Canadian capital markets in 2016 were turbulent and unpredictable, to say the least. Factors that contributed to shaky investor confidence included the unprecedented British vote to exit the European Union, the hard fought and (to some) surprising result of the U.S. presidential election, a weakening Canadian dollar and volatile commodity prices. These uncertain conditions forced issuers and their advisers to develop and implement novel structures to attract investment. These novel structures forced regulators to reconsider the application of old rules to new ideas. As we begin a new year, there is new hope that the stormy days of 2016 are behind us. So far in 2017, we have seen a resurgence of equity offerings by Canadian resource companies. Adding to this cautious optimism is an apparent renewed IPO market, with four Canadian IPOs announced to date in the first quarter of 2017.

It is in the context of this environment that we are pleased to provide you with an overview of some of the more notable developments in the Canadian capital markets in 2016 and to share with you our views on these developments and their potential impact for 2017.

  • By mid – 2016, investors had handed over more than $1.2 billion to six Canadian special purpose acquisition corporations, or SPACs, with a view to investing alongside experienced Canadian dealmakers. In 2016 and early 2017 five SPACs presented acquisition proposals to their shareholders for approval, only three of which were completed. This track record suggests that Canadian SPACs Lost Their Lustre in 2016.
  • There has been no shortage of hostile bids commenced since the new takeover bid regime came into effect in May 2016. Hecla Mining's unsolicited takeover bid for Dolly Varden Silver Corp. last July, the first contested transaction under the new regime, prompted a regulatory hearing and resulted in a regulatory framework for analyzing a target's response to an unsolicited bid. We summarize this framework and the important takeaways to consider in Private Placements in the Face of a Bid.
  • In a year without significant capital markets activity, 2016 provided us with some unique capital market transactions. We review two of these transactions in A New Recipe Brings the Sponsor-Backed PIPE Market to Canada and Brio Gold Spinoff Rights Offering: Using Unique Means to Achieve Non-Unique Objectives.
  • Peer-to-peer lending websites first appeared in Canada in 2008, causing the Canadian securities regulators to focus on the complexities of these initiatives and the appropriate regulation of this activity. What began as a rocky start for fintech companies in Canada has resulted in A Long and Winding Road: Canadian Securities Regulators Announce Fintech Initiatives.
  • For decades there has been a great split among Canadian securities regulators. At issue is when an offshore trade should be subject to the prospectus requirements of Canadian securities laws. In 2016, the Ontario Securities Commission proposed a rule that should revolutionize the universe of Canadian offshore offering regimes, giving us A New Hope: Ontario Proposes Enlightened Offshore Offering Regime.
  • In September 2016, the Canadian federal government introduced changes to the Canada Business Corporations Act with a view to harmonizing the statute with Canadian securities law requirements. See if the government was able to strike the right balance in Bill C-25 Proposes Changes to the Canada Business Corporations Act: Has It Gone Too Far or Not Far Enough?
  • The Toronto Stock Exchange frequently engages in improving its rules while attempting to strike the right balance between investor protection and issuer regulation. Sometimes the balance tips too far in one direction. Find out how the recent initiatives of the TSX have measured up in TSX Makes Notable Amendments to the TSX Company Manual.
  • In 2016, the U.S. Securities and Exchange Commission (SEC) had a busy rulemaking year. As part of its Disclosure Effectiveness Initiative launched at the end of 2013, the SEC continued to propose and adopt rules that are intended to improve and modernize the disclosure requirements for reporting companies. The SEC also continued to implement sections of the Jumpstart Our Business Startups Act and the Fixing America's Surface Transportation Act to provide more flexibility in capital raising and reduce the regulatory burden on private companies. Learn how these initiatives can affect Canadian issuers in Ten SEC Rulemaking Developments in 2016.

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