Canada: Public Offerings And Continuous Disclosure Under Cooperative Capital Markets Regulatory System: Tip Of The Iceberg

The federal government and the governments of British Columbia, New Brunswick, Ontario, Prince Edward Island and Saskatchewan (Participating Provinces) have signed a memorandum of agreement to formalize the terms and conditions of the new proposed cooperative capital markets regulatory system (Cooperative System), which will be administered by a single Capital Markets Regulatory Authority (Authority).

Given the scope of the new proposed federal and provincial legislation, Blakes is publishing a series of bulletins regarding various aspects of the proposed Cooperative System, which can be accessed here. This bulletin concerns the proposed regulation of public offerings of securities and the continuous disclosure obligations of reporting issuers under the draft Provincial Capital Markets Act (PCMA) published in September 2014.


By design, the PCMA takes a "platform" approach to many aspects of capital markets regulation. Therefore, many requirements that are currently contained in the securities legislation of Participating Provinces will instead be addressed in regulations to be made by the Authority. This approach is intended to "promote regulatory flexibility" and allow the Authority "to respond to market developments in a timely manner and appropriately tailor its regulatory treatment of various entities and activities."

Consistent with the "platform" approach, the provisions of the PCMA concerning the public offerings of securities and the continuous disclosure obligations of reporting issuers set out limited basic requirements, leaving further requirements to be included in securities regulations.


The PCMA provides, similar to the securities laws currently applicable in the Participating Provinces, that (i) a person may not distribute a security unless a preliminary prospectus and a prospectus have been filed with, and receipted by, the Authority, (ii) the final prospectus must be sent to purchasers of the securities and must provide full, true and plain disclosure of all material facts relating to the securities issued or proposed to be distributed, and (iii) purchasers are entitled to terminate their purchase of the securities by exercising available withdrawal rights.

However, the specifics concerning the required form and content of a preliminary prospectus and a final prospectus, including who must sign and certify such documents, as well as the length of time during which withdrawal rights may be exercised, will be located in the regulations. Further, the PCMA provides that a preliminary prospectus must "substantially" comply with the form and content requirements under "capital markets law," which is broadly defined as including the PCMA and its regulations as well as any securities regulatory decisions to which the offeror of securities under the prospectus is subject.

In a departure from the current regulatory approach, the PCMA also provides for a potential parallel system for public offerings which, in lieu of using a prospectus, would permit an offeror of securities to instead file a "prescribed disclosure document" to be reviewed and receipted by the Authority and delivered to purchasers. It is not currently clear what such a document would look like since the PCMA succinctly states that a prescribed disclosure document must comply with the requirements prescribed by regulation.


Comprised of just a few brief sections, the continuous disclosure requirements under the PCMA specify that reporting issuers must, in accordance with and subject to the regulations, provide disclosure of material changes and, in certain situations, send forms of proxy and management information circulars to holders of its voting securities.

Similar to the current Securities Act (British Columbia), the remaining continuous disclosure obligations are open-ended, in that a reporting issuer is required to provide prescribed periodic disclosure about its business and affairs, including financial reports, and provide any other disclosure required by the regulations.

In a departure from the current regulatory approach, the PCMA also provides for certain of the continuous obligations to apply to "any other issuer within a prescribed class," which is noted, in commentary accompanying the proposed PCMA, as potentially including non-reporting issuers engaged in "crowd-funding."


The PCMA is also intended to "update and modernize" current provincial securities legislation by "introducing new elements to promote flexibility within a robust regulatory framework." However, commentary accompanying the proposed PCMA is not comprehensive and numerous proposed changes are not explained.

For example, the definition of "misrepresentation" which, in the existing securities legislation of the Participating Provinces, refers to "an untrue statement of material fact" is proposed to be changed to "a false or misleading statement of a material fact" without commentary. The term "misrepresentation" is a key element of the provisions relating to both prospectus and secondary market civil and regulatory liability. See our November 2014 Blakes Bulletin: New Cooperative Capital Markets Rules Affect Civil Liability for Misrepresentation, Insider Trading.

Additionally, the definition of "reporting issuer" appears to only apply on a prospective basis and, unlike the current securities legislation of the Participating Provinces, does not include a qualifying category for issuers whose securities are listed for trading on a specified stock exchange. The PCMA definition broadly includes qualifying categories for issuers designated as reporting issuers by the Authority and issuers within a class of issuers who are prescribed by regulation to be reporting issuers. However, the PCMA does not appear to include transitional provisions and it is unclear how and which existing reporting issuers will become reporting issuers under the Cooperative System.


As "platform" legislation, the PCMA is only the tip of the iceberg concerning the proposed regulation of public offerings of securities and the continuous disclosure obligations of reporting issuers under the Cooperative System. The federal government and the Participating Provinces have announced that draft initial regulations to the PCMA will not be ready for publication by the previously announced milestone date of December 19, 2014 and are now scheduled to be released for public comment in the early spring of 2015.

The Participating Provinces have stated that they plan to propose initial regulations that "substantially maintain the harmonization achieved under the current structure." While the PCMA includes many unexplained departures from current securities legislation, the Participating Provinces have committed to "propose changes to the existing rules only as necessary to fit them under the PCMA and to eliminate differences in requirements in order to create a single set of regulations that will apply across the participating jurisdictions" and to "publish versions of the draft initial regulations with revisions marked to highlight proposed changes and with a commentary to explain the proposals." This approach is intended to "maintain continuity and minimize disruption for market participants" and "simplify transition to the Cooperative System and provide a strong basis for cooperation with provinces that choose not to participate."

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.

Events from this Firm
23 Nov 2018, Other, Toronto, Canada

Cybersecurity, including data privacy and security obligations, has become a critical chapter in every company’s risk management playbook.

28 Nov 2018, Speaking Engagement, Toronto, Canada

Arbitration has a number of advantages and some disadvantages for the resolution of domestic and international commercial disputes.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
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
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 (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

To Use 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.


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.


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