October 29, 2010
Headnote National Policy 11-203 Process For Exemptive Relief Applications in Multiple Jurisdictions – relief from registration and prospectus requirements in connection with the use of electronic roadshow materials – cross-border offering of securities – conducting offer in typical U.S. manner leads to non-compliance with Canadian regime – relief granted from sections 25 and 53 of the Securities Act (Ontario) in connection with a cross-border offering – decision subject to conditions. Applicable Legislative Provisions
Securities Act, R.S.O. 1990, c.S.5, as am., ss. 25, 53 and 74. National Policy 47-201 Trading Securities Using the Internet and Other Electronic Means, s. 2.7.
IN THE MATTER OF
THE SECURITIES LEGISLATION
OF THE PROVINCE OF ONTARIO
(THE JURISDICTION)
AND
IN THE MATTER OF
THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS
AND
IN THE MATTER OF General Motors Company
(THE FILER)
DECISION
Background
The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) for a decision exempting the posting of certain roadshow materials on one or more commercial services such as www.retailroadshow.com and/or www.netroadshow.com during the “waiting period” from the prospectus requirement and the registration requirement under the Legislation (collectively, the Exemption Sought).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
(a) the Ontario Securities Commission (the Commission) is the principal regulator for this application; and
(b) the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (M1 11-102) is intended to be relied on in British Columbia, Alberta, Saskatchewan, Manitoba, Québec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, The Northwest Territories, Yukon and Nunavut (collectively, the Passport Jurisdictions and together with the Jurisdiction, the Canadian Jurisdictions)
Interpretation
Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning in this decision, unless otherwise defined.
Representations
This decision is based on the following facts represented by the Filer:
The Filer was incorporated under the laws of the State of Delaware on August 11, 2009.
The Filer’s principal office is located at 300 Renaissance Center, Detroit, Michigan, 48265-3000, United States of America.
The Filer is proposing an initial public offering of shares of its Series B preferred stock and a secondary offering of shares of its common stock (collectively, the Offered Shares) in Canada and the United States. It is anticipated that the proposed initial and secondary public offerings (the Offerings) will result in the common stock and Series B preferred stock of the Applicant being listed on the New York Stock Exchange and the common stock of the Applicant being listed on the Toronto Stock Exchange.
On August 18, 2010 the Filer filed a registration statement with the U.S. Securities and Exchange Commission (the SEC) in respect of the Offerings, and filed an amendment thereto on September 23, 2010, in order to register the Offered Shares under the U.S. Securities Act of 1933, as amended (the 1933 Act).
On August 18, 2010 the Filer filed preliminary MJDS prospectuses in each of the provinces and territories of Canada in respect of the Offerings.
On September 23, 2010 the Filer filed amended and restated preliminary MJDS prospectuses in each of the provinces and territories of Canada in respect of the Offerings.
On October 14, 2010 the Filer filed further amended and restated preliminary MJDS prospectuses in each of the provinces and territories of Canada in respect of the Offerings.
On October 25, 2010 the Filer filed further amended and restated preliminary MJDS prospectuses in each of the provinces and territories of Canada in respect of the Offerings.
The Filer also intends to file further amended and restated preliminary MJDS prospectuses in connection with the Offerings in Canada (the Further Amended Preliminary Prospectuses) and to commence the marketing of the Offerings in both Canada and the U.S. after a receipt is obtained evidencing receipt of the Further Amended Preliminary Prospectuses from the Commission under MI 11-102 filed after the date of this order.
The Filer intends to use electronic roadshow materials (the Website Materials) to promote the Offerings, as is now typical for initial public offerings in the United States.
Compliance with U.S. securities laws for typical initial public offerings (that is, offerings by an issuer not already subject to SEC reporting requirements), requires either making the Website Materials available in a manner that affords unrestricted access to the public, or filing the Website Materials on the SEC’s Electronic Data-Gathering Analysis and Retrieval System (known by its acronym, EDGAR), which will have the same effect of affording unrestricted access. We understand that, in practice, making documents “available without restriction” means that no restrictions on access or viewing may be imposed, both with respect to persons inside and outside of the United States.
The Filer and its underwriters wish to carry out the Offerings in a manner that is typical for public offerings in the United States by posting the Website Materials on an Internet-based commercial service such as www.retailroadshow.com or www.netroadshow.com, without password or other restriction.
Applicable securities laws in Canada do not permit the Website Materials to be made generally available to the public without restriction during the waiting period. Thus, absent relief, the Filer could not conduct the Offerings in the United States in the typical manner and comply with Canadian securities laws at the same time.
The Website Materials will contain a statement informing readers that the Website Materials do not contain all of the information in the Further Amended Preliminary Prospectuses, or any amendment thereto, or the final MJDS prospectuses (the Final Prospectuses), or any amendment thereto, and that prospective purchasers should review all of those documents, in addition to the Website Materials, for complete information regarding the Offered Shares.
The Filer will include a hyperlink in the Website Materials to the documents referred to in paragraph 14, if and when such documents are filed.
The Website Materials will be fair and balanced.
The Filer will state in the Website Materials, any amendment to the Further Amended Preliminary Prospectuses filed after the date of this order and in the Final Prospectuses that, in connection with the information contained in the Website Materials posted on one or more commercial sites, such as such as www.retailroadshow.com and/or www.netroadshow.com, purchasers of the Offered Shares in the Canadian Jurisdictions will have a contractual right against the Filer and the Canadian underwriters.
All information about the Filer’s securities will be contained in the Further Amended Preliminary Prospectuses and will be contained in the Final Prospectuses.
At least one underwriter signing the Further Amended Preliminary Prospectuses, and any amendments thereto, and the Final Prospectuses, and any amendments thereto, will be registered in each of the Canadian Jurisdictions
Canadian purchasers will only be able to purchase the Offered Shares through an underwriter that is registered in the respective Canadian Jurisdiction of residence of the Canadian purchaser, unless an applicable exemption from the registration requirements is available.
The Filer acknowledges that the Exemption Sought relates only to the posting of Website Materials on one or more commercial services, such as www.retailroadshow.com and/or www.netroadshow.com, and not in respect of the Further Amended Preliminary Prospectuses and the Final Prospectuses.
The Filer is not in default of securities legislation.
Decision
The principal regulator is satisfied that the decision meets the test set out in the Legislation of the principal regulator to make the decision.
The decision of the principal regulator under the Legislation is that the Exemption Sought is granted provided that:
- Each amendment to the amended and restated preliminary MJDS prospectuses after the date of this order, the Final Prospectuses, and any amendment thereto, state that purchasers of shares of common stock or Series B preferred stock, as applicable, in each of the provinces and territories of Canada have a contractual right of action against the Filer and the Canadian underwriters substantially in the following form:
We may make available certain materials describing the offering (the Website Materials) on the website of one or more commercial services such as www.retailroadshow.com or www.netroadshow.com under the heading “General Motors Company” during the period prior to obtaining a final receipt for the final MJDS prospectus relating to this offering (the “Final Prospectus”) from the securities regulatory authorities in each of the provinces and territories of Canada. In order to give purchasers in each of the provinces and territories of Canada the same unrestricted access to the Website Materials as provided to U.S. purchasers, we have applied for and obtained exemptive relief from the securities regulatory authority in each of the provinces and territories of Canada. Pursuant to the terms of that exemptive relief, we and each of the Canadian underwriters signing the certificate contained in the Final Prospectus have agreed that, in the event that the Website Materials contained any untrue statement of a material fact or omitted to state a material fact required to be stated or necessary in order to make any statement therein not misleading in the light of the circumstances in which it was made (a “misrepresentation”), a purchaser resident in a province or territory of Canada who purchases the shares offered hereby pursuant to the Final Prospectus during the period of distribution shall have, without regard to whether the purchaser relied on the misrepresentation, rights against us and each Canadian underwriter with respect to such misrepresentation as are equivalent to the rights under section 130 of the Securities Act (Ontario) or the comparable provision of the securities legislation of the particular province or territory where that purchaser is resident, as the case may be, subject to the defences, limitations and other terms thereof, as if such misrepresentation were contained in the Final Prospectus.
- The Website Materials will not include comparables unless the comparables are also included in the Further Amended Preliminary Prospectuses, including any amendments to it, that is filed prior to the Website Materials being made available.
“Mary G. Condon”
“Paulette L. Kennedy”
Mary G. Condon
Commissioner
Ontario Securities Commission
Paulette L. Kennedy
Commissioner
Ontario Securities Commission