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
27 Oct 2016, Seminar, Toronto, Canada

Please join members of the Blakes Commercial Real Estate group as they discuss five key provisions of a commercial real estate purchase agreement that are often the subject of much negotiation but are sometimes misunderstood.

1 Nov 2016, Seminar, Toronto, Canada

What is the emotional culture of your organization?

Every organization and workplace has an emotional culture that can have an impact on everything from employee performance to customer or client satisfaction.

3 Nov 2016, Seminar, Toronto, Canada

Join leading lawyers from the Blakes Pensions, Benefits & Executive Compensation group as they discuss recent updates and legal developments in pension and employee benefits law as well as strategies to identify and minimize common risks.

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.