New rules relating to reports filed with Canadian securities
regulators in connection with private placements are expected to
come into force on June 30, 2016. The new rules eliminate the
fragmented reporting requirements across the country by introducing
a single form of report for all Canadian jurisdictions. However,
the additional information requested under the new form of report
may increase the compliance burden for issuers and
Gowling WLG Focus
Currently, issuers and underwriters who rely on certain
prospectus exemptions to distribute securities need to file
different reports in different jurisdictions: Form 45‑106F6 in British Columbia and Form 45‑106F1 in all other Canadian jurisdictions. Under the new rules, reports for most private placements will be filed
under an amended Form 45-106F1 in all jurisdictions.
While the harmonized report is intended to reduce the compliance
burden for issuers and underwriters, as discussed below, additional
information is required under the new form of report, which may in
fact increase the compliance burden, at least initially. However,
Canadian securities regulators have indicated that they need this
additional information for purposes of regulatory oversight of the
exempt market and for policy development purposes.
Additional Information to Be Disclosed
Compared to the current report forms, issuers will need to
disclose additional information, including:
additional details about the issuer, including the number of
employees of the issuer or, for investment funds, the net asset
value of the fund (in each case, expressed as a range);
for certain issuers, the identities and residential addresses
of the directors, executive officers, promoters and control
additional details about the securities being distributed and,
for certain jurisdictions, a list of all offering materials filed
with or delivered to the securities regulators in connection with
specific details about the exemptions relied on (including, in
the case of accredited investors, the specific category of
accredited investor applicable to each purchaser); and
information about persons being compensated in connection with
the distribution and the compensation being paid.
Electronic Filing of the New Form 45‑106F1
Under rules currently in effect, reports in British Columbia and
Ontario must (with limited exceptions) be filed electronically
– in British Columbia, using BCSC eServices and, in Ontario,
through the OSC’s Electronic Filing Portal. In the other
Canadian jurisdictions, new rules are expected to come into force
on May 24, 2016, which will require reports of exempt distributions
to be filed electronically through the System for Electronic
Document Analysis and Retrieval (SEDAR).
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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