The Canadian Securities Administrators (CSA)
recently adopted a new harmonized report of exempt distribution
(the New Report). Issuers that rely on certain
prospectus exemptions to distribute securities are required to file
a report of exempt distribution within ten days of the date of
distribution. The New Report is designed to: (a) reduce the
compliance burden for issuers and underwriters by having a
harmonized report of exempt distribution; and (b) provide
securities regulators with the necessary information to facilitate
more effective regulatory oversight of the exempt market and
improve analysis for policy development purposes.
The New Report will apply in all CSA jurisdictions to both
investment fund issuers and non-investment fund issuers that
distribute securities under certain prospectus exemptions. The New
Report introduces new information requirements, including
disclosure of the following:
additional details about the issuer including its size and
primary business activity;
identities of the directors, executive officers and promoters
of certain issuers;
identities of control persons of certain issuers in a
additional details about the securities distributed and, for
certain jurisdictions, details about the documents provided in
connection with the distribution;
specific details about the prospectus exemptions relied on,
both on an aggregate and per investor basis; and
details about compensation paid to registrants, connected
persons, insiders and employees of the issuer or the investment
fund manager involved in the distribution.
The New Report provides carve-outs from certain information
investment fund issuers;
reporting issuers and their wholly owned subsidiaries;
foreign public issuers and their wholly owned subsidiaries;
issuers distributing eligible foreign securities only to
In addition, an issuer is not required to provide certain
information in the New Report if the information can be gathered
through the issuer's continuous disclosure filings, the
issuer's profile on the System for Electronic Document Analysis
and Retrieval (SEDAR) or a registrant firm's
profile on the National Registration Database
Issuers are required to file the New Report electronically in
all CSA jurisdictions, except certain foreign issuers when filing
on SEDAR. The British Columbia Securities Commission
(BCSC) is developing a web-based filing system on
eServices to accommodate the structured data format of the New
Report. Beginning on June 30, 2016, when the New Report is
effective, issuers filing in both British Columbia and Ontario will
file the New Report with the BCSC and OSC by completing an
electronic form on the BCSC's eServices and the OSC's
Electronic Filing Portal, respectively. In all CSA jurisdictions
other than British Columbia and Ontario, the New Report will be
required to be filed on SEDAR, except by certain foreign issuers.
Both the BCSC's eServices and the OSC's Electronic Filing
Portal will generate an electronic copy of the completed report,
which issuers can then use to file on SEDAR, if required.
All issuers, other than investment fund issuers filing reports
annually, must use the New Report for distributions that occur on
or after June 30, 2016, when the Amendments come into force. If an
issuer completes a distribution before June 30, 2016, and the
deadline to file the report occurs after June 30, 2016, the issuer
must file the old report of exempt distribution. If an issuer
completes multiple distributions on dates that occur within a
10-day period beginning before and ending after June 30, 2016, the
issuer may file either the old report of exempt distribution or the
New Report to report such distributions.
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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