Headnote National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions - compliance with new marketing amendments - application for relief from the requirement in section 74 of the Act that the prospectus requirements and from the requirement in subsection 65(2) of the Act with respect to communications during the waiting period in connection with the use of certain road show materials by the issuer during the “waiting period” in a U.S. cross-border offering - NI 41-101 does not apply to NI 71-101.
Applicable Legislative Provisions
Securities Act, R.S.O. 1990, c.S.5, as am., ss. 74(1)2, 53, 65(2). National Instrument 71-101 The Multijurisdictional Disclosure System, s. 11.3.
January 14, 2014
In the Matter of
the Securities Legislation of
British Columbia, Alberta, Saskatchewan,
Manitoba, Ontario, Newfoundland and Labrador,
New Brunswick, Nova Scotia and Prince Edward Island (the “Jurisdictions”)
and
In the Matter of
the Process for Exemptive
Relief Applications in Multiple Jurisdictions
and
In the Matter of
CatchMark Timber Trust, Inc. (the “Filer”)
DECISION
Background
The securities regulatory authority or regulator in each of the Jurisdictions (the “Decision Maker”) has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the “Legislation”) for a decision pursuant to paragraph 74(1)2 of the Securities Act (Ontario) (the “Act”) exempting the Filer from the prospectus requirement in section 53 of the Act and from the requirement in subsection 65(2) of the Act with respect to communications during the waiting period (as defined in subsection 65(1) of the Act) in connection with the use of certain road show materials by the Filer during the waiting period (the “Requested Relief”).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
(a) the Ontario Securities Commission is the principal regulator for this application, and
(b) the decision is the decision of the principal regulator and evidences the decision of each other Decision Maker.
Interpretation
Terms defined in National Instrument 14-101 Definitions and MI 11-102 Passport System have the same meaning if used 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 Maryland under the name Wells Real Estate Investment Trust IV, Inc. On October 31, 2005, the Filer changed its name to Wells Timber Real Estate Investment Trust, Inc., on November 16, 2006, the Filer changed its name to Wells Timberland REIT, Inc., and on September 18, 2013, the Filer changed its name to CatchMark Timber Trust, Inc.
The principal office of the Filer is located at 6200 The Corners Parkway, Norcross, Georgia 30092.
On September 23, 2013, the Filer filed a registration statement on Form S-11 with the U.S. Securities and Exchange Commission (“SEC”), which was amended on October 22, 2013, October 30, 2013, November 22, 2013 and November 26, 2013 under the U.S. Securities Act of 1933, as amended (such registration statement, as amended, the “Registration Statement”). The Registration Statement contains a prospectus relating to an offering of shares of the Filer’s Class A common stock. The SEC declared the Registration Statement effective on December 11, 2013 and the final prospectus was filed with the SEC on December 12, 2013.
On November 18, 2013, the Filer filed a preliminary MJDS prospectus (the “Canadian Preliminary MJDS Prospectus”) pursuant to National Instrument 71-101 The Multijurisdictional Disclosure System (“NI 71-101”), which was amended and restated on November 25, 2013 (the “Canadian First Amended and Restated MJDS Prospectus”) and further amended and restated on November 26, 2013 (the “Canadian Second Amended and Restated MJDS Prospectus”, and the Canadian Preliminary MJDS Prospectus, the Canadian First Amended and Restated MJDS Prospectus and the Canadian Second Amended and Restated MJDS Prospectus collectively referred to as a “Canadian Preliminary Prospectus”), relating to an offering (the “Offering”) of shares of the Filer’s Class A common stock in each of the provinces of Canada except Quebec prepared for an offering under Rule 430A of the U.S. Securities Act of 1933, as amended. The Filer filed a final MJDS prospectus dated December 11, 2013 (the “Canadian Prospectus”) and a MJDS pricing prospectus dated December 12, 2013 (the “Canadian 430A Pricing Prospectus”). Each Canadian Preliminary Prospectus, the Canadian Prospectus, the Canadian 430A Pricing Prospectus, and any amendment or supplement thereto, are collectively referred to as the “Canadian MJDS Prospectuses”.
Section 53 of the Act states that no person or company shall trade in a security unless a preliminary prospectus and a prospectus have been filed and receipts have been issued, and subsection 65(2) of the Act limits the distribution of materials during the waiting period.
During the waiting period, the Filer utilized certain road show (as defined in National Instrument 41-101 General Prospectus Requirements (“NI 41-101”)) materials (the “Road Show Materials”) as part of the marketing of the Offering in Canada and made the Road Show Materials available on www.netroadshow.com. The Road Show Materials posted to the website are controlled by password protection as suggested by National Policy 47-201 Trading Securities Using the Internet and Other Electronic Means and contain a statement that information conveyed in the Road Show Materials does not contain all of the information in the prospectus, which should be reviewed for complete information.
Part 13 of NI 41-101 sets out the requirements with respect to advertising and marketing activities in Canada, and in particular section 13.12 of such Part, provides an exemption for issuers in certain U.S. cross-border prospectus offerings from the requirements to file marketing materials on SEDAR and the requirement to include, or incorporate by reference, the marketing materials in a final prospectus. However, section 11.3 of NI 71-101 states that NI 41-101 does not apply to MJDS prospectus offerings.
If Part 13 of NI 41-101 and in particular section 13.12 of such Part applied to the Offering, the Filer would meet the requirements of such section on the basis that:
(a) The securities offered under the U.S. cross border-offering were sold primarily in the United States. The underwriter who signed the Canadian MJDS Prospectuses has advised that approximately 6% of the Offering was sold in Canada.
(b) The Filer and the underwriter who signed the Canadian MJDS Prospectuses have provided a contractual right of action to investors containing the language set out in subsection 36A.1(5) of Form 41-101F1 Information Required in a Prospectus, or words to the same effect.
(c) A copy of the Road Show Materials relating to the road shows in Canada was delivered to the securities regulators.
(d) All marketing materials provided to investors in Canada were provided in connection with the road show.
The underwriter who signed the Canadian MJDS Prospectuses is registered in each of the Jurisdictions.
Canadian purchasers were only able to purchase shares of common stock of the Filer through an underwriter that is registered in the Jurisdiction of residence of the purchaser.
Decision
The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.
“Wesley Scott” “Vern Krishna”
Commissioner Commissioner
Ontario Securities Commission Ontario Securities Commission