51-501 (Blanket Order) - Local Rule 45-508 - Respecting Community Economic Development Business

In the Matter of the Securities Act,
R.S.P.E.I. 1988, Cap.S-3.1

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In the Matter of Local Rule 45-508 Respecting Community Economic Development Business (“Local Rule 45-508")
 
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In the Matter of National Instrument 51-102 Continuous Disclosure Obligations (“NI 51-102") Exemption Order (Section 13.1 of NI 51-102)

Whereas:

1. Under section 21 of Local Rule 45-508, if a community economic-development business (“CEDB”) that is not a reporting issuer has met its minimum offering amount and has certified to the trustee that all conditions of closing have been met and if the initial closing has occurred, the CEDB and every person who would be an insider of the CEDB if the CEDB were a reporting issuer and every person who would be in a special relationship with the CEDB within the meaning of section 12 of the Act if the CEDB were a reporting issuer, is subject to sections 102 and 155 of the Act and the related provisions of the rules to the same extent as if the CEDB were a reporting issuer and the person were an insider of the CEDB or in a special relationship with the CEDB subject to the exceptions set out in subsections 1(2),(3) and (4) of Local Rule 45-508.

2. NI 51-102 came into effect under the Act on March 17, 2008.  It contains the continuous disclosure requirements for all reporting issuers other than investment funds. This includes a CEDB that is subject to section 21 of Local Rule 45-508.

3. A CEDB that is subject to section 21 of Local Rule 45-508 is required to comply with the provisions in NI 51-102, many of which are not relevant to a CEDB.

The decision of the Superintendent under section 13.1 of NI 51-102 is that a CEDB is exempt from NI 51-102 except for: 

a) subsection 4.1(1) with the additional requirement that the annual financial statements, as described in the attached Appendix A, of the CEDB shall be filed within 140 days from the end of the CEDB’s most recently completed financial year;

b) subsections 4.3(1) and 4.3(2) for the interim financial statements or report, as described in the attached Appendix B, of the CEDB for the second quarter of each of its financial years with the additional requirement that these financial statements or reports shall be filed within 60 days from the end of the second quarter;

c) section 4.6 unless the CEDB sends to all its security holders a copy of the CEDB’s annual financial statements or report and second quarter financial statements or report to be filed under paragraphs a) and b) above at the same time that the financial statements are filed; and

d) Part 7.

This decision comes into effect on July 4, 2011.

Dated at Charlottetown, Prince Edward Island, this 3rd day of June, 2011.

Appendix A

Annual Financial Statements

Annual financial statements include

1 (a) an income statement, a statement of retained earnings, and a cash flow statement for

(i) the most recently completed financial year; and

(ii) the financial year immediately preceding the most recently completed financial year, if any;

(b) a balance sheet as at the end of each of the periods referred to in paragraph (a); and

(c) notes to the financial statements;

or

2 (a) a statement of comprehensive income, a statement of changes in equity, and a statement of cash flows for

(i) the most recently completed financial year; and

(ii) the financial year immediately preceding the most recently completed financial year, if any;

(b) a statement of financial position as at the end of each of the periods referred to in paragraph (a);

(c) in the following circumstances, a statement of financial position as at the beginning of the financial year immediately preceding the most recently completed financial year;

(i) the CEDB discloses in its annual financial statements an unreserved statement of compliance with IFRS, and

(ii) the CEDB

(A) applies an accounting policy retrospectively in its annual financial statements,

(B) makes a retrospective restatement of items in its annual financial statements, or

(C) reclassifies items in its annual financial statements;

(d) in the case of the CEDB’s first IFRS financial statements, the opening IFRS statement of financial position at the date of transition to IFRS; and

(e) notes to the annual financial statements.

Appendix B

Interim Financial Statements or Report

Interim Financial Statements must include

(a) a balance sheet as at the end of the interim period and a balance sheet as at the end of the immediately preceding financial year, if any;

(b) an income statement, a statement of retained earnings and a cash flow statement, all for the year-to-date interim period, and comparative financial information for the corresponding interim period in the immediately preceding financial year, if any;

(c) for interim periods other than the first interim period in a CEDB’s financial year, an income statement and cash flow statement for the six month period ending on the last day of the interim period and comparative financial information for the corresponding period in the preceding financial year, if any; and

(d) notes to the financial statements.

An interim financial report must include

(a) a statement of financial position as at the end of the interim period and a statement of financial position as at the end of the immediately preceding financial year, if any;

(b) a statement of comprehensive income, a statement of changes in equity and a statement of cash flows, all for the year-to-date interim period, and comparative financial information for the corresponding interim period in the immediately preceding financial year, if any;

(c) for interim periods other than the first interim period in a CEDB’s financial year, a statement of comprehensive income for the six month period ending on the last day of the interim period and comparative financial information for the corresponding period in the immediately preceding financial year, if any;

(d) in the following circumstances, a statement of financial position as at the beginning of the immediately preceding financial year;

(i) the CEDB discloses in its interim financial report an unreserved statement of compliance with International Accounting Standard 34 Interim Financial Reporting, and

(ii) the CEDB

(A) applies an accounting policy retrospectively in its interim financial report,

(B) makes a retrospective restatement of items in its interim financial report, or

(C) reclassifies items in its interim financial report;

(e) in the case of the CEDB’s first interim financial report required to be filed in the year of adopting IFRS, the opening IFRS statement of financial position at the date of transition to IFRS; and

(f) notes to the interim financial report.