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Canadian securities regulators propose streamlined capital raising option for Canadian-listed issuers

  • Securities - CSA Image

Jul 28, 2021

On July 28, 2021, the Canadian Securities Administrators (CSA) proposed to introduce a new prospectus exemption for issuers listed on a Canadian stock exchange that is expected to provide a more efficient way for them to raise capital. Comments are requested by October 26, 2021.

The proposed Listed Issuer Financing Exemption is expected to reduce costs for issuers raising smaller amounts of capital through the public markets. It would also allow smaller issuers greater access to retail investors and provide retail investors with a broader choice of investments.

The prospectus exemption would not be available to issuers that have been a reporting issuer for less than 12 months, nor to issuers that have not filed all continuous disclosure documents required under Canadian securities legislation. Eligible issuers would file a short offering document and the securities they issue would be freely tradeable. Under the proposed exemption, issuers could raise up to the greater of $5 million or 10 per cent of the issuer’s market capitalization, to a maximum of $10 million, annually.

The proposed exemption is in response to comments received from CSA Consultation Paper 51-404 Considerations for Reducing Regulatory Burden for Non-Investment Fund Reporting Issuers. It also reflects research on capital raising requirements in other countries and other stakeholder feedback about the prospectus system.

Review the press release and CSA Notice.

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