19 May 1994 External T.I. 9412205 - GRANDFATHERING CCA RE CERTIFIED PRODUCTION

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

			  Cal Brown
XXXXXXXXXX		  941220

Attention: XXXXXXXXXX

May 19, 1994

Dear Sirs:

Re: Grandfathering "XXXXXXXXXX" Certified Production

This is in reply to your letter of May 2, 1994 and further to our letter of April 19, 1994 concerning the grandfathering of XXXXXXXXXX.

We wish to make it clear that the material submitted with your original letter did not, in our view constitute a preliminary prospectus, and that the additional material submitted in the current letter does not change that view. Consequently, it is our view that XXXXXXXXXX is not grandfathered.

We also wish to point out that even if it could be established through additional facts and documents that a preliminary prospectus did exist as of 1988, this would not determine whether XXXXXXXXXX is grandfathered. We would also have to be convinced that XXXXXXXXXX was being marketed under that particular prospectus since there is a requirement in the law that the production be acquired pursuant to the prospectus. Notwithstanding that the offering amount might be similar, it seems unlikely that XXXXXXXXXX could be marketed today under a 1988 prospectus which could not reflect the significant changes since that time in interest rate, in the rates of return investors can expect and no doubt in a host of other items affecting the costs and financing of the production.

We regret these comments could not be more favourable.

Yours truly,

for Director
Manufacturing Industries,
Partnerships and Trusts Division
Rulings Directorate
Legislative and Intergovernmental
Affairs Branch