The Canadian Securities Administrators (CSA) announced on July 20 with effect from July 21, 2023, that they were issuing substantively harmonized exemptions from the requirement to file certain private placement forms [Form 45-106F1 Report of Exempt Distribution] through SEDAR+, provided that various conditions are met. The relief was granted through a co-ordinated 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 (the Blanket Orders). The purpose of the exemption is to allow the CSA additional time to consider possible enhancements to the functionality of SEDAR+. In certain jurisdictions, the Blanket Orders expires after a specified period (e.g. 18 months in Ontario).
Pursuant to National Instrument 13-103 System for Electronic Data Analysis and Retrieval+ (SEDAR+) that came into force on June 9, reports of exempt distribution must be filed through SEDAR+. The Blanket Orders provide a temporary exemption from this requirement, but only for a distribution of an eligible foreign security to a permitted client, where the form of report is alternatively filed in the manner set out in Appendix A to the Blanket Order, on the Form set out in Appendix B to the Blanket Order.
An "eligible foreign security" is defined for these purposes as 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:
(i) That is incorporated, formed or created under the laws of a foreign jurisdiction,
(ii) That is not a reporting issuer in a jurisdiction of Canada,
(iii) That has its head office outside of Canada, and
(iv) That has a majority of the executive officers and a majority of the 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 same meaning as in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations.
If the distribution occurs in a jurisdiction that requires a copy of the offering memorandum be delivered to the regulator, the Blanket Order also provides an exemption from filing through SEDAR+ provided it is also transmitted in the manner set out in Appendix A to the Blanket Order.
Appendix A includes information that varies by jurisdiction, such as the email address to which the form of report or offering memorandum should be sent, as well as the specific from of spreadsheet or PDF document acceptable by each regulator.
The form set out in Appendix B is slightly different from the report of exempt distribution form that is otherwise required to be filed through SEDAR+, because it includes items that would have been otherwise captured in a SEDAR+ profile filing.
In terms of confidentiality, reports of exempt distribution filed under the Blanket Orders will be publicly available only on request made to CSA members (as compared to reports of exempt distribution filed through SEDAR+ which will be publicly available through the SEDAR+ search function). The Schedule 1's to the reports, and offering memoranda (other than those used in reliance on section 2.9 of NI 45-106), whether filed through SEDAR+ or under the Blanket Orders are private.
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.