78(1)No person shall continue a distribution of a security to which subsection 71(1) applies after the lapse date prescribed by regulation unless the distribution is in accordance with the regulations.

78(2)If a distribution to which subsection (1) applies is not in accordance with the regulations, all trades completed after the lapse date prescribed by regulation may be cancelled at the option of the purchaser in accordance with the regulations.

78(1)In this section, “lapse date”, where used in relation to a security that is being distributed under subsection 71(1) or this section, means the date that is 12 months after the date of the most recent prospectus relating to the security.

78(2)Subject to subsection (3), no person shall continue a distribution of a security after the lapse date, unless a new prospectus that complies with this Part and the regulations is filed under subsection 71(1) with the Executive Director in relation to the security and a receipt for the new prospectus is issued by the Executive Director.

78(3)A distribution of a security may, subject to terms and conditions prescribed by regulation, be continued for 12 months after a lapse date.

78(4)A purchaser of securities may, in the circumstances prescribed by regulation, cancel a trade made in reliance on subsection (3).

78(5)On the application of an interested person or on the Commission’s own motion, the Commission may extend, subject to such terms and conditions as it considers appropriate, the period within which a distribution may be continued after the lapse date.

78(6)Notwithstanding subsection 71(1), a person may file a new prospectus in accordance with subsection (2) with the Executive Director without having filed a preliminary prospectus and obtaining a receipt for the preliminary prospectus.