Amendments to several national instruments and companion policies (the Amendments) concerning the implementation of an access model (the Access Model) for prospectuses of non-investment fund reporting issuers will come into force on April 16, 2024.
The Access Model modernizes the way prospectuses are provided to investors, and reduces the time and cost associated with printing, mailing and delivering prospectuses, while also providing a more environmentally friendly approach.
The Access Model establishes alternative procedures for providing investors with access to a preliminary or final prospectus by providing electronic access to a prospectus and alerting investors that the document is accessible through SEDAR+. Use of the Access Model is not mandatory and prospective investors or investors may still request a copy of a prospectus in electronic or paper form under the Access Model. In this case, a copy of the document in the format requested by the purchaser must be sent without charge by the issuer or dealer within two business days from the date the request is received.
The Amendments include amendments to the following national instruments and companion policies:
- National Instrument 41-101 – General Prospectus Requirements and Companion Policy 41-101CP;
- National Instrument 44-101 – Short Form Prospectus Distributions;
- National Instrument 44-102 – Shelf Distributions and Companion Policy 44-102CP;
- National Instrument 44-103 – Post-Receipt Pricing and Companion Policy 44-103CP; and
- National Instrument 47-201 – Trading Securities Using the Internet and Other Electronic Means.
The Access Model will either (a) satisfy the conditions of an exemption from the requirements under securities law to send a prospectus, as required in British Columbia, Québec and New Brunswick or (b) constitute delivery for the prospectus under securities laws, as required in the remaining Canadian jurisdictions.
Provided all necessary approvals are obtained, the Amendments will come into force on April 16, 2024.
The application of the Access Model under in B.C.
With respect to an eligible prospectus or amendment to a prospectus filed in British Columbia under NI 41-101 – General Prospectus Requirements, NI 44-101 – Short Form Prospectus Distributions and NI 44-102 – Shelf Distributions (excluding At-the-Market Distributions), the Amendments include the provisions described below.
Exemption from requirement to send a final prospectus
| NI 41-101 and NI 44-101 | A dealer is exempt from the requirement to send a final prospectus and any amendment (the Exemption) if (a) the document has been filed on SEDAR+ and a receipt has been issued and posted on SEDAR+, and (b) after the receipt is posted, a news release containing certain prescribed information is issued and filed on SEDAR+ (together, the Exemption Conditions). |
| NI 44-102 | Other than pursuant to an MTN program or other continuous distribution, a dealer is exempt from the requirement to send a final prospectus and any amendment (the 44-102 Exemption) if (a) the base shelf prospectus and any amendment have been filed on SEDAR+ and a receipt has been issued and posted on SEDAR+, (b) the shelf prospectus supplement and any amendment have been filed on SEDAR+, and (c) after the shelf prospectus supplement and any amendment were filed, or within two business days before the date the document was filed, a news release containing certain prescribed information is issued and filed on SEDAR+ (together, the 44-102 Exemption Conditions). |
Notice of intention not to be bound
| NI 41-101, NI 44-101 and NI 44-102 | If a dealer relies on the Exemption or 44-102 Exemption, an agreement of purchase and sale is not binding on a purchaser if the applicable dealer receives written notice (the Notice) sent by the purchaser, evidencing the intention of the purchaser not to be bound by the agreement, not later than two business days after the later of (a) the date that the Exemption Conditions or 44-102 Exemption Conditions, as applicable, are satisfied; and (b) the date that the purchaser entered into the agreement (the Notice Deadline).
This provision does not apply if the purchaser (i) is a registrant, or (ii) disposes of the beneficial ownership of the applicable securities, otherwise than to realize on collateral given for debt, before the Notice Deadline. |
Expressions of interest, confirmation clauses and marketing
| NI 41-101, NI 44-101 and NI 44-102 | A dealer or issuer that solicits an expression of interest from a prospective purchaser is exempt from the requirement to send a copy of the preliminary prospectus or preliminary base shelf prospectus to the prospective purchaser if the document has been filed on SEDAR+ and a receipt has been issued and posted on SEDAR+ for the document. |
| NI 44-101 | In the context of a bought deal, the Amendments modify the framework surrounding solicitations of expressions of interest, confirmation clauses, standard term sheets, marketing materials and roadshows. These modifications provide alternatives to delivering the preliminary prospectus, instead setting out requirements for certain written or oral statements to be made or certain legends to be included in materials, indicating that the preliminary prospectus is or will be available on SEDAR+, among other things. |
Access model for continuous disclosure expected to follow
The CSA confirmed in October 2023 that it continues to consider additional amendments (the Proposed Amendments) to applicable legislation, with a view to implementing an access model for certain continuous disclosure documents. The Proposed Amendments are intended to streamline and clarify disclosure requirements for annual and interim financial statements, annual and interim management’s discussion and analysis (MD&A) and annual information forms (AIFs). The Proposed Amendments would further combine interim and annual financial statements, MD&A, and, where applicable, the AIF into one reporting document for each reporting period, called the interim disclosure statement or annual disclosure statement, as applicable.
If you are interested in learning more about the Access Model or any other securities or corporate governance matters, please contact MLT Aikins Corporate Finance & Securities practice group.
Note: This article is of a general nature only and is not exhaustive of all possible regulatory requirements, legal rights, or remedies. Laws and regulatory requirements may change over time and should be interpreted only in the context of particular circumstances. These materials are not intended to be relied upon or taken as legal advice or opinion. Readers should consult a legal professional for specific advice in any particular situation.