On June 8, 2017, the Canadian Securities Administrators (“CSA”) published for a 90-day comment period (ending on September 6, 2017), proposed amendments (the “Proposed Amendments”) to National Instrument 45-106 Prospectus Exemptions (“NI 45-106”) that would amend the report of exempt distribution (the “Report”) set out on Form 45-106F1 Report of Exemption Distribution that must be filed following a distribution of securities in reliance on certain prospectus exemptions under NI 45-106. The current version of the Report came into effect on June 30, 2016 and requires filers to provide substantially more information than … Continue Reading
The Canadian Securities Administrators (CSA) issued CSA Staff Notice 33-319 (the Notice) to provide an update on the “Best Interest Standard” and “Targeted Reforms” proposed last year in an important CSA Consultation Paper that we discussed in a previous post.
Most regulators have decided to abandon the Best Interest Standard which would have introduced a “client best interest” standard against which all registrant-client obligations would be interpreted.
The CSA will still proceed with a refined set of Targeted Reforms. Even in the absence of a Best Interest Standard in most jurisdictions, the Targeted Reforms would nonetheless … Continue Reading
On September 22, 2016, the Canadian Securities Administrators (the “CSA”) published CSA Notice and Request for Comment – Modernization of Investment Fund Product Regulation – Alternative Funds (the “Proposed Amendments”). The Proposed Amendments represent the final phase of the CSA’s ongoing policy work to modernize investment fund product regulation in Canada (the “Modernization Project”). While primarily aimed at the development of a more comprehensive regulatory framework for commodity pool mutual funds that are currently governed by National Instrument 81-104 – Commodity Pools (“NI 81-104”), if adopted, the Proposed Amendments will also have a meaningful impact on other types of mutual … Continue Reading
In August 2016, the Canadian Securities Administrators (“CSA”) published for comment Proposed Amendments to National Instrument 24-101 (“NI 24-101”) – Institutional Trade Matching and Settlement, Proposed Changes to Companion Policy 24-101 (“CP 24-101”) – Institutional Trade Matching and Settlement and CSA Consultation Paper 24-402 – Policy Considerations for Enhancing Settlement Discipline in a T+2 Settlement Cycle Environment (the “Consultation Paper”).
The proposed amendments to NI 24-101 and CP 24-101 (the “Proposed Amendments”) are intended to assist in a successful migration to T+2 settlement from the current T+3 regime. The … Continue Reading
Les Autorités canadiennes en valeurs mobilières (les ACVM) ont publié un important document de consultation dans lequel il est proposé de rehausser considérablement les obligations de tous les conseillers, courtiers et représentants, y compris les membres de l’OCRCVM et de l’ACFM (les personnes inscrites). Les commentaires sur ce document de consultation peuvent être présentés jusqu’au 26 août.… Continue Reading
Des modifications importantes au régime de déclaration du système d’alerte canadien entrent aujourd’hui en vigueur (se reporter à notre article publié le 3 mars 2016 qui s’intitule Les règles du système d’alerte du Canada se resserrent en mai). Nous mettons ici l’accent sur les exigences nouvelles et plus rigoureuses liées à la description de l’objectif de l’acquisition.… Continue Reading
Recently, the Canadian Securities Administrators (CSA) released an important Consultation Paper that proposes to significantly increase the obligations of all advisers, dealers and representatives, including IIROC and MFDA members (Registrants). Comments on the Consultation Paper can be made until August 26.
The CSA is proposing two distinct categories of changes that, if adopted, will significantly impact the economics of existing Registrant business models and Registrant compliance costs:
1. Best Interest Standard: A “client best interest” standard against which all Registrant-client obligations would be interpreted.
2. “Targeted Reforms”: A comprehensive set of so-called “targeted reforms” will affect … Continue Reading
Effective today, significant amendments to the Canadian early warning reporting (EWR) regime (EWR Amendments) come into force (see our March 3, 2016 publication, Canada’s Early Warning Rules Get Tougher in May). Here we focus on the new, more stringent requirements to describe the purpose of acquisitions.
The new EWR Amendments require the filer to describe any plans or future intentions it might have with respect to 11 specific potential corporate actions:
- the acquisition of additional securities of the reporting issuer, or the disposition of securities of the reporting issuer;
- a corporate transaction, such as a merger, reorganization or liquidation,
The Canadian Securities Administrators (CSA) are proposing to introduce a mandatory standardized risk classification methodology for mutual funds and ETFs (the Proposed Methodology). Fund managers would be required to use the Proposed Methodology to determine the investment risk level of conventional mutual funds (which must be disclosed in the Fund Facts document) and exchange-traded mutual funds (ETFs) (to be disclosed in the proposed ETF Facts document). Currently, fund managers may determine the risk level of a mutual fund using a methodology of their choosing, though the methodology developed by the Investment Funds Institute of … Continue Reading
The OSC is close to adopting a proposed final version of its previously-announced whistleblowing policy (the Program). The Program would award eligible whistleblowers up to $5 million for reporting serious securities- or derivatives-related misconduct that leads to significant enforcement or settlement outcomes.
We summarized the original OSC consultation paper in a previous article. The OSC received comments on the consultation paper and also hosted a stakeholder roundtable on the proposals. Reporting issuers will want to re-examine their internal compliance and reporting systems, codes of conduct and employment agreements in light of the proposed program. Key features are summarized … Continue Reading
On October 29, the securities regulatory authorities in Alberta, New Brunswick, Nova Scotia, Ontario, Québec and Saskatchewan (collectively, the “Participating Jurisdictions”) published Multilateral CSA Notice of Amendments to National Instrument 45-106 Prospectus Exemptions Relating to the Offering Memorandum Exemption (the “OM Exemption”) to make the offering memorandum exemption, found in section 2.9 of National Instrument 45-106 available in all jurisdictions of Canada.
The OM Exemption allows an issuer to offer securities to certain categories of investors without the requirement of a prospectus. The investments permitted under this exemption, in the Participating Jurisdictions where it is already … Continue Reading
Effective September 8, 2015, certain private placements of non-Canadian securities made to Canadian institutional investors that qualify as “permitted clients” will no longer require a “Canadian wrapper”.
Key conditions to new rules
The new rules require that certain conditions be satisfied:
- the offering must be conducted primarily in a non-Canadian jurisdiction;
- a concurrent distribution of the securities must be made by the issuer to investors in the U.S.;
- the securities must either be
- issued by a non-Canadian issuer that is not a reporting issuer in Canada and has its head office outside Canada and a majority of its executive officers
The Canadian Securities Administrators (CSA) published on April 9, 2015, in final form, amendments to the continuous disclosure and governance obligations of venture issuers (the Amendments). The objective of the Amendments is to streamline and tailor disclosure by venture issuers. In Canada, venture issuers are generally junior public companies whose shares are listed on the TSX Venture Exchange (TSX-V) or the Canadian Stock Exchange (CSE). Provided all necessary ministerial approvals are obtained, the amendments will come into force on June 30, 2015.
The Amendments will affect the continuous disclosure and governance obligations contained in National Instrument 51-102 – Continuous … Continue Reading
Under Multilateral Instrument 51-105 – Issuers Quoted in the U.S. Over-the-Counter Markets, a foreign issuer which undertakes promotional activities in Canada without being listed or quoted on a designated exchange runs the risk of being deemed a reporting issuer in Canada, and therefore subject to extensive Canadian continuous disclosure requirements, if the issuer’s equity securities trade over the counter (OTC) in the United States. As a result, some dealers undertaking private placement offerings of foreign securities in Canada have been limiting Canadian selling efforts to Ontario (which did not adopt MI 51-105), Quebec (which issued a blanket order in … Continue Reading
Effective April 6, the OSC is implementing amendments to OSC Rule 13-502 – Fees (the “New Rule”). While largely consistent with the basic framework under the previous version of the fee rule (the “Old Rule”), the New Rule changes the basis for the calculation of participation fees by removing the use of a “reference fiscal year”, introduces nominal increases to certain activity fees, and introduces new management certification requirements for participation fee forms.
The two main types of fees charged under the Old Rule are participation fees and activity fees. Participation fees are set … Continue Reading
CDS Clearing and Depository Services Inc. (“CDS”) published last November proposed amendments to the fees it charges securities issuers for certain services. The new fee regime, which is subject to regulatory approval, is expected to come into effect on April 1, 2015.
CDS services include the issuance of international security identification numbers (“ISINs”), depository eligibility, securities registration-related services and entitlement and corporate action (“E&CA”) event management. CDS currently charges a fee for ISIN issuance, eligibility and registration-related services, but does not charge a fee for E&CA event management.
CDS is proposing the following fee changes:
- Introduce E&CA event management fees
Effective February 1, 2015, the TSX will only accept Personal Information Forms (PIFs) and Declarations that use a new form of RCMP “Exhibit 1”. The new form of Exhibit will be known as the Security Screening Check and will replace the current Release and Discharge Relating to Consent and Disclosure of Criminal Record Information.
The new Exhibit 1 has new and revised sections (Third Party Disclosure and Release Discharge and Consent), as well as additional fields for:
- Email address and telephone number;
- Country of birth;
- Residential addresses for the past 5 years; and
- Driver’s license number
On November 27, 2014, the Canadian Securities Administrators (CSA) published proposed amendments to the rights offering regime that aim to make rights offerings more expedient and less costly by creating a streamlined prospectus exemption for reporting issuers (Proposed Exemption). The proposed amendments also aim to increase investor protection with the addition of civil liability for secondary market disclosure and the introduction of a more user-friendly form of rights offering circular document. Finally, the proposed amendments would also update requirements for prospectus-based rights offerings and would repeal the prospectus exemption for rights offerings by non-reporting issuers. This article highlights several of … Continue Reading
Under Multilateral Instrument 51-105 – Issuers Quoted in the U.S. Over-the-Counter Markets, a foreign issuer which undertakes promotional activities in Canada without being listed or quoted on a designated exchange runs the risk of being deemed a reporting issuer in Canada, and therefore subject to extensive Canadian continuous disclosure requirements, if the issuer’s equity securities trade over the counter (OTC) in the United States. As a result, some dealers undertaking private placement offerings of foreign securities in Canada have been limiting Canadian selling efforts to Ontario (which did not adopt MI 51-105) and Quebec (which issued a blanket order … Continue Reading
Le 15 octobre 2014, les Autorités canadiennes en valeurs mobilières (ACVM) ont publié la version définitive des modifications relatives aux règles d’information sur la gouvernance énoncées dans le Règlement 58-101 sur l’information concernant les pratiques en matière de gouvernance (modifications), lesquelles exigeront que les sociétés ouvertes qui sont des émetteurs assujettis au Manitoba, au Nouveau-Brunswick, en Nouvelle-Écosse, au Nunavut, en Ontario, au Québec, en Saskatchewan, à Terre-Neuve-et-Labrador et dans les Territoires du Nord-Ouest fournissent, dans leurs circulaires de sollicitation de procurations par la direction (ou, en l’absence d’envoi de circulaires aux porteurs de titres, dans leurs notices annuelles), de l’information … Continue Reading
The Canadian Securities Administrators (CSA) published October 15, 2014 in final form amendments to the governance disclosure rules contained in National Instrument 58-101 – Disclosure of Corporate Governance Practices(Amendments) that will require public companies which are reporting issuers in Manitoba, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Ontario, Quebec and Saskatchewan to provide disclosure in their management proxy circulars (or in their Annual Information Form, if no circular is sent to their securityholders) regarding the representation of women on their boards and in executive officer positions. The Amendments do not apply to issuers listed on the … Continue Reading
The following article may be of interest to readers of this blog: Toronto Stock Exchange Makes Majority Voting Mandatory
The Toronto Stock Exchange (TSX) announced on February 13, 2014, amendments (Amendments) to the TSX Company Manual (Manual) mandating majority voting. From June 30, 2014 (Effective Date), the Amendments will require each director of a TSX-listed issuer, other than directors of a majority-controlled listed issuer, to be elected by a majority of the votes cast at any shareholders’ meeting other than a contested meeting. Read More.
Canadian securities regulators are moving forward with several rule changes (new MI 45-107 and amendments to NI 33-105) that will facilitate private placement offerings of foreign securities to Canadian institutional investors that qualify as “Canadian permitted clients”. The cumulative effect of the rule changes will be to eliminate the need to prepare a “wrapper document” providing Canada-specific disclosures to supplement the foreign offering document. These rule changes, together with the proposed amendments to OSC Rule 45-501 which were published for comment earlier this year, will make generally available by legislation that will operate across Canada relief that has been … Continue Reading
Our recent investment fund post was quoted by the Financial Post (Legal Post section) on April 30, 2013.
The Financial Post piece is available here.