Canada: The CSA Proposes A Harmonized Report Of Exempt Distribution Across Canada

On August 13, 2015, the Canadian Securities Administrators published for comment proposed amendments to National Instrument 45-106 – Prospectus Exemptions (Proposed Amendments) introducing a new harmonized report of exempt distribution (Proposed Form) that will apply across Canada for all issuers, including investment fund issuers.

Currently, issuers distributing securities and relying on certain prospectus exemptions must file a report of exempt distribution. In all provinces and territories, except for British Columbia, the form of report is Form 45-106F1 - Report of Exempt Distribution. In BC, the form of report is Form 45-106F6 – British Columbia Report of Exempt Distribution (collectively, the Current Forms). The Proposed Form would replace the Current Forms.

As readers may recall, the CSA published for comment two previous proposals in February and March 2014 regarding amendments to the exempt market reporting rules. In preparing the Proposed Form, the CSA reviewed and considered the comments submitted to the prior proposals. The Proposed Form dropped some of the information requirements originally proposed in 2014, while adding new required information.

Purpose of the Proposed Form

The purported purpose of the Proposed Form is to reduce the compliance burden for both issuers (investment fund and non-investment fund issuers) and underwriters by having a harmonized report of exempt distribution. However, the Proposed Form will potentially increase the compliance burden by requesting substantially more information (particularly for distributions made outside of BC). Securities regulators are seeking this information to aid with regulatory oversight and to improve policy development for the exempt market.

Summary of the Proposed Form

The Proposed Form would require disclosure of the following information:

  • identifying information such as the issuer's System for Electronic Document Analysis and Retrieval (SEDAR) profile number and the registrant firm's National Registration Database (NRD) number, the legal entity identifier under the Global Legal Entity Identifier System and CUSIP number of the issuer;
  • details about the issuer including its size and primary business activity;
  • identities of the directors, executive officers, control persons and promoters of certain issuers;
  • details about investment fund issuers including type, size of fund (net asset value), the general category of the fund and net proceeds to the fund;
  • details about the securities distributed and, for certain jurisdiction, details about the documents provided in connection with the distribution;
  • specific details about the exemptions relied on; and
  • details about compensation paid to registrants, connected person, insiders and employees of the issuer or the investment fund manager involved in the distribution.

In an effort to streamline the Proposed Form, in some cases, the Proposed Form will not require certain information that can be gathered through an issuer's continuous disclosure filings, an issuer's profile on SEDAR or a registrant firm's NRD profile.

Key Differences Between the Proposed Form and the Current Forms

The information below is an example of some of the new requirements included in the Proposed Form (particularly for distributions made outside of BC):

  1. All issuers would have to indicate their number of employees by selecting from four broad ranges of employee numbers, serving as a proxy for the size of the issuer.
  2. For issuers that do not have a SEDAR profile, the Proposed Form would require the following disclosure: (i) date of formation; (ii) financial year-end; (iii) jurisdictions where reporting; (iv) stock exchange listings and (v) size of assets.
  3. Currently, the British Columbia Securities Commission's Form 45-106F6 requires disclosure of the name, title and province, state or country of residence of directors, executive officers, control persons and promoters of certain non-reporting and non-investment fund issuers. As well, if the control person or promoter is not an individual, the information described above would also be required for the directors and executive officers of that control person or promoter. These requirements would be extended to all other jurisdictions currently using Form 45-106F1. The Proposed Report would not require this information from: (i) reporting issuers and their wholly owned subsidiaries; (ii) foreign public issuers and their wholly owned subsidiaries; and (iii) issuers distributing eligible foreign securities only to permitted clients.
  4. Directors, executive officers, control persons and promoters of non-investment fund issuers would be required to disclose the number and total amount paid for voting securities of the issuer beneficially owned or directly or indirectly controlled. This type of information is currently required under Form 45-106F6 for distributions in BC and would be extended to all other jurisdictions currently using Form 45-106F1.
  5. While the Current Forms require a description of the type of securities distributed, the Proposed Form would require this information to be provided in a more structured format, using specific 3-letter codes.
  6. For distributions made under the securities legislation of Ontario, Saskatchewan, Quebec, New Brunswick and Nova Scotia, the Proposed Report would require filers to list all offering materials that are required to be filed or delivered in connection with the distribution (for example, offering memoranda provided to prospective purchasers).
  7. Certain compensation information for the distribution would be required under the Proposed Form such as, whether the person being compensated is a registrant or insider of the issuer (currently only required under Form 45-106F6) and whether that person is an employee of the issuer or connected to the issuer.
  8. Lastly; information on the exemption that a purchaser relies on will also be amended by the Proposed Form. The issuer or underwriter would have to identify the exemption relied upon in more detail than what is required under the Current Forms, including stating the section, subsection and paragraph of the exemption relied upon, where applicable. The Proposed Form would only require the issuer or underwriter to identify one category (as opposed to all categories for which a purchaser is eligible).

Filing Systems

While a longer-term CSA project is underway to create a single integrated filing system for the Proposed Form (further reducing regulatory burden on market participants), the Proposed Form is currently designed to be filed using the electronic filing systems currently used in Ontario and BC. In other jurisdictions, the Proposed Form will be filed directly to each applicable securities regulatory authority and regulator. The CSA is also considering how the Proposed Form can be filed using SEDAR for all jurisdictions.

In cross-country distributions, the CSA anticipates that a party would be able to file the Proposed Form by completing the Ontario Securities Commission's electronic form and subsequently filing that same report on the BCSC's eServices system and SEDAR.

Transition Period

All issuers required to file a report of exempt distribution, including investment funds that file annually, will be required to file the Proposed Form beginning on the date the Proposed Amendments come into force.

Investment funds filing on an annual basis will be expected to file the Proposed Form within 30 days after their financial year end until the end of the calendar year that the Proposed Amendments come into force.

The CSA is publishing the proposed amendments for a 60-day comment period ending on October 13, 2015. The CSA notice and Proposed Report can be found here or on the CSA members' websites.

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.