Canada: Canadian Securities Administrators Announce Implementation of the Access Model for Prospectuses
On January 11, 2024, the Canadian Securities Administrators (CSA) published the final form of amendments to securities legislation to implement an access model (the “Access Model”) for delivery of prospectuses. The Access Model will allow reporting issuers to comply with statutory delivery requirements for prospectuses by providing electronic access to a prospectus and issuing a news release alerting investors that it is accessible through the System for Electronic Data Analysis and Retrieval + (SEDAR+).
If necessary regulatory and ministerial approvals are obtained, the amendments will come into force on April 16, 2024.
Background
On April 7, 2022, the CSA published proposed amendments to securities legislation to implement an “access equals delivery” (“AED”) model for certain public company filings by non-investment fund reporting issuers, the details of which can be found in our April 2022 Update, Canadian Securities Administrators Publish Proposed Access Equals Delivery Model. Initially the CSA considered implementing the AED model for prospectuses generally, annual financial statements, interim financial reports and related management’s discussion and analysis (MD&A). The proposed access model for prospectuses was largely well received by commenters, leading to the announcement of the Access Model. However, a number of commenters expressed concerns about implementing the model for annual financial statements, interim financial reports and related MD&A (“Continuous Disclosure Documents”). Accordingly, the CSA continues to consider ways to enhance the access model for Continuous Disclosure Documents and anticipates publishing a revised access model for these documents in due course.
Overview of the Access Model
The Access Model will allow non-investment fund reporting issuers with alternative (and optional) procedures to provide access to a prospectus in fulfilment of applicable statutory delivery requirements. Under the Access Model, the requirement to deliver a prospectus will be met when the prospectus is filed on SEDAR+ and a news release is issued and filed on SEDAR+ indicating, among other information, that the prospectus is available through SEDAR+.
Under the Access Model, withdrawal rights for a prospectus offering may be exercised within two business days after the later of (a) the date that access to the final prospectus or any amendment has been provided, and (b) the date that the purchaser has entered into the agreement to purchase the securities.
Potential Impact of Access Model
The Access Model is intended to modernize the way prospectuses are made accessible to investors and reduce costs associated with the printing and mailing of prospectuses. In addition, the CSA believes the Access Model will provide a more cost-efficient, timely and environmentally friendly manner of communicating information to investors than paper delivery.
For further information regarding the proposed amendments and how they could impact your business, please contact any member of our Capital Markets Group or Mergers and Acquisitions Group.