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Canadian Securities Regulators finalize significant changes to the rights offering regime

  • Securities - CSA Image

Sep 24, 2015

On September 24, 2015, the Canadian Securities Administrators (CSA) announced the final implementation of a streamlined prospectus exemption for rights offerings by reporting issuers. The amendments to the rights offering regime are intended to address concerns expressed to the CSA by certain market participants that issuers seldom use the prospectus-exempt rights offering to raise capital because of the associated time and cost.

The amendments create a prospectus exemption that is available only to reporting issuers, but not investment funds subject to National Instrument 81-102 Investment Funds. The exemption removes the current requirement for a regulatory review prior to using the rights offering circular while replacing it with alternative investor protections including the addition of statutory secondary market civil liability. This change means that investors under the rights offering will have a right of action if there is a misrepresentation in the rights offering circular or other part of the issuer’s continuous disclosure record.

Review the press release on the CSA's Web Site.

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