For Immediate ReleaseSeptember 24, 2015
Vancouver – The Canadian Securities Administrators (CSA) today 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.
“Rights offerings can be a very effective way for issuers to raise capital while providing existing security holders with an opportunity to protect themselves from dilution,” said Louis Morisset, CSA Chair and President and CEO the Autorité des marchés financiers. “This streamlined exemption is designed to make prospectus-exempt rights offerings more attractive to reporting issuers while maintaining investor protection.”
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.
Other key elements of the exemption include:
The amendments also remove the ability of non-reporting issuers to use the rights offering exemption, and update other elements of the rights offering regime.
Provided all necessary Ministerial approvals are obtained, the amendments will come into force on December 8, 2015. A copy of the amendments can be found on CSA members’ websites.
The CSA, the council of the securities regulators of Canada’s provinces and territories, coordinates and harmonizes regulation for the Canadian capital markets.
Richard Gilhooley British Columbia Securities Commission 604-899-6713
Mark Dickey Alberta Securities Commission 403-297-4481
Carolyn Shaw-Rimmington Ontario Securities Commission 416-593-2361
Sylvain Théberge Autorité des marchés financiers 514-940-2176
Kevan Hannah Manitoba Securities Commission 204-945-1513
Andrew Nicholson Financial and Consumer Services Commission, New Brunswick 506-658-3021
Tanya Wiltshire Nova Scotia Securities Commission 902-424-8586
Janice Callbeck Office of the Superintendent of Securities, P.E.I. 902-368-6288
Don Boyles Office of the Superintendent of SecuritiesNewfoundland and Labrador 709-729-4501
Rhonda Horte Office of the Yukon Superintendentof Securities 867-667-5466
Shamus Armstrong Nunavut Securities Office 867-975-6587
Tom Hall Northwest Territories Securities Office 867-873-7490
Noel Busse Financial and Consumer Affairs Authority of Saskatchewan 306-798-4160
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