On May 14, 2025, the Canadian Securities Administrators (the "CSA") announced a temporary increase to the limits prescribed by the "listed issuer financing exemption" in Part 5A of National Instrument 45-106 – Prospectus Exemptions (the "exemption"). The exemption is discussed in more detail in our prior legal update.
Under the exemption, listed reporting issuers are limited to raising the greater of $5 million and 10% of the issuer's aggregate market value, to a maximum of $10 million in any 12-month period, subject to a 50% dilution limit. Since the adoption of the exemption in November 2022, it has been used by over 270 issuers to raise over $1 billion.
The CSA are looking to build upon the success of the exemption by increasing the limitations described above. Specifically, effective May 15, 2025, listed reporting issuers are permitted to raise the greater of $25 million and 20% of the aggregate market value of the issuer's listed securities, to a maximum of $50 million in a 12-month period. The 50% dilution limit is also being tweaked, including as it pertains to the period of, and inclusion of warrants in, the dilution calculation.
This change to the exemption has been implemented by way of coordinated blanket orders issued by each securities regulator of Canada's provinces and territories entitled Coordinated Blanket Order 45-935 Exemptions from Certain Conditions of the Listed Issuer Financing Exemption. While the blanket orders are substantively harmonized across jurisdictions, there may be minor differences between provinces or territories, including relating to the term limit of the order. In Ontario, the term of the blanket order expires on November 15, 2026.
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