Effective November 18, 2020, the rules relating to filing a business acquisition report (BAR) are being relaxed for reporting issuers that are not venture issuers. This includes TSX-listed issuers. The Canadian Securities Administrators (CSA) are increasing the significance thresholds for the tests that trigger the requirement to file a BAR by such reporting issuers and are also increasing the number of tests that must be met prior to triggering the requirement to file a BAR.
BARs are required to be filed when a reporting issuer makes a "significant" acquisition. BARs have attracted criticism as being duplicative with other disclosure and burdensome, and it is anticipated the amendments will be well received. Currently the BAR requirements for reporting issuers (non-venture) are based on three significance tests: the asset test, the investment test and the profit or loss test. The current rules only require one of the three tests to be met before the requirement to file a BAR is triggered. The amendments will introduce a two-trigger test that will require a least two of the three tests to be met. In addition, the significance threshold for each of the trigger tests will be increased to 30% from 20%. Both of these changes will likely result in decreased BAR filings for non-venture reporting issuers.
Changes relaxing the venture issuer BAR requirements (which includes TSX-V issuers) were introduced in 2015. These rules only require the filing of a BAR where the threshold of either the asset or investment test exceeds 100%.
It should be noted the changes are effective November 18, 2020, and are not retroactive. If a BAR filing requirement is triggered prior to that date, compliance with the existing requirements is still required unless exemptive relief is obtained. A copy of the amendments is available here.
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