On July 20, 2023, the Canadian Securities Administrators ("CSA") announced a temporary exemption (the "Exemption") from the requirements to transmit a Form 45-106F1 Report of Exempt Distribution ("Report of Exempt Distribution") and offering memorandum through the System for Electronic Data Analysis and Retrieval + ("SEDAR+") in connection with distributions of eligible foreign securities to permitted clients. The Exemption will allow the CSA to consider potential enhancements to the functionality of SEDAR+.
Description of the Blanket Order
Each member of the CSA has implemented the relief through a local blanket order referred to as "Coordinated Blanket Order 13-933 Temporary exemption from the requirement to transmit a report of exempt distribution through SEDAR+ in connection with distributions of eligible foreign securities to permitted clients" (collectively, the "Blanket Order"). An issuer that relies on the Exemption must file its Report of Exempt Distribution and offering memorandum, if applicable, in each jurisdiction where the distribution occurred in the manner set out in the Blanket Order. Filings in Ontario will be made through the Ontario Securities Commission's electronic filing portal, while filings in all other jurisdictions will be by email.
The Blanket Order does not relieve an issuer from any of the reporting requirements in Part 6 of National Instrument 45-106 Prospectus Exemptions or the filing fees or any late fees in respect of the Report of Exempt Distribution. The Exemption relates solely to the method of filing.
Reports of Exempt Distribution filed in reliance on the Blanket Order will be publicly available on request made to the appropriate CSA members.
Who May Rely on the Exemption?
The Exemption is only available in connection with distributions of eligible foreign securities to permitted clients.
An "eligible foreign security" means a security offered primarily in a foreign jurisdiction as part of a distribution of securities in either of the following circumstances:
- the security is issued by an issuer that:
- is incorporated, formed or created under the laws of a foreign jurisdiction;
- is not a reporting issuer in a jurisdiction of Canada;
- has its head office outside of Canada; and
- has a majority of its executive officers and a majority of its directors ordinarily resident outside of Canada; or
- the security is issued or guaranteed by the government of a foreign jurisdiction.
A "permitted client" has the meaning given to it in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations.
Term of the Blanket Order
The Blanket Order came into effect on July 21, 2023. In certain jurisdictions, the Blanket Order includes an expiry date based on the term limits for blanket orders in the local jurisdiction. For example, in Ontario, the Blanket Order will expire on January 21, 2025. The CSA expect that the Blanket Order will be revoked or replaced before the expiry date and will provide notice before taking such action.
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.