The Canadian Securities Administrators ("CSA") published three coordinated blanket orders (the "Orders") effective as of April 17, 2025 that are designed to facilitate access to public markets and capital raising in Canada. The Orders form part of the CSA's ongoing efforts to promote the competitiveness of Canadian capital markets, streamline disclosure obligations and expand capital-raising flexibility for issuers, while preserving investor protection.
Key Highlights
1. Coordinated Blanket Order 41-930 – Exemptions from Certain Prospectus and Disclosure Requirements
Coordinated Blanket Order 41-930 provides relief from certain financial disclosure and procedural requirements in connection with prospectus offerings and prospectus-level disclosure filings in Canada. Below is a summary of the key changes:
- Third-Year Financial Statements: Issuers are now exempt from providing third-year historical financial and operating statements in long form prospectuses and material change reports or circulars which reference prospectus requirements, as applicable. This exemption recognizes that the cost of preparing a third year of statements may outweigh the statements' utility to investors, particularly for issuers with a limited operating history.
- Standard Term Sheets and Marketing Materials: Standard term sheets and marketing materials provided by an investment dealer or underwriter to potential investors during the waiting period between the issuance of a receipt in respect of a preliminary prospectus and a final prospectus may now include certain specified pricing and deal terms, provided this information is disclosed in a news release that is issued prior to delivery of such term sheets or marketing materials to potential investors. This means that an update to the size and pricing of a prospectus offering may be reflected in a standard term sheet or marketing materials without the need to file a corresponding amendment to the preliminary prospectus. This change is expected to improve deal certainty and marketing efficiency.
- Promoter Certificate Exemptions: Issuers are now exempt from including a promoter certificate in a prospectus where the promoter is an individual and has signed a certificate required by securities legislation in a capacity other than that of a promoter. For example, promoters are exempt from signing a standalone promoter's certificate in a prospectus if they have signed a separate certificate required by securities legislation as a director, CEO or CFO. In Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick and Nova Scotia, issuers are exempt from including a promoter certificate if the issuer has been a reporting issuer for at least 24 months, the promoter is not a director, officer or control person of the issuer, and the prospectus is not qualifying the distribution of an asset-backed security.
2. Coordinated Blanket Order 45-930 – Prospectus Exemption for New Reporting Issuers
Coordinated Blanket Order 45-930 introduces a new prospectus exemption for reporting issuers (not including investment funds) that have recently completed an underwritten initial public offering ("IPO"). Within 12 months after a receipt is issued for a final long form prospectus in respect of an underwritten IPO, reporting issuers can raise additional capital on a private placement basis up to the lesser of $100 million and 20% of the aggregate market value of their listed equity securities on the date the issuer issues a news release announcing the offering. Key conditions include, among others:
- securities must be of the same class as those issued under the IPO and priced no lower than the IPO price;
- reporting issuers must file an offering document and a corresponding news release on their website and on SEDAR+ before soliciting an offer to purchase;
- the offering document must include, among other things, details of the offering, disclosure of any material facts relating to the securities, a description of the reporting issuer's business objectives and the proposed use of proceeds; and
- the exemption is not available in certain circumstances, including in respect of restructuring transactions, significant acquisitions by venture issuers under Part 8 of National Instrument 51-102 – Continuous Disclosure, or transactions requiring shareholder approval.
The prospectus exemption is anticipated to provide reporting issuers that successfully complete an underwritten IPO with greater, more flexible and efficient capital raising opportunities.
3. Coordinated Blanket Order 45-933 – Exemption from the Investment Limit Under the Offering Memorandum Prospectus Exemption to Exclude Reinvestment Amounts
In Alberta, New Brunswick, Nova Scotia, Ontario, Québec and Saskatchewan, the offering memorandum prospectus exemption in National Instrument 45-106 – Prospectus Exemptions allows for an individual who is not an accredited investor to purchase up to $100,000 of securities from issuers within a 12-month period if the individual investor receives advice from a registered dealer or adviser regarding the investment(s). Coordinated Blanket Order 45-933 provides an exemption to this limit, such that a reinvestment of proceeds from the sale of securities in the same issuer does not count towards such investment limit, provided the individual investor receives advice from a registered dealer or adviser confirming the suitability of the reinvestment. In Ontario and Nova Scotia, an issuer using this exemption must provide written notice to the applicable securities regulator within 10 days of the distribution.
This change is in response to stakeholders' feedback and aims to support reinvestment in successful offerings, while maintaining key safeguards for investors.
Implications for Issuers and Market Participants
The Orders represent a step forward in reducing regulatory burden and enhancing capital-raising opportunities for issuers in Canadian capital markets. The Orders also reflect a broader shift towards a more responsive and tailored regulatory approach. The CSA have indicated that they are actively considering additional blanket orders in other areas where issuer burden can be reduced without impacting investor protection.
The Orders coincide with the CSA's announcement that they are pausing their work on the development of a new climate-related disclosure rule and amendments to existing diversity-related disclosure requirements, further reducing disclosure burdens on issuers. The CSA expect to revisit these proposed disclosure requirements in future years, having regard to domestic and international regulatory developments.
Market participants should review the full text of the Orders with their legal counsel to assess their applicability and ensure compliance with the associated conditions.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
