Securities Law & Instruments

Headnote

 

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions – exemption from the prospectus requirement for certain marketing activities not expressly permitted by National Instrument 71-101 The Multijurisdictional Disclosure System so that investment dealers acting as underwriters or selling group members of an issuer are permitted to use standard term sheets and marketing materials and conduct road shows (each as defined under National Instrument 41-101 General Prospectus Requirements) in connection with future offerings under an MJDS base shelf prospectus – NI 71-101 does not contain equivalent provisions to Part 9A of National Instrument 44-102 Shelf Distributions – relief granted, provided that the conditions and requirements set out in Part 9A of NI 44-102 for standard term sheets, marketing materials and road shows are complied with.

 

Applicable Legislative Provisions

 

Securities Act, R.S.O. 1990, c. S.5, as am., s. 74(1).

National Instrument 71-101 The Multijurisdictional Disclosure System, s. 11.3.

 

January 31, 2017

 

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

BRITISH COLUMBIA AND ONTARIO

(the Jurisdictions)

 

AND

 

IN THE MATTER OF

THE PROCESS FOR

EXEMPTIVE RELIEF APPLICATIONS IN

MULTIPLE JURISDICTIONS

 

AND

 

IN THE MATTER OF

HELIUS MEDICAL TECHNOLOGIES, INC.

(the Filer)

 

DECISION

 

Background

 

1              The securities regulatory authority or regulator in each of the Jurisdictions (Decision Maker) has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the Legislation) for an exemption from the prospectus requirement for certain marketing activities not expressly permitted by National Instrument 71-101 The Multijurisdictional Disclosure System (NI 71-101) so that investment dealers acting as underwriters (as defined in the Legislation) or selling group members of (a) the Filer, or (b) a selling securityholder of the Filer are permitted to (i) use Standard Term Sheets (as defined below) and Marketing Materials (as defined below), and (ii) conduct Road Shows (as defined below) in connection with future offerings under a Final MJDS Shelf Prospectus (as defined below) together with applicable supplements as filed by the Filer in each of the provinces of Canada (the Exemption Sought).

 

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a dual application):

 

(a)           the British Columbia Securities Commission is the principal regulator for this application;

 

(b)           the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in each of Alberta, Saskatchewan, Manitoba, Québec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador; and

 

(c)           this decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.

 

Interpretation

 

2              Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.

 

Representations

 

3              This decision is based on the following facts represented by the Filer:

 

1.             the Filer is a corporation continued under the laws of Wyoming;

 

2.             the principal executive offices of the Filer are located at 400-41 University Drive, Newtown, Pennsylvania, 18940;

 

3.             as of the date hereof, the Filer is a reporting issuer in Alberta, British Columbia, Saskatchewan, Manitoba, Ontario, Québec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador and is an “SEC foreign issuer” as defined under National Instrument 71-102 Continuous Disclosure and Other Exemptions Relating to Foreign Issuers;

 

4.             the Filer is not in default of the requirements of securities legislation in any of the provinces of Canada;

 

5.             the Filer filed a registration statement on Form S-3 with the SEC on December 23, 2016 (the Registration Statement); the Registration Statement contains a preliminary shelf prospectus (the U.S. Shelf Prospectus) and will register for sale in the United States, from time to time, in one or more offerings and pursuant to one or more prospectus supplements, any combination of shares of the Filer’s Class A common stock, debt securities and warrants;

 

6.             the Filer has also filed a final MJDS prospectus dated January 26, 2017 in each of the provinces pursuant to NI 71-101 that includes the final U.S. Shelf Prospectus (the final MJDS prospectus is referred to herein as the Final MJDS Shelf Prospectus), which will qualify the distribution in each province, from time to time, in one or more offerings and pursuant to one or more prospectus supplements, any combination of shares of the Filer’s Class A common stock, debt securities and warrants;

 

7.             National Instrument 44-102 Shelf Distributions (NI 44-102) sets out the requirements for a distribution under a shelf prospectus in Canada, including requirements with respect to advertising and marketing activities; in particular, Part 9A of NI 44-102 entitled Marketing In Connection with Shelf Distributions (Part 9A) permits the conduct of "Road Shows" and the use of "Standard Term Sheets" and "Marketing Materials" (as such terms are defined in National Instrument 41-101 General Prospectus Requirements) following the issuance of a receipt for a final base shelf prospectus provided that the approval, content, use and other applicable conditions and requirements of Part 9A are complied with; NI 71-101 does not contain provisions equivalent to those of Part 9A;

 

8.             in connection with marketing an offering in Canada under the Final MJDS Shelf Prospectus, investment dealers acting as underwriters or selling group members of the Filer may wish to conduct Road Shows and utilize one or more Standard Term Sheets and Marketing Materials; any such Road Shows, Standard Term Sheets and Marketing Materials will comply with the approval, content, use and other conditions and requirements of Part 9A, as though they were applicable; and

 

9.             Canadian purchasers, if any, of securities offered under the Final MJDS Shelf Prospectus will only be able to purchase those securities through an investment dealer registered in the province of residence of the purchaser.

 

Decision

 

4              Each of the Decision Makers is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.

 

The decision of the Decision Mkers under the Legislation is that the Exemption Sought is granted in respect of each future distribution under the Final MJDS Shelf Prospectus and applicable supplements provided that in respect of such distribution, the conditions and requirements set out in Part 9A of NI 44-102 for Standard Term Sheets, Marketing Materials and Road Shows are complied with in the manner in which those conditions and requirements would apply if the Final MJDS Shelf Prospectus were a final base shelf prospectus under NI 44-102.

 

“Peter J. Brady”

Executive Director

British Columbia Securities Commission