On January 11, 2024, the CSA published final rules to permit issuers (other than investment fund issuers, i.e. corporate finance issuers) to adopt an access equals delivery model for most prospectuses. The model does not apply to prospectuses for rights, medium-term notes and other continuous distributions under a shelf prospectus or to the continuous disclosure regime.
What does this mean for corporate finance issuers?
Generally, issuers will be able to satisfy the prospectus delivery requirement by:
- Publicly filing the document on SEDAR+; and
- Issuing and filing a news release announcing that the document is publicly available on SEDAR+ and that a paper or electronic copy can be obtained upon request.
Usually, the press release must be filed when the final prospectus is filed. However, for shelf and post-receipt pricing (PREP) prospectuses, the press release may be filed earlier and state that the prospectus will be available on SEDAR+ within two business days.
What does it mean for purchasers?
Purchasers will be able to:
- Access a prospectus electronically through SEDAR+; or
- Obtain an electronic or paper copy without charge from the issuer by providing an address.
It should be noted that there is no time limit within which an issuer or dealer must send a copy of a preliminary prospectus requested by a prospective purchaser.
The rights of withdrawal, revocation or cancellation of an agreement to purchase securities remain available.
When does this change take place?
These rules are effective April 16, 2024, provided that the necessary approvals are obtained.
Does this simplify the rules?
Not really. The access model described above is not mandatory. Rather, it is an alternate procedure. Each corporate finance issuer must choose whether to follow the current paper delivery rules or the access equals delivery rules.
What is the impact of the change?
According to the CSA, implementing these changes will "modernize the way prospectuses are made accessible to investors and reduce costs associated with the printing and mailing of prospectuses, which are currently borne by issuers. It offers benefits for both issuers and investors by providing a more cost-efficient, timely and environmentally friendly manner of communicating information to investors than paper delivery." We agree. But what about other rules that still require paper delivery?
What about the continuous disclosure regime and other types of documents?
According to the draft OSC Statement of Priorities for Fiscal Year 2024-25, the CSA anticipates publishing for comment an access equals delivery model for continuous disclosure of corporate finance issuers before the end of March.
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