Canada: Projet de hausser à 30 % le seuil de déclaration d'une acquisition d'entreprise afin d'alléger le fardeau réglementaire des émetteurs assujettis

Les Autorités canadiennes en valeurs mobilières (ACVM) souhaitent alléger l’obligation de déclarer une acquisition d'entreprise imposée aux émetteurs assujettis. Les ACVM proposent une condition à deux critères et un seuil plus élevé des critères de significativité, qui passerait à 30 % pour les émetteurs assujettis non émergents. Les modifications proposées ont été publiées le 5 septembre 2019 et s’inscrivent dans la volonté des ACVM d’alléger le fardeau réglementaire des émetteurs assujettis, énoncée dans leur document de consultation de 2017, en réduisant les cas où il faut produire une déclaration d'acquisition d'entreprise accompagnée d’états financiers audités.

Une traduction de ce billet sera disponible prochainement.

Proposed amendments to the business acquisition report (BAR) requirements would implement a two-trigger test with an increased significance threshold of 30% for non-venture reporting issuers. The proposed amendments were published by the Canadian Securities Administrators (CSA) on September 5, 2019 and represent a positive development in the CSA’s goal of reducing regulatory burden for reporting issuers, as discussed in the CSA’s 2017 Consultation Paper, by narrowing the circumstances in which a business acquisition report, and the audited financial statements that would accompany a BAR, must be filed.

A Two-Trigger Test

Under the proposal, reporting issuers would only be required to file a BAR where two of the three existing significance tests set out in National Instrument 51-102 – Continuous Disclosure Obligations (NI 51-102) are triggered using an increased significance threshold of 30%. This so-called “two-trigger test” is the outcome of the CSA’s consideration of consultation feedback and an analysis of BARs filed and relief granted over a historical three-year period.

BAR Requirements

Currently, reporting issuers are required to file a BAR following the completion of a “significant acquisition”. An acquisition is considered to be significant where the result of any one of the three significance tests set out in NI 51-102 exceeds 20% (and in the case of a venture issuer, 100%). If a BAR is to be filed, it must include two years of comparative financial information for the acquired business (one year of which must be audited), as well as pro forma financial statements for the combined business, among other things.

Significant Benefits of the Proposed Amendments

The current BAR rules may limit reporting issuers in their ability to access Canadian capital markets, pursue acquisitions and raise acquisition financing. Experience has shown that it is often the case that an acquired business’ historical financial statements are not readily available, often requiring an issuer to incur additional costs, or, in appropriate circumstances, seek exemptive relief from the BAR requirements. Additionally, the current significance tests may overstate the significance of an acquisition from a practical, commercial, business or financial perspective, making the related disclosure confusing and less beneficial to investors, and ultimately not worth the time and cost to prepare. In its proposal, the CSA acknowledge these concerns noting that the BAR requirements may impose a burden on reporting issuers that is not coupled with an equal benefit to investors.  

Accompanying the CSA’s request for comments, the Ontario Securities Commission (OSC) has published a qualitative and quantitative analysis of the anticipated costs and benefits of the proposed amendments. Notably, this analysis indicates that the adoption of the proposed amendments would result in significant cost savings for issuers. The OSC estimates that:

  • The total cost reduction resulting from a decrease in BAR related exemptive relief applications that would be filed on an annual basis would equal between $71,370 and $93,850; and
  • The total cost reduction resulting from a decrease in the number of BARs that would be filed on an annual basis would equal between $1,577,880 and $1,620,000.

In addition to direct economic impacts, the proposed amendments may also reduce issuers’ burdens in undertaking prospectus offerings, including initial public offerings, as the BAR requirements and significance tests form part of the prospectus requirements where an issuer has completed or will likely complete an acquisition and a BAR has yet to be filed.

Venture and Investment Fund Issuers

The significance threshold for ventures issuers will not be affected by the proposed amendments. Venture issuers are not required to apply the “profit or loss test” in determining whether an acquisition is significant and, since June 30, 2015, the significance threshold for venture issuers has been 100%. The same increased threshold has applied to prospectus disclosure of significant acquisitions as well as the “prospectus level disclosure” that is required for information circulars. Similarly, the proposed amendments will not impact investment fund issuers who are not required to comply with NI 51-102 generally.

Comment Period

The CSA is accepting comments on the proposed amendments until December 4, 2019. For further information, please see CSA Notice and Request for Comment Proposed Amendments to National Instrument 51-102 Continuous Disclosure Obligations and Changes to Certain Policies related to the Business Acquisition Report Requirements.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Borden Ladner Gervais LLP
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Borden Ladner Gervais LLP
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions