Canada: CSA Propose "Notice and Access" Shareholder Communication Model

As we discussed in our post of April 9, the Canadian Securities Administrators (CSA) have recently published much-anticipated proposals to amend National Instrument 54-101 Communication with Beneficial Owners of Securities of a Reporting Issuer (NI 54-101), which would give issuers the option to post proxy-related materials on a non-SEDAR website under a "notice-and-access" model. The proposed amendments aim not only to facilitate communication with shareholders, but also include amendments intended to increase the overall efficiency and equity among key players involved in the securityholder communication process.


Specifically, the proposed amendments would allow a reporting issuer to distribute proxy related materials to shareholders in one of three ways: (a) by sending paper copies by prepaid mail, courier or the equivalent; (b) by providing notice-and-access for any meeting that is not a special meeting; or (c) any other delivery method to which the beneficial owner consents. To rely on the notice-and-access option, which is proposed to be available only for non-special meetings, the issuer would be required to send a "notice" informing beneficial owners that proxy-related materials have been posted and explaining how to access them. If the issuer is also seeking voting instructions, the notice must be sent together with a voting instruction form by prepaid mail, courier or the equivalent method, or by any other method previously consented to by the beneficial owner as required under NI 54-101, at least 30 days prior to the meeting date. The issuer would also be required to send a news release at the same time containing the same information as the notice and, if notice-and-access is being used for some but not all beneficial shareholders, an explanation of why. Public electronic access to the information circular and other proxy-related materials must be provided on the same day as the reporting issuer sends the notice to beneficial owners by filing the proxy-related materials on SEDAR and by posting them on a non-SEDAR website. Once posted, the materials must remain posted until the next annual meeting for that issuer. The issuer must also provide a toll-free telephone number that shareholders can call to request a paper copy of the information circular and must fulfill any requests so received within three business days. It should be noted that the responsibility to fulfill requests for paper copies rests with the issuer and not the intermediary. While the notice-and-access option would seem to result in greater efficiency with respect to sending meeting materials and may be employed selectively to communicate with some but not all beneficial owners, it is only proposed in respect of meetings that are not special meetings. The proposed process may also affect the timing of meetings given the requirement to send the notice at least 30 days in advance of the meeting date.

The proposed amendments also contain certain protective provisions, including prohibitions restricting issuers that are contacted for paper copies from obtaining information other than the name and address to which the material is to be sent and from disclosing or using the name or address for any purpose other than sending the requested material. The issuer must also not use any means to post proxy-related materials that would enable the issuer to identify a person or company that has accessed the website address where the proxy-related materials are located. The proposed amendments make it clear that a beneficial owner may consent to the use of other delivery methods for receiving proxy-related materials. Issuers are reminded, however, that in such cases National Policy 11-201 Delivery of Documents by Electronic Means would apply to such consents being obtained from beneficial owners.

The US Securities and Exchange Commission (SEC) introduced its own notice-and-access process effective January 2009, which, while similar to the CSA process, has some notable differences. Among others, (i) notice-and-access would not be mandatory for reporting issuers under the CSA proposal; (ii) the relevant voting instruction form (Form 54-101F6 or Form 54-101F7) must be sent with the initial notice; and (iii) the reporting issuer is responsible for fulfilling requests for paper copies of information circulars, not the intermediary. The CSA proposal also maintains certain basic differences in beneficial owner communication procedures, including the option for reporting issuers to send proxy-related materials and solicit voting instructions directly from non-objecting beneficial owners (NOBOs) and to choose not to pay for intermediaries to forward proxy-related materials and voting instruction forms to objecting beneficial owners (OBOs). Given these differences, SEC issuers would be able to satisfy their NI 54-101 obligations with respect to beneficial owners by complying with the US notice-and-access process.

Appointment of proxy holders by beneficial owners

In addition to providing a notice-and-access option for distribution of materials, the proposed amendments also aim to simplify the process for appointing proxy holders on behalf of beneficial owners. While intermediaries and reporting issuers would still be required to arrange to appoint the beneficial owner as proxy holder at the beneficial owner's request, intermediaries and issuers would be given greater flexibility to determine the specific arrangements pursuant to which the appointment may be made. For example, the currently used "appointee system" option would be expressly permitted, allowing the beneficial owner to print the beneficial owner's name, or the name of its appointee, on the voting instruction form, which would in turn be recorded on a cumulative proxy to be provided to the meeting scrutineer.

New information circular disclosure requirements

The proposed amendments also require additional disclosure to be included in management information circulars in specified circumstances. For example, if the issuer chooses not to pay for intermediaries to send proxy-related materials and a voting instruction form for use by intermediaries to OBOs, the proposed amendments require management of the reporting issuer to disclose this fact in the circular and to disclose that it is the OBO's responsibility to make arrangements with his or her intermediary to exercise his or her voting rights. This leaves open the possibility of differential treatment of shareholders and, in the absence of payment by the issuer, that OBOs will not receive proxy-related materials. The proposed amendments also require management of the reporting issuer to disclose and discuss why, if applicable, the reporting issuer is using notice-and-access selectively in respect of some but not all beneficial owners.

In addition to the above changes, the proposed amendments also include new prohibitions on the use of NOBO information by third-parties as well as certain technical amendments and, if approved, will result in consequential amendments to National Instrument 51-102 Continuous Disclosure Obligations, Form 51-102F5 Information Circular and National Policy 11-201 Delivery of Documents by Electronic Means. According to the CSA, the proposed amendments are intended to improve the beneficial owner communication procedures, keeping in mind principles of equal treatment among registered and beneficial securityholders, efficiency and equality and clarity of the obligations of all parties involved in the securityholder communication process. The proposals have been published for a 144-day comment period expiring on August 31, 2010.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.