Limits on Underwriters’ Options an Over-Allotment Options on Bought Deals

The Canadian Securities Administrators issued a notice on April 21, 2006 setting out their view that underwriters are limited in their ability to "pre-market" securities that are subject to an underwriters’ option or an over-allotment on a bought deal. Certain securities commissions had made comments consistent with this notice in response to prospectus filings.

Under National Instrument 44-101, underwriters may solicit expressions of interest, or "premarket" the offering, prior to the filing of a preliminary short form prospectus if the issuer has entered into an enforceable agreement with underwriters, a news release is issued immediately, and a preliminary short-form prospectus is required to be filed within four business days after the date of the agreement.