Until March 30, 2004, Multilateral Instrument No. 45-102 (the "Resale Rules") imposes resale restrictions that are either 4 months or 12 months on newly issued securities, depending on whether the issuer is a "qualifying issuer". A "qualifying issuer" is a reporting issuer which is an electronic filer under SEDAR, which has filed a current Annual Information Form ("AIF"), and which has a class of equity securities listed or quoted on certain specified stock exchanges or trading markets. A reporting issuer which is not a "qualifying issuer" must issue securities with a 12 month hold period.

On March 30, 2004, changes to the Resale Rules, to Multilateral Instrument No. 45-103, "Capital Raising Exemptions", (the "Capital Raising Rules") and to National Instrument No. 51-102, "Continuous Disclosure Obligations" (the "Disclosure Rules") combine to change the landscape dramatically for reporting issuers in Canada.

First, the Disclosure Rules, to be implemented in all jurisdictions in Canada, impose substantial new disclosure requirements on reporting issuers. The Disclosure Rules require continuous and prompt disclosure of all material changes, including press releases, acquisition reports, financial statements, and management discussion and analysis; and the filing of copies of Articles of Incorporation, material contracts, and most significantly, except for "venture issuers", the annual filing of an AIF. An AIF contains disclosure about the issuer and all its aspects as of a certain date. An AIF must include meaningful analysis of the issuer and its prospects, as well as factual information. All of the disclosure documents must be set out in plain language, including short sentences, everyday language, avoiding jargon and avoiding boilerplate wording.

As a result of the fact that all reporting issuers in Canada will have filed and made available to everyone through SEDAR the continuous disclosure information required by the Disclosure Rules, the Resale Rules have eliminated the definition of "qualifying issuer" and all reporting issuers may issue securities after March 30, 2004, with 4 month hold periods. No reporting issuer is required to restrict the resale of securities for more than 4 months. including "venture issuers".

Under the Disclosure Rules, an AIF filed by an issuer must meet the form requirements of the Disclosure Rules, or, alternatively, a US reporting issuer can file its Form 10-K, Form 10-KSB or Form 20-F as its AIF.

A "venture issuer" does not have to file an AIF annually, but does need to meet all the other disclosure requirements of the Disclosure Rules. A "venture issuer" means a reporting issuer that does not have its securities listed on the Toronto Stock Exchange, a US marketplace or a marketplace outside of Canada and the US. This means, for example, that a company listed solely on the TSX-V is a "venture issuer", but a company inter-listed on the TSX-V and OTCBB is not a "venture issuer". However, the OTCBB listed issuer can file its Form 10-KSB as an AIF and meet the requirements of the Disclosure Rules.

Until March 30, 2004, the Capital Raising Rules refer to the definition of "qualifying issuer" in the Resale Rules. Since the Resale Rules have no need of the definition of "qualifying issuer" (because all reporting issuers will have the same 4 month hold period), the Capital Raising Rules have introduced the definition of "qualifying issuer" for certain purposes. The definition contains the same definition as the Resale Rules had previously. "Venture issuers", therefore, do not need to file an AIF to issue securities with 4 month holder periods, but may need to file an AIF in order to qualify for certain capital-raising exemptions. For example, in the amended Capital Raising Rules, a short form of Offering Memorandum, Form 45-103F2, is only available to "qualifying issuers" because the issuer’s AIF is incorporated by reference. A venture issuer that expects to raise financing by way of Offering Memorandum may therefore wish to voluntarily file an AIF to reduce cost and delay in its proposed financings.

The Sarbanes-Oxley Act and Canadian Securities Administrators MI 52-109 (taking effect March 30/04) both have serious implications for how public companies, and their chief executive and financial officers, must now govern themselves, and create personal liability. The new rules require certifications of financial disclosure by CEOs and CFOs of public companies in Canada and the US.

On March 17, 2004, Clark Wilson LLP and Grant Thornton LLP are offering a breakfast seminar, CEO/ CFO CERTIFICATIONS: Disclosure Controls and Internal Controls for Canadian and U.S. Public Companies. This seminar will provide you with clear, concise and most importantly, practical information that will allow you to develop, evaluate and certify your company's internal and disclosure controls and procedures. The information you will receive in this seminar will be both useful and timely.

Clark Wilson LLP is delighted to announce that effective February 1, 2004, Grant Wong has joined our Corporate Finance / Securities Law Department. Grant is a native of Vancouver and a graduate of the University of British Columbia. Grant received his Bachelor of Commerce (Honors) in 1993 and his Bachelor of Laws in 1996.

From 1996 to 1999, Grant practised as a corporate securities lawyer in the Vancouver office of a well-known national firm. In 1999, Grant was offered the opportunity to work with a premier global law firm in London England, as a corporate finance associate. In London, Grant worked on corporate finance transactions for some of the world’s largest companies. In 2002, Grant decided to return to British Columbia.

Clark Wilson LLP’s Corporate Finance/Securities Law Group assists companies listed on Canadian and U.S. stock exchanges and over-the-counter trading markets, including NASDAQ, Amex, TSX and the OTC Bulletin Board. Our attorneys are qualified to practice in various Canadian and United States jurisdictions. We are experienced in Canadian, United States and cross-border transactions; U.S. and Canadian regulatory filing and SEC registrations; reverse takeovers; and mergers and acquisitions.