Canadian securities regulators have recently unveiled a series of regulatory measures aimed at strengthening Canada's capital markets and encouraging more companies to go public and raise capital (including through the existing listed issuer financing exemption), despite ongoing global economic uncertainty.
The new measures include streamlined disclosure requirements, expanded exemptions and increased investment limits – all of which are designed to reduce time, costs and barriers for businesses wishing to raise capital while maintaining investor protection.
The regulatory measures have been implemented by coordinated blanket orders providing exemptions from certain prospectus and disclosure requirements, a temporary increase in the amount listed reporting issuers can raise under the existing listed issuer financing exemption (the "LIFE Exemption"), and a prospectus exemption for new reporting issuers1. In addition, the securities regulators in Alberta, New Brunswick, Nova Scotia, Ontario, Québec and Saskatchewan have implemented a coordinated blanket order providing an exemption from the investment limits under the offering memorandum prospectus exemption to exclude reinvestment amounts2. The key changes brought about by each coordinated blanket order are summarized below.
Exemptions from certain prospectus and disclosure requirements
Coordinated Blanket Order 41-930 is intended to support the competitiveness of Canada's public markets by making it more cost-efficient for issuers to go public in Canada through an initial public offering (IPO) prospectus, and by streamlining other disclosure requirements.
Third-year historical financial statements
Under Coordinated Blanket Order 41-930, issuers and offerors filing an IPO prospectus are exempt from the requirements to provide financial and operating statements for the third most recently completed financial year. The rationale for this relief is that the additional third year of historical financial and operating statements may provide limited incremental value to investors while imposing costs on potential issuers and offerors, and it recognizes that most issuers in comparable jurisdictions do not have the same requirement.
The exemption applies to IPO prospectuses and extends to information circulars, take-over bid circulars, issuer bid circulars and material change reports that directly or indirectly reference prospectus requirements.
Note that issuers must still comply with all other disclosure requirements in the aforementioned documents that relate to the third most recently completed financial year.
Standard term sheets and marketing materials during the waiting period
Coordinated Blanket Order 41-930 also provides an exemption from the requirement that all information contained in standard term sheet and marketing materials provided during the waiting period must be disclosed in, or derived from, a previously-filed preliminary prospectus or an amendment to a preliminary prospectus.
Coordinated Blanket Order 41-930 allows standard term sheets and marketing materials provided during the waiting period between the receipt of the preliminary prospectus and final prospectus to include the following information:
- the price (or price range) of offered securities;
- the number (or range of the number) of offered securities;
- the total dollar amount (or range of the total dollar amount) of offered securities;
- the total number (or the range of the total number) of securities of the issuer of the class proposed to be distributed under the prospectus that would be outstanding post-offering and post-offering ownership (or the range of the post-offering ownership) of the issuer by selling securityholders and principal securityholders; and
- any other terms of the offered securities or information regarding the issuer that are mathematically derived from any of the information referred to above (referred to as the "specified pricing information").
The standard term sheets and marketing materials containing the information described above can only be provided during the waiting period if the following conditions are met:
- before an investment dealer provides potential investors with the standard term sheet or marketing materials containing specified pricing information, the issuer issues and files a news release containing the specified pricing information; and
- all information in the standard term sheet and marketing materials, other than the specified pricing information, information mathematically derived from the specified pricing information and contact information for the investment dealer or underwriters, is disclosed in or derived from, the preliminary prospectus or any amendment to the preliminary prospectus.
The relief eliminates the time and cost of having to file an amended preliminary prospectus to disclose pricing and deal size information before such information can be marketed to potential investors during the waiting period. It recognizes that there is limited benefit to the market to requiring an issuer to file an amended preliminary prospectus where the issuer has already publicly disclosed the specified pricing information in a news release filed on SEDAR+.
Promoter certificate exemption
Also under Coordinated Blanket Order 41-930, issuers are no longer required to include in a prospectus a separate certificate from a promoter who is an individual if that individual has already signed another certificate in a different role (e.g., director or officer) in the correct form. This relief recognizes that the promoter is already assuming liability for a misrepresentation in the prospectus by signing a prospectus certificate in another capacity.
In Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick and Nova Scotia, Coordinated Blanket Order 41-930 also provides that issuers are exempt from including a promoter certificate in a prospectus, other than a prospectus qualifying the distribution of asset-backed securities, for issuers that have been reporting issuers for at least 24 months, and where the promoter is not a director, officer or control person of the issuer.
An issuer relying on any exemptions included in Coordinated Blanket Order 41-930 will need to refer to such reliance in the applicable disclosure document.
Temporary increase of limits in LIFE Exemption
Coordinated Blanket Order 45-935 raises the issuer fundraising limits under the LIFE Exemption significantly. Under the LIFE Exemption, eligible issuers can now raise up to the greater of: (i) C$25,000,000; or (ii) 20% of the aggregate market value of the issuer's listed securities to a maximum of C$50,000,000 in a 12-month period. This is a five-fold increase from the previous capital raising limit, which was the greater of C$5,000,000 or 10% of market value to a maximum of C$10,000,000.
Coordinated Blanket Order 45-935 also relaxes the dilution limitations under the current exemption. Only warrants exercisable within 60 days of closing of a distribution will count toward the 50% dilution limit. However, issuers cannot rely on the expanded exemption if it would result in the creation of a new control person, nor can any person or company acquire beneficial ownership of a listed issuer's securities if such acquisition would result in that person or company being entitled to elect a majority of the directors of the issuer.
Coordinated Blanket Order 45-935 came into effect on May 15, 2025. In certain jurisdictions, it includes an expiry date based on the term limits for blanket orders in the jurisdiction. For example, in Ontario, its term is 18 months and it will expire on November 15, 2026.
Since the LIFE Exemption was introduced in November 2022, over 270 issuers have used it to raise more than C$1 billion. While the exemption has been well received, Canadian securities regulators have acknowledged that the original capital-raising limits were constraining its use and effectiveness, prompting the increase under Coordinated Blanket Order 45-935. For more information on the LIFE Exemption, please see our past articles here and here.
For small and mid-sized public companies, the expanded capital-raising limits will allow for larger financings without the time, cost, and complexity of preparing a prospectus – making it a practical tool for meeting funding needs in a constrained market.
Prospectus exemption for new reporting issuers
Coordinated Blanket Order 45-930 provides a new prospectus exemption for new reporting issuers for the 12 months immediately after the issuer has received a final receipt for a long form prospectus qualifying an underwritten IPO. It allows them to raise additional capital within such 12 month period without needing to file a new prospectus or rely on another prospectus exemption. The issuer can instead issue a news release and file a simplified offering document for the new offering with Canadian securities regulators.
Canadian securities regulators recognize that to receive a receipt for a final prospectus, an issuer conducting an IPO must undergo a lengthy review and comment process in respect of their prospectus disclosure. Issuers wishing to rely upon this exemption must continue to file all periodic and timely disclosure documents required under applicable securities legislation.
To qualify, the new offering must:
- be of the same class of securities as qualified under the IPO prospectus;
- be priced no lower than the price per security distributed under the IPO prospectus; and
- be limited annually to the lesser of C$100 million or 20% of the aggregate market value of the issuer's listed equity securities, based on the date of the news release announcing the first exempt offering.
In addition, use of this new exemption is limited to issuers who reasonably expect to have available funds to meet their business objectives and liquidity requirements for a period of 12 months after the exempt offering.
There are also disclosure requirements for the news release announcing the offering and the issuer must close the offering no later than the 45th day after the date the issuer issues and files the required news release.
There are specified disclosure requirements for the simplified offering document including a detailed description of the issuer's business objectives, recent developments and use of proceeds, as well as the use of funds from the issuer's IPO and any subsequent financings.
Additional disclosure may be required by non-venture issuers where proceeds from the distribution are allocated to any recently completed or probable significant acquisition. In Québec, the simplified offering document must be prepared in French or French and English.
An issuer must file a report of exempt distribution following an offering in reliance upon this exemption. This exemption cannot be relied upon to distribute securities to persons who are employees, insiders or consultants of the issuer.
Coordinated Blanket Order 45-930 cannot be used for a restructuring transaction or any other transaction that requires securityholder approval, and a venture issuer cannot use it for acquisitions that would be significant acquisitions.
Exemption from the investment limit under the offering memorandum prospectus exemption to exclude reinvestment amounts
In Alberta, New Brunswick, Nova Scotia, Ontario, Québec and Saskatchewan, the offering memorandum exemption includes certain investment limits for individual eligible investors who do not meet the definition of "accredited investor" or who are persons described in the family, friends and business associates prospectus exemption, including an annual limit of C$100,000 if the eligible investor receives advice from a registered investment dealer, registered exempt market dealer or registered portfolio manager that the investment itself is suitable for the investor.
Coordinated Blanket Order 45-933 provides an exemption from the 12 month, C$100,000 investment limit, such that a re-investment of proceeds of disposition of an investment in the same issuer does not count towards such investment limit, provided that the eligible investor receives advice from a registered dealer or registered adviser that the re-investment of proceeds and any new investment under the offering memorandum exemption continues to be suitable for the investor.
In Ontario and Nova Scotia, an issuer distributing securities in reliance on this blanket order must, in addition to the required report of exempt distribution, provide written notice via email to the applicable securities regulator within ten days of the distribution including certain required information relating to the distribution.
Footnotes
1. Coordinated Blanket Order 41-930 Exemptions from Certain Prospectus and Disclosure Requirements, Coordinated Blanket Order 45-935 Exemptions from Certain Conditions of the Listed Issuer Financing Exemption and Coordinated Blanket Order 45-930 Prospectus Exemption for New Reporting Issuers.
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