Canada: Notice-And-Access Related Amendments To National Instruments 54-101 And 51-102

Last Updated: December 11 2012
Article by Brett Kagetsu

Editor: Martine Guimond.

On November 29, 2012, the Canadian Securities Administrators (the "CSA") announced the adoption of amendments to National Instrument 54-101 Communication with Beneficial Owners of Securities of a Reporting Issuer ("NI 54-101") and National Instrument 51-102 Continuous Disclosure Obligations (together, the "Amendments") that modernize and enhance communication between reporting issuers and their shareholders by allowing greater use of the internet for delivering proxy-related materials.  The CSA said that the Amendments are specifically designed to improve procedures for reporting issuer communications with investors who hold securities through intermediaries such as dealers, trust companies and banks, with the aim of increasing the efficiencies of the proxy voting process by reducing the volume of documents sent to shareholders.  It is expected that the Amendments will take effect on February 11, 2013, but reporting issuers will be able to take advantage of the Amendments only for security holder meetings taking place on or after March 1, 2013.

Key Features of Notice-and-Access

Overview

The Amendments allow reporting issuers (other than investment funds) to use a new notice-and-access mechanism ("notice-and-access") via the internet to send proxy-related materials to security holders rather than printing and mailing all proxy-related materials.  With notice-and-access, a reporting issuer may deliver materials by:

  • posting the relevant information circular (and other proxy-related materials) on a website, other than SEDAR (for example, the issuer's website or the website of a service provider); and
  • sending a notice package (the "Notice Package") informing beneficial owners that the proxy-related materials have been posted, and explaining how to access them.

Record Date for Notice

In order to use notice-and-access, a reporting issuer must set the record date for notice of the meeting to be at least 40 days before the meeting (the "Record Date for Notice").

Notification in Advance of First Use of Notice-and-Access

The form of notification of meeting and record dates (the "Notification") set out in NI 54-101 has been amended to include the following:

  • whether the reporting issuer is sending the proxy-related materials to registered holders or beneficial owners using notice-and-access and, if stratification1 will be used, the types of registered holders or beneficial owners who will receive paper copies of the information circular or other proxy-related materials;
  • whether the reporting issuer is sending the proxy-related materials directly to non-objecting beneficial owners of its securities ("NOBOs"); and
  • whether the reporting issuer intends to pay for a proximate intermediary to send the proxy-related materials to objecting beneficial owners of its securities ("OBOs").

The Notification must be filed at least 25 days before the Record Date for Notice when the issuer is using notice-and-access for the first time (e.g., at least 65 days before the meeting).  For subsequent meetings, the issuer can abridge the timeline for filing the Notification to 3 business days before the Record Date for Notice.

Notice Package

Under notice-and-access, the Notice Package sent to shareholders consists of a notice in the required form (the "Notice") and the relevant voting document (a form of proxy or voting instruction form).

The Notice must contain the following information:

  • the date, time and location of the meeting;
  • a description of each matter or group of related matters identified in the form of proxy to be voted on, unless that information is already included in the form of proxy or request for voting instructions that is being sent to shareholders;
  • the website addresses for SEDAR and the non-SEDAR website where the proxy-related materials are posted;
  • a reminder to review the information circular before voting;
  • an explanation of how to obtain from the reporting issuer a paper copy of:
    • the information circular; and
    • if applicable, financial statements of the reporting issuer to be approved at the meeting, and MD&A related to those financial statements, which may be part of an annual report (collectively, the "Financial Information"); and
    • a plain-language explanation of notice-and-access that includes the following information:
      • if the reporting issuer is using stratification, a list of the types of registered holders or beneficial owners who will receive paper copies of the information circular and, if applicable, the Financial Information;
      • the estimated date and time by which a request for a paper copy of the information circular and, if applicable, the Financial Information, is to be received in order for the requester to receive the paper copy in advance of any deadline for submission of the proxy or voting instructions and the date of the meeting;
      • an explanation of how the registered holder or beneficial owner is to return the proxy or voting instructions, respectively, including any deadline for return of the proxy or those voting instructions;
      • the sections of the information circular where disclosure regarding each matter or group of related matters identified in the notice can be found; and
      • a toll-free telephone number the registered holder or beneficial owner can call to get information about notice-and-access.

Sending of Notice Package

The Amendments contemplate that the Notice Package may be sent by prepaid mail, courier or the equivalent, or, if prior consent has been obtained, electronically.  The CSA has also advised that, if a service provider offers an e-delivery method (e.g., an email is sent with hyperlinks to all the proxy-related materials) that is distinct from notice-and-access and that is otherwise compliant with securities legislation, such delivery method can continue to be used in conjunction with notice-and-access.

A reporting issuer using notice-and-access must send the Notice Package to registered holders (and, if it is sending proxy-related materials directly to NOBOs using notice-and-access, to NOBOs) at least 30 days before the date of the meeting.  In respect of mailings to beneficial owners to be done by Broadridge or a proximate intermediary, the issuer must deliver such materials to Broadridge or such proximate intermediary at least 3 business days before the 30th day before the date of the meeting, if the materials are to be sent by first class mail, courier or the equivalent, or at least 4 business days before the 30th day before the date of the meeting, if the materials are to be sent using any other type of prepaid mail.

Internet Access of Materials and Toll-Free Number

If a reporting issuer is using notice-and-access, it must also take the steps set out below.

  • Provide public electronic access to the information circular and the Notice, on or before the date the issuer sends the Notice, by filing the documents on SEDAR and posting the documents on a website other than SEDAR (the "Non-SEDAR Website") for at least one year from the date the documents are posted.  The issuer must also post on the Non-SEDAR Website any disclosure material regarding the meeting that the reporting issuer has sent to registered holders or beneficial owners of its securities, and any written communications the issuer has made available to the public regarding each matter or group of matters to be voted on at the meeting, whether or not they were sent to registered holders or beneficial owners of its securities.  Documents posted on the Non-SEDAR Website must be posted in a manner and be in a format that permits an individual with a reasonable level of computer skill and knowledge to access, read and search the documents on the website, and to download and print the documents.  The issuer must not collect information that can be used to identify a person or company who has accessed the Non-SEDAR Website.
  • Provide a toll-free telephone number for use by registered holders and beneficial owners to request a paper copy of the information circular and, if applicable, the Financial Information, at any time from the date that the issuer sends the Notice up to and including the date of the meeting, including any adjournment. If a request for such documents is received, a paper copy must be sent free of charge by the issuer to the requester at the address specified in the request within 3 business days after receiving the request by first class mail, courier or the equivalent, if the request is received prior to the date of the meeting.  Where the request is received on or after the date of the meeting, and within one year of the information circular being filed, the paper copy must be sent within 10 calendar days after receiving the request.  If an issuer receives a request, the issuer cannot ask for any information about the requester, other than the name and address to which the documents are to be sent, and the issuer cannot disclose or use the name or address of the requester for any purpose other than sending the requested documents.

New Information Circular Disclosure Requirements

The Amendments require a reporting issuer to provide the following disclosure in its information circular: (a) whether the issuer is sending proxy-related materials to registered holders or beneficial owners using notice-and-access and, if stratification will be used, a description of the types of registered holders or beneficial owners who will receive paper copies of the information circular and, if applicable, the Financial Information; (b) whether the issuer is sending proxy-related materials directly to NOBOs; and (c) whether the issuer intends to pay for an intermediary to deliver to OBOs the proxy-related materials and request for voting instructions and, if the issuer does not intend to pay for such delivery, a statement that OBOs will not receive the materials unless the OBO's intermediary assumes the costs of delivery.

Simplification of Beneficial Owner Proxy Appointment Process

The Amendments attempt to simplify the process by which beneficial owners of securities may attend and vote their own securities at securityholder meetings.  The Amendments have removed the requirement for beneficial owners to be sent a legal proxy and instead require the reporting issuer or intermediary (as applicable) to arrange, without expense to the beneficial owner, to appoint the beneficial owner or a nominee of the beneficial owner as a proxy holder if the beneficial owner has instructed the issuer or intermediary to do so either by having filled in and submitted a request for voting instructions sent to the beneficial owner or by having submitted any other document in writing that requests that the beneficial owner or a nominee of the beneficial owner be appointed as proxyholder.  A reporting issuer or intermediary who so appoints a beneficial owner as a proxy holder must deposit the proxy within any time specified for the deposit in the information circular if the reporting issuer or intermediary obtains the instructions from the beneficial owner at least one business day before the termination of that time.

Footnotes

1. "Stratification", in relation to a reporting issuer using notice-and-access, means procedures whereby a reporting issuer may choose to include a paper copy of the information circular and, if applicable, the Financial Information, with the Notice Package sent to some shareholders.

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 Mondaq.com.

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

Authors
Similar Articles
Relevancy Powered by MondaqAI
Blake, Cassels & Graydon LLP
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Blake, Cassels & Graydon LLP
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions