On January 11, 2024, the Canadian Securities Administrators (CSA) published, in final form, amendments to several national instruments and changes to companion policies to implement an electronic access model for prospectuses (Access Model), which will take effect on April 16, 2024, provided all necessary regulatory and ministerial approvals are obtained. The Access Model, which is not mandatory for issuers, provides an alternative procedure for the electronic delivery of a preliminary prospectus or final prospectus, which dealers may rely on to satisfy, or be exempt from, prospectus delivery requirements under securities legislation.
Overview of the Access Model
Under the Access Model:
- providing public electronic access to a prospectus by filing it on SEDAR+, and
- alerting investors by way of a news release issued and filed on SEDAR+ that the prospectus is accessible through SEDAR+ and that an electronic or paper copy can be obtained upon request
will constitute delivery for the prospectus under securities legislation (or, in British Columbia, Québec and New Brunswick, satisfy the conditions of an exemption from the requirements under securities legislation to send a prospectus). The Access Model permits the prescribed news release to be issued within two business days before the prospectus is filed, so that the model is also applicable to shelf distributions and post-receipt pricing (PREP) prospectuses, where a news release is issued immediately after pricing is determined, before the filing of the shelf prospectus supplements and supplemented PREP prospectuses. The Access Model is currently not available for rights offerings, medium-term note programs and other continuous distributions under a shelf prospectus.
Impact on Issuers and Investors
The Access Model is intended to modernize the way prospectuses are made accessible to investors and reduce costs to issuers associated with the printing and mailing of prospectuses. Purchasers will still have the ability to request a copy of a prospectus in electronic or paper form, which will not affect the calculation of the period of time during which a purchaser's statutory withdrawal rights must be exercised.
The CSA's publication of a finalized Access Model is an important step forward in recognizing the digital transformation of the capital markets and the prevalence of electronic communications with investors.
About Dentons
Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries. www.dentons.com
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. Specific Questions relating to this article should be addressed directly to the author.