The Canadian Securities Administrators has implemented blanket orders to support companies looking to list publicly and maintain a listing, contributing to capital formation in the country.
The coordinated orders were introduced in response to global markets’ present uncertainty. They took effect on April 17.
According to Stan Magidson, CSA chair and Alberta Securities Commission chair, the measures will bolster the competitiveness of Canadian markets.
“Canada is a great place to do business, and companies going public here support investors and the vitality of our capital markets. The actions announced today represent the start of incremental measures to support the competitiveness of Canada’s capital markets. We are making it easier and more cost-effective for businesses to raise capital and grow in Canada, without sacrificing investor protection,” Magidson said in a statement.
The first blanket order is a multi-faceted prospectus and disclosure order that will reduce regulatory burden and improve flexibility for companies presently reporting or seeking an initial public offering in Canada. In line with stakeholder input, the order applies to all companies, the existing exemption from the requirement to provide audited financial statements for the third most recently completed financial year in connection with IPOs and other transactions
The second blanket order offers a prospectus exemption to companies that have recently or will be going public via an underwritten IPO, extending flexibility to raise more post-IPO capital if certain conditions are met.
Under the third blanket order in Alberta, New Brunswick, Nova Scotia, Ontario, Québec and Saskatchewan, the offering memorandum exemption’s investment limit will tick up for specific qualified investors, facilitating the reinvestment of proceeds within 12 months pending the fulfillment of particular terms and conditions. Other CSA jurisdictions do not adhere to this limit.
The CSA has asked market participants, investor advocates, and interested stakeholders to contact their principal regulator if they would like to provide input on the orders. Market participants were also asked to check the blanket orders for expiry date details, where applicable.
The CSA confirmed that it was considering other opportunities and actions to back investors and businesses in Canada’s capital markets.