Issuer (the "Common Shares") were listed and posted for trading on the Canadian Dealing Network ("CDN"). On October 2, 2000, the Common Shares were listed and posted for trading on the TSX Venture Exchange ("TSXV") as a result of the acquisition of CDN by the TSXV.

5. On November 24, 2003, the Issuer's Common Shares were accepted for quotation on the Canadian Trading and Quotation System Inc. ("CNQ") and were voluntarily delisted from the TSXV, effective November 21, 2003.

6. The Issuer's Common Shares are currently qualified for quotation and trading on CNQ.

7. The Issuer intends to complete a private placement offering of Common Shares in the Provinces of Alberta, British Columbia and Ontario (the "Private Placement Jurisdictions").

8. Under MI 45-102, CNQ is not a "qualified market."

9. CNQ is incorporated under the Business Corporations Act (Ontario), and its head office is located in Toronto, Ontario.

10. Under the mutual reliance review system for exemptive relief applications ("MRRS"), each of the Private Placement Jurisdictions, other than Ontario, issued an MRRS decision document dated October 21, 2003 which exempts CNQ-quoted issuers from the requirement to have a class of equity securities listed or quoted on a "qualified market" in order to be a "qualifying issuer" under MI 45-102.

11. CNQ operates an electronic central limit order book auction market augmented with market maker liquidity. The electronic order book allows for full pre- and post-trade transparency, automatic application of trading priority rules (pure price and time priority) and effective trading surveillance.

12. CNQ was recognized as a quotation and trade reporting system by the Commission on February 28, 2003.

13. CNQ has made an application to the Commission for recognition as an exchange operating in Ontario and to the Alberta and Quebec Securities Commissions for an exemption from the requirement to be recognized as an exchange carrying on business in those jurisdictions.

14. Securities traded on CNQ may have one or more market makers, who must post reasonable continuous two-sided markets to add liquidity and immediacy for public investors for stocks with market makers. Market makers enjoy limited exclusive order entry privileges for the stocks in which they are approved as market makers, chiefly the ability to see the order flow from other dealers. Stocks without a market maker trade in a pure price and time auction market.

15. CNQ has engaged Market Regulation Services Inc. ("RS") to provide market regulation services to CNQ's marketplace, including market surveillance, trade desk compliance and investigations and enforcement. Dealers trading on CNQ ("CNQ Dealers") must be members in good standing of the Investment Dealers Association of Canada or another recognized self-regulatory organization.

16. Trades on CNQ will be confirmed to the Canadian Depository for Securities Limited for settlement.

17. In order to qualify for quotation on CNQ, a CNQ Issuer must:

(a) be a reporting issuer in British Columbia, Alberta, Ontario or Quebec;

(b) satisfy minimum standards for quotation, including having an active business or a plan to develop an active business;

(c) agree to follow CNQ's policies and submit to CNQ's jurisdiction to suspend or disqualify its securities from quotation and trading;

(d) post on the CNQ website a prospectus-like base disclosure document including management's discussion and analysis (the "Quotation Statement"); and

(e) post an enhanced disclosure record on CNQ's website, which is updated through monthly progress reports, quarterly updates and a current Quotation Statement annually;

18. CNQ reviews the Quotation Statement to ensure it is complete and that the issuer meets the minimum standards for quotations but dues not review and pre-clear transactions.

19. CNQ undertakes periodic compliance reviews to determine a CNQ Issuer's compliance with CNQ rules. CNQ Issuers that fail to comply with CNQ rules are subject to sanctions that include suspension and disqualification from quotation on CNQ.

20. Once quoted, a CNQ Issuer is subject to the same timely disclosure requirements applicable to listed issuers on Canadian exchanges.

21. RS is responsible for monitoring compliance of timely disclosure rules and overall market integrity, and will investigate potential instances of insider trading and market manipulation. RS will forward results of those investigations to CNQ and to the relevant securities regulatory authority.

22. All of the continuous disclosure materials filed by the Issuer are available on the System for Electronic Document Analysis and Retrieval.

23. The Issuer is not in default of any requirements under the Securities Act (Ontario), any of the rules or regulations made thereunder, or of any requirements or policies of CNQ.

AND UPON the Director being satisfied that to do so would not be prejudicial to the public interest;

IT IS HEREBY ORDERED pursuant to subsection 4.1(1) of MI 45-102 that the Issuer is exempt from the Qualified Market Requirement, provided that the Issuer:

(a) has a class of equity securities quoted on CNQ;

(b) has not been notified by CNQ that it does not meet the requirements to maintain that quotation;

(c) has not been declared inactive, suspended or the equivalent by CNQ;

(d) the Issuer, or selling security holder in the case of a control distribution, files a Form 45-102F2 on or before the tenth day after the distribution date of any securities certifying that the Issuer is a qualifying issuer except for the requirement that it have a class of equity securities listed or quoted on a "qualified market"; and

(e) the Order will expire on the date of amendment or repeal of MI 45-102.

February 11, 2004.

"Erez Blumberger"