Regulatory Reforms: What 2025 Changed For Canadian Capital Markets

1. CSA 2025–2028 business plan: What should Canadian capital markets expect?

On June 26, 2025, the CSA published its 2025-2028 CSA Business Plan (the "Plan") setting out its priorities that will guide securities regulation across Canada over the next three years. The Plan focuses on simplifying capital-raising rules, supporting innovation and emerging technologies, and strengthening investor protection. It aims to enhance Canada's global capital market competitiveness while safeguarding market integrity through the following four strategic goals.

How will the Plan affect capital-raising in Canadian markets?

To support the capital-raising needs of Canadian companies and establish internationally competitive Canadian capital markets, the Plan introduces a series of initiatives that reduce regulatory complexity.

Some of these initiatives include:

• eliminating third year financial statement requirements for nonventure issuers;
• facilitating the use of term sheets and marketing materials without requiring the filing of an amended preliminary prospectus;
• proposing rule amendments for the listed issuer financing exemption;
• modernizing standards of disclosure for mineral projects; and
• developing a proposal for semi-annual reporting requirements rather than quarterly for certain reporting issuers.

The Plan also seeks to facilitate the use of cryptocurrency with proposals to review and update the regulatory framework for crypto asset investment funds and to introduce a hybrid regulatory framework for value-referenced crypto assets. The CSA considers these initiatives to be an important step in ensuring the regulatory framework for capital markets keeps pace with market advancements.

What is the CSA doing to strengthen investor protection and confidence?

The Plan aims to strengthen investor education, protection, and confidence through initiatives that promote fair, resilient, and trustworthy capital markets in Canada.

For example: the CSA is developing solutions to combat online fraud targeting Canadian investors and to bolster the detection and prosecution of abusive market activity and misleading promotional content.

The CSA also proposes collaboration with federal law enforcement agencies. Emphasis is made on:

• enhancing the protection of older and vulnerable investors; and
• developing collaborative and strategic investor education programs.
• Additionally, the CSA aims to strengthen the enforcement powers of the Ombudsman for Banking Services and Investments for investment-related disputes.

How will the CSA address innovation and emerging technologies?

As emerging technologies reshape capital markets, the CSA aims to ensure that Canada's regulatory framework remains adaptive and responsive to modern market innovations. The Plan introduces a series of initiatives designed to help businesses leverage new technologies while providing guidance and protecting investors. Key priorities include building regulatory capacity for emerging digital business models, investigating the appropriate regulatory responses to the use of artificial intelligence in capital markets, and implementing a group testing environment for individual firms to test new technologies and innovative business models. In addition, the CSA proposes a review of current data-gathering practices for investment funds to develop a comprehensive data collection framework for publicly and privately offered products.

What steps is the CSA taking to monitor systemic risk?

The CSA is also prioritizing efforts to strengthen its ability to identify and respond to systemic risks impacting financial markets and the economy. Central to this approach is the use of advanced data analytics to research key market vulnerabilities and support for annual reporting. The Plan also provides for enhanced collaboration with other government agencies to facilitate data sharing and coordinated analysis.

Other priority areas include reviewing the liquidity risk management framework for investment funds, the regulatory frameworks for exchange traded funds and derivative trading facilities, and the sufficiency of cybersecurity risk management requirements.

Collectively, the Plan outlines key organizational objectives, such as regulatory simplification, investor protection, and market integrity and competitiveness. These priorities are expected to drive significant regulatory developments in Canadian capital markets over the next three years.

2. Introduction of permanent WKSI regime streamlines capital raising for Canada's largest issuers

How is capital raising in Canada changed by the new permanent WKSI regime?

On November 28, 2025, the CSA finalized long-awaited amendments to National Instrument 44-102 - Shelf Distributions ("NI 44-102") and related companion policies (together with NI 44-102, the "WKSI Amendments") establishing a permanent expedited shelf-prospectus regime for Well-Known Seasoned Issuers ("WKSI"). The new framework replaces the temporary blanket orders introduced in 2021 (the "WKSI Blanket Orders"), which served as a pilot program allowing large, established issuers to file base shelf prospectuses without prior regulatory review, and is intended to further streamline capital raising for issuers with strong disclosure track records.

How closely does the Canadian WKSI regime track U.S. practice?

By preserving an expedited filing model for seasoned issuers and reducing duplicative regulatory steps, the WKSI Amendments remove unnecessary hurdles for Canadian public companies that access the capital markets frequently. The changes also better align Canada's capital-raising framework with U.S. WKSI practices, thereby facilitating smoother cross-border financings and more efficient access to both Canadian and U.S. investors.

What features of the temporary WKSI pilot remain unchanged?

The permanent regime preserves the core features of the WKSI Blanket Orders. A WKSI may file a final base shelf prospectus without first filing a preliminary prospectus or undergoing regulatory review. WKSIs may also continue to omit certain information from their base shelf prospectus, including the total dollar amount, number of securities to be offered, the plan of distribution, a detailed description of the securities, and selling securityholder details, provided these are disclosed in a subsequent shelf supplement. The eligibility thresholds remain the same, requiring either at least $500 million in public equity or $1 billion in public debt outstanding.

What are the key new elements in the permanent WKSI framework?

While the foundational elements of the expedited process remain, the WKSI Amendments introduce several important refinements:

• A receipt is now automatically deemed issued upon filing, rather than being issued by the principal regulator (as under the WKSI Blanket Orders).
• The validity period of a WKSI base shelf prospectus has been extended from 25 to 37 months, reducing renewal frequency and associated costs.
• Issuers must still have been a reporting issuer for at least 12 months, but eligibility has been broadened to include successor issuers, credit support issuers, and issuers of asset-backed securities.

Additionally, new compliance safeguards have been added:

• Issuers are ineligible if, in the past three years, a securities regulator has refused to issue a receipt for a prospectus, or if they have been subject to certain enforcement proceedings or convictions for marketrelated offences.
• WKSIs must also confirm their eligibility annually in their annual information form or through an amendment to their base shelf prospectus.

3. CSA proposes harmonized self-certified investor prospectus exemption

What is the proposed self certified investor exemption? On September 25, 2025, the CSA launched a consultation on Proposed Multilateral Instrument 45-111 - Self-Certified Investor Prospectus Exemption ("MI 45-111"). The exemption provides for distributions to purchasers who can certify their financial and investment education and experience but may not meet the accredited investor criteria.

Why is the CSA proposing a harmonized regime?

Building on successful pilot programs in Alberta, Saskatchewan, Manitoba, and Ontario, the CSA aims to create a single exemption across 11 jurisdictions, harmonizing similar provincial exemptions and broadening access to Canada's exempt market. The objective is simple: to strike an appropriate balance between investor protection and flexibility for businesses raising early-stage capital.

Who can qualify as a self‑certified investor and on what terms?

Investors must certify that they meet at least one of the qualifying criteria of MI 45-111 and acknowledge investment risks. Criteria include:

• professional designations (e.g., Chartered Financial Analyst, Chartered Professional Accountant, Chartered Investment Manager, Chartered Business Valuator, etc.);
• advanced finance degrees;
• relevant industry experience; or
• securities exams, or operational experience in venture capital or private equity.

Each investor may invest up to $50,000 annually across multiple issuers. The proposal requires completion of Form 45-111F2 - Acknowledgement of Risks and permits investments through special purpose vehicles, provided all owners are accredited or self-certified investors. Issuers must file a report of exempt distribution within 30 days of closing.

What changes are expected if MI 45-111 is adopted?

If adopted, the instrument will replace existing local orders and amend National Instrument 45-106 - Prospectus Exemptions to include self-certified investors under the private issuer exemption. Issuers will gain a cost-effective alternative to the offering memorandum exemption, while investors access new opportunities aligned with their expertise. Further, intermediaries may see increased deal flow but will need to adjust compliance processes.

The CSA accepted comments on the proposal until January 5, 2026. The key issue is whether the $50,000 investment limit, qualifying criteria, and risk disclosure requirements strike the right balance between access and protection. In the interim, the Ontario Securities Commission has implemented Ontario Instrument 45-510 - Self-Certified Investor Prospectus Exemption (Interim Class Order), superseding Ontario's previous instrument serving the same purposes and containing the same exemptions as the proposed MI 45-111.

4. CSA implements phase 2 of the Public Crypto Asset Funds Project through amendments to NI 81-102

What did the CSA change in NI 81 102 for crypto asset funds?

On April 17, 2025, the CSA introduced amendments to National Instrument 81-102 - Investment Funds and its companion policy ("NI 81-102CP") to create a formal regulatory framework for reporting issuer investment funds seeking to invest directly or indirectly in crypto assets.

These changes were the result of multiple rounds of comments and responses with stakeholders and represented the completion of phase 2 of the CSA's Public Crypto Asset Funds Project. These amendments were enacted to clarify existing practices regarding the management of crypto assets by fund managers and strengthen investor protection as the Canadian digital asset market continues to develop.

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