Canada: The Ropes Recap: Mergers & Acquisitions Law News

The OSC has established a burden reduction task force that indicates it will focus on enhancing competitiveness for market participants by reducing their regulatory burden.

  • The OSC recently published OSC Staff Notice 11-784 Burden Reduction (the "OSC Staff Notice") outlining a public consultation process and inviting comments from stakeholders on methods of further reducing unnecessary regulatory burdens.
  • Stakeholders can also participate by taking the burden reduction survey launched in connection with the OSC Staff Notice. A link to the survey can be found here. The survey and consultation process will remain open until March 1, 2019.
  • The OSC will hold a roundtable discussion on March 27, 2019 to consider submissions on eliminating unnecessary rules and processes while protecting investors and the integrity of the capital markets.

Burden Reduction Initiatives

The OSC Staff Notice follows the national burden reduction initiatives launched in 2017 by the Canadian Securities Administrators ("CSA"). The CSA initiatives were outlined in CSA Staff Notice 51-404 – Considerations for Reducing Regulatory Burden for Non-Investment Fund Reporting Issuers ("CSA Staff Notice – 51-404") and CSA Staff Notice 81-329Reducing Regulatory Burden for Investment Fund Issuers.

Following a public consultation process and considering stakeholder submissions, the CSA outlined six policy projects it intends to concentrate on in CSA Staff Notice 51- 353Update on CSA Consultation Paper Considerations for Reducing Regulatory Burden for Non-Investment Fund Reporting Issuers ("CSA Staff Notice 51-353"). These six intended policy projects are further detailed below.

The OSC Staff Notice clarifies that, while the OSC is committed to nationally harmonized efforts in collaboration with the CSA, it is interested in implementing changes on an interim basis in Ontario that will assist market participates while coordinated national changes are pursued.

The OSC formed its burden reduction task force in November of 2018 in conjunction with the Ontario Ministry of Finance in support of the Government of Ontario's Open for Business Plan.

Balancing Investor Protection

The OSC has a statutory mandate of providing investor protection, fostering fair and efficient capital markets, contributing to the efficiency of the financial system and reducing systemic risks. One of the fundamental principles that the OSC is statutorily required to have regard to is that business and regulatory costs and restrictions on business and investment activity should be proportionate to the significance of the regulatory objective sought. Nonetheless, with respect to, for example, financial statements required in respect of significant business acquisitions, the stated policy of regulatory staff is that the cost of complying with its requirements is generally not sufficient to warrant exemptive relief. 

In undertaking this public consultation, the OSC's burden reduction task force will consider and act on any suggestions to eliminate unnecessary rules and processes without compromising investor protection and the integrity of Ontario's capital markets.

The OSC's Areas of Focus

The OSC is requesting comments and suggestions from stakeholders on the following:

  1. Operational or procedural changes that would make market participants' day-to-day interaction with the OSC easier or less costly.
  2. Ways in which the OSC can provide greater certainty regarding regulatory requirements or outcomes to market participants.
  3. Forms and filings that issuers, registrants or other market participants are required to submit that should be streamlined or required less frequently.
  4. Particular filings with the OSC that are unnecessary or unduly burdensome.
  5. Information that the OSC provides to market participants that could be provided more efficiently.
  6. Requirements under the OSC rules that are inconsistent with the rules of other jurisdictions and that could be harmonized.
  7. Specific requirements under Ontario securities laws that no longer serve a valid purpose.
  8. Ways to enhance and improve how investors experience disclosure provided: (i) before they invest; (ii) as part of ongoing public disclosure; and (iii) by registrants.

Examples of Burden Reduction Submissions to the CSA

The CSA received 57 comment letters in response to CSA Staff Notice – 51-404. The following are examples of burden reduction recommendations that were submitted to the CSA by various commentators:

  1. Facilitating the initial public offering process (IPO) to allow for:

    1. confidential filings of preliminary prospectuses, similar to the process permitted by the Securities and Exchange Commission in the United States;
    2. reduced historical financial statement requirements; and
    3. more certainty with respect to businesses acquired prior to the IPO that are deemed to constitute a "primary business," including bright line tests for greater certainty and transparency and/ or reduced historical disclosure requirements;
  2. Modernizing the policies regarding the dissemination of information to reflect advancements in technology and changes in investors' consumption of information;
  3. Eliminating overlap in IFRS and MD&A disclosure requirements and duplicative requirements for director information and risk factors in various continuous disclosure documents;
  4. Increasing the thresholds for non-venture issuers to trigger the requirement to file a "business acquisition report" or reducing the requirements with respect to such reports, including eliminating the requirement in certain industries;
  5. Eliminating superfluous filing requirements in the short-form prospectus offering system and further facilitating "at-the-market" offerings;
  6. Enhancing the electronic delivery of documents and implementing an "access equals delivery" model; and
  7. Considering a semiannual (as opposed to quarterly) reporting regime.

The CSA's On-going Policy Projects Following its Public Consultation

As previously mentioned, following the public consultation process and considering stakeholders submissions, the CSA announced in CSA Staff Notice 51-353 that it intended to pursue the following six policy projects in the near term:

  1. Exploring potential alternative prospectus models;
  2. Facilitating "at-the-market" offerings;
  3. Revisiting the historical financial statements required to be included in an IPO prospectus;
  4. Removing or modifying the criteria to file a "business acquisition report";
  5. Revisiting continuous disclosure documents with an aim to eliminate burden while enhancing usefulness and understandability for investors; and
  6. Enhancing the electronic delivery of documents.
  7. The CSA noted that there are a number of steps that must occur in connection with any changes in light of the harmonized regime adopted by the CSA and there can be no assurance that any changes will ultimately be adopted in any of the CSA jurisdictions.

Next Steps

The OSC's burden reduction initiative is potentially welcome news for businesses participating in Ontario's capital markets as well as businesses contemplating an initial public offering or go-public transaction. The initiative may also be taken as a signal that the OSC may be willing to be a leader in the national effort to reduce regulatory burdens.

Comments on the OSC initiative are due by March 1, 2019. The OSC indicates that it will then identify a series of short, medium and long-term actions to reduce unnecessary burden and host a roundtable on March 27, 2019 to engage in an open discussion about the proposals being considered and any issues identified.

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 Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Sign Up
Gain free access to lawyers expertise from more than 250 countries.
 
Email Address
Company Name
Password
Confirm Password
Position
Industry
Mondaq Newsalert
Select Topics
Select Regions
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions