Canada: Matters To Consider Before Implementing "Notice-And-Access"

Amendments to National Instrument 54-101 Communication with Beneficial Owners of Securities of a Reporting Issuer  (NI 54-101) are now in force. These amendments give reporting issuers and others the option to use the "notice-and-access" method to post proxy-related materials on a website (in addition to SEDAR) instead of having to mail materials to registered holders (under National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102)) and to beneficial owners (under NI 54-101).

This is the second part of our two-part series which addresses the implementation of notice-and-access. In the first part, we provided a summary of how notice-and-access is intended to work and highlighted items that reporting issuers needed to prepare for in advance. In this part, we examine some of the issues and considerations involved with implementing notice-and-access.

Governing Law Considerations

Given the various sources of regulation for reporting issuers, while notice-and-access has been specifically recognized for securities law purposes, reporting issuers who intend to utilize it must ensure that in doing so they also comply with their constating documents, by-laws and governing law. For non-corporate entities such as partnerships and trusts, for example, this would include ensuring that notice-and-access is compatible with the relevant provisions of the limited partnership agreement or declaration of trust. Concerns involving compliance with governing corporate law, in particular, include whether electronic delivery of proxy-related materials is permitted by such governing law, whether such delivery requires express or implied consent, and whether obligations of intermediaries to forward materials to beneficial owners can be satisfied where notice-and-access is used.

Notice-and-access permits a reporting issuer to send proxy-related materials (including its financial statements and MD&A, should it so choose) to its registered holders and beneficial owners by sending to them by mail (or other means if they have consented), a "Notice-and-Access Notice" together with the relevant voting instruction form or form of proxy, and posting the proxy-related materials (i.e. the notice of meeting and management proxy circular) on a non-SEDAR website (provided all other notice-and-access requirements are satisfied). The crux of the issue with respect to the Canada Business Corporations Act (the CBCA), and other CBCA-based statutes, is that electronic delivery of proxy-related materials requires express written consent, and it is unclear whether the statute's delivery obligations can be considered to be satisfied without obtaining such consent.

The CBCA prescribes a number of specific matters relating to the calling of a shareholders' meeting and sending of proxy materials. In particular, the CBCA requires that shareholders be sent a notice of meeting, form of proxy and information circular (if proxies are being solicited) and clarifies that the requirement to provide a document under the CBCA is not satisfied with the provision of an electronic document unless consent in the prescribed manner is obtained. The CBCA also requires that copies of the financial statements and related auditors' report for the most recently completed financial year must be sent to shareholders, other than those who have informed the corporation in writing that they do not wish to receive them. The net effect of these provisions is that it is doubtful whether notice-and-access, in its current iteration, can be used under the CBCA without a shareholder's express consent or instructions. The CBCA does, however, give the Director under the CBCA some latitude to provide relief and could be one avenue to overcome these issues. While it is arguable that these provisions of the CBCA have a specific purpose to ensure that shareholders have access to proxy-related materials, the Canadian Securities Administrators (the CSA) would also have had regard to similar concerns in making notice-and-access available, which is arguably more than "mere" electronic delivery, but is structured with the realities of modern communication in mind, and to reasonably ensure that a shareholder has easy access to all relevant documents and ample opportunity to request paper copies. Similar issues also arise under the Bank Act (Canada) and the Insurance Companies Act (Canada).

While the above discussion highlights issues pertaining to the use of notice-and-access in relation to registered holders, certain provisions in the CBCA pertaining to the duties of intermediaries also create concerns about the viability of utilizing notice-and-access in relation to beneficial owners. In particular, such provisions prohibit the voting of any shares that are registered in the name of an intermediary and not beneficially owned by it, unless the intermediary sends to the beneficial owner copies of all proxy-related materials that it receives. Notice-and-access, however, provides that the intermediary would only receive a "Notice-and-Access Notice" (and paper copies of the financial statements and MD&A, if applicable) and it is not clear whether the forwarding of this Notice-and-Access Notice alone would satisfy that requirement and permit those shares to be voted (in contrast, see for example similar provisions in s. 49 of the Securities Act (Ontario) or s. 165 of the Securities Act (Québec) which apply to "registrants" and "custodians" (or, in Québec, to "dealers or any other persons holding the securities of a reporting issuer on behalf of clients") but do not condition the ability to vote shares on the documents having been forwarded). 

In a recently posted notice, Corporations Canada has provided some clarity in stating that notice-and-access "provides shareholders with sufficient disclosure to support an application for an exemption from the requirement set out in ss. 150(1) of the CBCA to send the prescribed management proxy circular to each shareholder whose proxy is solicited." Notably, however, the same notice indicates that the authority to grant an exemption does not extend to the requirement under s. 159 to send financial statements to shareholders nor to the requirements applicable to intermediaries under s. 153 and that  Corporations Canada takes "no position as to the effect of the exemption on the duties of an intermediary as detailed under s. 153 of the CBCA."

The Business Corporations Act (Ontario) (the OBCA) also requires that shareholders be sent a notice of meeting, form of proxy and information circular. However, there is no equivalent provision expressly requiring consent to electronic delivery. Further, the OBCA acknowledges electronic delivery in accordance with the Electronic Commerce Act (Ontario) (the ECA), which in turn encompasses a concept of implied consent. The CSA have also provided some comfort in this respect by setting out in the Companion Policy to NI 54-101 and NI 51-102 that, in their view, notice-and-access is consistent with the principles of electronic delivery under National Policy 11-201 Electronic Delivery of Documents, and this policy states that such principles are compatible with the legal framework for electronic delivery under corporate legislation.

Unlike the CBCA (and the OBCA), the Business Corporations Act (Québec) (the QBCA) does not have provisions dealing with the solicitation of proxies, including, for example, the requirement that an issuer send a management proxy circular to shareholders if the issuer is soliciting proxies. Moreover, the QBCA does not have provisions pertaining to the duties of intermediaries in connection with proxy-solicitations, including notably the prohibition to vote any shares that are registered in the name of an intermediary unless the intermediary sends to the beneficial owner copies of all proxy-related materials that it receives. As a result, the notice-and-access regime would be available for a corporation governed by the QBCA, subject to complying with the issuer's constating documents and by-laws, and provided all other notice-and-access requirements are satisfied.

Next Steps and Take-Aways

We understand that efforts are underway with staff of the Ontario Securities Commission, other members of the CSA and relevant corporate authorities to attempt to resolve these issues. While regulatory guidance may be forthcoming, we caution that not all regulators may have the discretionary authority to interpret or provide relief from all relevant statutory provisions, and it is unlikely that statutory amendments could be made in time for the current proxy season. However, these issues will continue to evolve and reporting issuers who intend to make use of notice-and-access are encouraged to contact us regarding compliance with applicable law and the preparation of proxy materials.

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.