As outlined in our earlier client updates, the recent adoption
by the Canadian Securities Administrators of notice-and-access
rules, the intention of which is to streamline and facilitate
electronic communication with shareholders, has spawned a host of
technical concerns and uncertainties.
One of the key challenges has been reconciling the
notice-and-access rules with the requirements of corporate statutes
(shareholder communications by publiclytraded corporations are
governed by both corporate and securities laws). On February 28,
2013, staff of the Ontario Securities Commission ("OSC
Staff ") published a notice outlining its views on,
among other things, the interaction of the notice-and-access rules
with the requirements for delivery of proxy-related materials and
financial statements under the Business Corporations Act
(Ontario) (the "OBCA"). Notably, OSC
Staff did not express its views on how the new noticeand- access
rules will interact with corporations governed by the Canada
Business Corporations Act (the
"CBCA"). Please see our March 1, 2013
"Industry Canada Announces Availability of Exemption for
CBCA Issuers Seeking to Adopt New Notice-and-Access
System" for a discussion on how the new
notice-andaccess rules will impact CBCA corporations.
Interaction of Notice-and-Access with the OBCA
In the view of OSC Staff, the requirements of the OBCA are not
an obstacle to the implementation of the notice-and-access system.
The OBCA imposes obligations on Ontario companies to send certain
proxyrelated materials to registered shareholders, and to send the
company's annual financial statements to registered
shareholders requesting same. However, OSC Staff commented that, in
its opinion, the definition of "send" under the OBCA is
broad enough to accommodate electronic delivery of documents,
including electronic delivery through the procedures contemplated
by notice-and-access, and that in fact the statute expressly
permits the electronic delivery of documents in accordance with the
Electronic Commerce Act, 2000 (the
Though the ECA provides, among other things, that: (i) posting a
document on a website does not in itself constitute electronic
delivery, and (ii) a recipient cannot be required to accept a
document in electronic form without his or her consent, OSC Staff
's view is that notice-and-access does not run afoul of these
provisions since issuers must, in addition to making proxyrelated
materials available on a website, mail a notice package to
shareholders with instructions for accessing the materials online
and provide shareholders with an option to request a paper copy of
the materials at no charge.
Implications for Issuers
There continue to be questions and uncertainties about the use
of the notice-and-access rules. However, OSC Staff 's views,
which reflect only the opinion of OSC Staff and do not have the
force of law, represent another helpful step along the path to
facilitate the adoption of notice-and-access and to achieve the
potential efficiencies that the rules contemplate.
For more information on notice-and-access, or to determine
whether notice-and-access is appropriate for your company at this
time, please contact any member of our Corporate Securities
The content of this article does not constitute legal advice
and should not be relied on in that way. Specific 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.
Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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).