Overview

On November 27, 2014, the Canadian Securities Administrators (CSA) issued for public comment pro­posed Amend­ments to NI 45-106, Prospec­tus and Reg­is­tra­tion Ex­emp­tions (and certain other National Instruments) that would create a stream-lined prospectus exemption for rights offerings by reporting issuers. Although rights offerings can be one of the fairest ways for issuers to raise capital, in that they allow all existing investors to participate on a pro rata basis, they are seldom used because of the time and costs associated with them.

One of the key proposals is to remove the current regulatory review process prior to use of the rights offering circular. The CSA anticipates this will significantly decrease the amount of time it takes to conduct an offering. The CSA also proposes increased investor protection through the addition of civil liability for secondary market disclosure, and the introduction of a more user-friendly form of rights offering circular document.

The proposed amendments would also update other rights offering requirements and repeal the prospectus exemption for rights offerings by non-reporting issuers.

Recent activities

September 2015

On September 24, 2015, the 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.

November 2014

On No­vem­ber 27, 2014, the CSA is­sued for pub­lic com­ment pro­posed Amend­ments to NI 45-106, Prospec­tus and Reg­is­tra­tion Ex­emp­tions, and cer­tain other NIs that would cre­ate a stream­lined prospec­tus ex­emp­tion for rights of­fer­ings by re­port­ing is­suers.