The Ontario Securities Commission OSC Bulletin February 7, 2019 Volume 42, Issue 6 (2019), 42 OSCB The Ontario Securities Commission administers the Securities Act of Ontario (R.S.O. 1990, c. S.5) and the Commodity Futures Act of Ontario (R.S.O. 1990, c. C.20) The Ontario Securities Commission Published under the authority of the Commission by: Cadillac Fairview Tower Thomson Reuters 22nd Floor, Box 55 One Corporate Plaza 20 Queen Street West 2075 Kennedy Road Toronto, Ontario Toronto, Ontario M5H 3S8 M1T 3V4 416-593-8314 or Toll Free 1-877-785-1555 416-609-3800 or 1-800-387-5164 Contact Centre – Inquiries, Complaints: Fax: 416-593-8122 TTY: 1-866-827-1295 Office of the Secretary: Fax: 416-593-2318 The OSC Bulletin is published weekly by Thomson Reuters Canada, under the authority of the Ontario Securities Commission. Thomson Reuters Canada offers every issue of the Bulletin, from 1994 onwards, fully searchable on SecuritiesSource™, Canada’s pre-eminent web-based securities resource. 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No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without the prior written permission of the publisher. The publisher is not engaged in rendering legal, accounting or other professional advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. © Copyright 2019 Ontario Securities Commission ISSN 0226-9325 Except Chapter 7 ©CDS INC. One Corporate Plaza Customer Support 2075 Kennedy Road 1-416-609-3800 (Toronto & International) Toronto, Ontario 1-800-387-5164 (Toll Free Canada & U.S.) M1T 3V4 Fax 1-416-298-5082 (Toronto) Fax 1-877-750-9041 (Toll Free Canada Only) Email [email protected] Table of Contents Chapter 1 Notices / News Releases ...................... 1111 Chapter 5 Rules and Policies ................................ 1171 1.1 Notices .......................................................... 1111 5.1.1 Arrangements Regarding the Access, 1.1.1 CSA Staff Notice 45-325 Filing Collection, Storage and Use of Requirement and Fee Payable for Derivatives Data ............................................ 1171 Exempt Distributions involving Fully \ Managed Accounts ......................................... 1111 Chapter 6 Request for Comments .......................... (nil) 1.1.2 Notice of Ministerial Approval of Arrangements Regarding the Access, Chapter 7 Insider Reporting .................................. 1191 Collection, Storage and Use of Derivatives Data ............................................. 1115 Chapter 9 Legislation ............................................... (nil) 1.2 Notices of Hearing ......................................... (nil) 1.3 Notices of Hearing with Related Chapter 11 IPOs, New Issues and Secondary Statements of Allegations ............................ (nil) Financings ............................................. 1297 1.4 Notices from the Office of the Secretary ............................................ 1116 Chapter 12 Registrations ......................................... 1305 1.4.1 Dennis L. Meharchand and 12.1.1 Registrants ..................................................... 1305 Valt.X Holdings Inc. ........................................ 1116 1.4.2 Benedict Cheng et al. ..................................... 1116 Chapter 13 SROs, Marketplaces, 1.5 Notices from the Office Clearing Agencies and of the Secretary with Related Trade Repositories ............................... 1307 Statements of Allegations ............................ (nil) 13.1 SROs ............................................................... (nil) 13.2 Marketplaces ................................................ 1307 Chapter 2 Decisions, Orders and Rulings ............ 1117 13.2.1 TSX Inc. – Dark Trading Enhancements – 2.1 Decisions ...................................................... 1117 Notice of Approval ......................................... 1307 2.1.1 Mackenzie Financial Corporation et al. .......... 1117 13.3 Clearing Agencies.......................................... (nil) 2.1.2 Accelerate Financial Technologies 13.4 Trade Repositories ........................................ (nil) Inc. et al. ......................................................... 1121 2.2 Orders............................................................ 1125 Chapter 25 Other Information ................................. 1309 2.2.1 Dennis L. Meharchand and 25.1 Revocations ................................................. 1309 Valt.X Holdings Inc. – ss. 127(1), 127.1 ......... 1125 25.1.1 Husky Energy Inc. .......................................... 1309 2.2.2 NWQ Investment Management Company, LLC – s. 80 of the CFA .................. 1126 Index ............................................................................ 1311 2.3 Orders with Related Settlement Agreements .................................................... (nil) 2.4 Rulings ........................................................... (nil) Chapter 3 Reasons: Decisions, Orders and Rulings ................................................... 1135 3.1 OSC Decisions .............................................. 1135 3.1.1 Dennis L. Meharchand and Valt.X Holdings Inc. – ss. 127(1), 127.1 ......... 1135 3.1.2 Benedict Cheng et al. ..................................... 1148 3.2 Director’s Decisions ...................................... (nil) Chapter 4 Cease Trading Orders ........................... 1169 4.1.1 Temporary, Permanent & Rescinding Issuer Cease Trading Orders ......................... 1169 4.2.1 Temporary, Permanent & Rescinding Management Cease Trading Orders .............. 1169 4.2.2 Outstanding Management & Insider Cease Trading Orders .................................... 1169 February 7, 2019 (2019), 42 OSCB Chapter 1 Notices / News Releases 1.1 Notices 1.1.1 CSA Staff Notice 45-325 Filing Requirement and Fee Payable for Exempt Distributions involving Fully Managed Accounts CSA Staff Notice 45-325 Filing Requirement and Fee Payable for Exempt Distributions involving Fully Managed Accounts February 7, 2019 Purpose This notice is intended to clarify when Form 45-106F1 Report of Exempt Distribution (Form 45-106F1) of National Instrument 45-106 Prospectus Exemptions (NI 45-106) is required to be filed, and fees paid, for exempt distributions involving fully managed accounts. Background In 2016, the Canadian Securities Administrators (the CSA) introduced a streamlined and harmonized version of Form 45-106F1 as part of an effort to reduce the compliance burden for issuers and underwriters distributing securities under prospectus exemptions, while ensuring Form 45-106F1 continues to provide securities regulators with the necessary information to facilitate more effective regulatory oversight of the exempt market and improve analysis for policy development purposes. Among other changes made, the reporting of exempt distributions involving fully managed accounts was simplified to reduce regulatory burden on issuers and underwriters. In all jurisdictions, Form 45-106F1 only requires issuers and underwriters to provide information on the trust company, trust corporation or registered adviser who had purchased securities on behalf of a fully managed account in item 7 and Schedule 1 and no longer requires information about the beneficial owners of the fully managed account. While Form 45-106F1 has been harmonized, the requirement to file and pay filing fees for Form 45-106F1 continues to be governed by the securities legislation of each CSA jurisdiction. Reporting requirement for exempt distributions involving fully managed accounts Issuers and underwriters who rely on the accredited investor prospectus exemption (the AI Exemption) in section 2.3 of NI 45- 106 to distribute securities are required to file a Form 45-106F1 within a prescribed timeframe.1 An accredited investor includes: • a trust company or trust corporation registered or authorized to carry on business under the Trust and Loan Companies Act (Canada) or under comparable legislation in a jurisdiction of Canada or a foreign jurisdiction, acting on behalf of a fully managed account managed by the trust company or trust corporation;2 and • a person acting on behalf of a fully managed account managed by that person, if that person is registered or authorized to carry on business as an adviser or the equivalent under the securities legislation of a jurisdiction of Canada or a foreign issuer.3 Section 2.3(2) of NI 45-106 states that for the purpose of the AI Exemption, a trust company or trust corporation