On November 27, 2014, the Canadian Securities Administrators
("CSA") published for comment proposed amendments (the
"Proposed Amendments") to the rules governing rights
offerings in Canada. Rights offerings are offerings of securities
to shareholders of the issuer existing at the time of the offering.
The CSA acknowledges that rights offerings can be one of the fairer
ways for issuers to raise capital as they provide security holders
with an opportunity to protect themselves from dilution. However,
the CSA also recognizes that reporting issuers very seldom use
prospectus-exempt rights offerings because of the associated time
The Proposed Amendments are designed to make prospectus-exempt
rights offerings more attractive to reporting issuers by creating a
streamlined prospectus exemption (the "Proposed
Exemption"). The Proposed Exemption updates requirements and
removes the current regulatory review process prior to use of the
rights offering circular. The CSA have also proposed increased
investor protection through the addition of civil liability for
secondary market disclosure and the introduction of a user-friendly
form of rights offering circular.
The Proposed Exemption will not be available where there would
be an increase of more than 100% in the number of outstanding
securities of the class to be issued upon exercise of rights. The
subscription price for a security issuable on exercise of a right
must be lower than the market price at the time of filing the
rights offering notice.
The Proposed Exemption can be accessed here and the CSA has asked for comments to be
provided until February 25, 2015.
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.
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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.
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