Corporate Finance & Securities

Instruments and IPOs

Corporate finance & securities law includes financing vehicles or instruments, whether public or private, including IPOs, capital market equity offerings, installment receipt transactions, securities regulation and compliance, debt securities, bond issues, linked debt/equity instruments, structured financings, hybrid structured financings incorporating tax driven and capital markets products, private placements, commercial paper; financing structures related to capital reorganizations and restructurings, mergers and acquisitions, leveraged buy-outs, take-overs, management buy-outs and buy-ins, venture and development capital, high-risk (vulture) capital, asset-backed financings, asset-backed securities, asset securitization, receivables financing, off-balance sheet financing, etc.

CSA Propose to Relax Thresholds for Filing

As set out by Wildeboer Dellelce LLP1:

On September 5, 2019, the Canadian Securities Administrators (CSA) published for comment proposed amendments to National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102), which would relax the requirements for certain public companies to file a business acquisition report (BAR) in connection with business acquisitions.

The potential changes are informed by comment letters and stakeholder feedback obtained by the CSA in response to a consultation paper published in 2017. Any comments on the proposed amendments to the BAR requirements were due to the CSA by December 4. 2019.


In proposing these amendments, the regulators’ stated objective is to reduce the regulatory burden imposed by the current BAR requirements, without compromising investor protection. The proposed amendments are just one of six areas of securities legislation applicable to non-investment fund reporting issuers that could see a reduction in regulatory requirements in the coming months, as part of a broader regulatory burden reduction initiative announced by the CSA in 2018.

The Proposed Amendments

Under the current regime, a reporting issuer that is not an investment fund or venture issuer is required to file a BAR after completing a “significant acquisition,” as determined by reference to three tests:

1. Asset Test. The asset test is triggered where a target company’s assets exceed 20% of the acquiring company’s assets;

2. Investment Test. The investment test is triggered where an acquiring company’s investment in the target company exceeds 20% of the acquiring company’s assets; and

3. Profit or Loss Test. The profit or loss test is triggered when a target company’s profit or loss exceeds 20% of the acquiring company’s profit or loss.

Currently, a non-investment fund and non-venture reporting issuer would need to file a BAR in connection with an acquisition that satisfies any one of the aforementioned tests.

Under the new rules, the percentage threshold required under each test would be increased from 20% to 30%. In addition, two of the three significance tests would need to be triggered in relation to the relevant acquisition, rather than the current threshold of one test being triggered.

Non-Application to Venture Issuers

The CSA have stated that, at this time, the proposed amendments are not intended to apply to the BAR requirements as they relate to venture issuers. The regulators have already implemented reductions in regulatory burdens for venture issuers through a 2015 initiative that saw an increase in the significance threshold from 40% to 100%, and a removal of the requirement that BARs filed by venture issuers contain pro forma financial statements.

  1. “Business Acquisition Reports: CSA Propose to Relax Thresholds for Filing.” Wildeboer Dellelce LLP, September 24, 2019.