On April 17, 2025, the Canadian Securities Administrators (CSA) issued a series of coordinated blanket orders, effective immediately, to facilitate capital raising and streamline disclosure requirements for issuers. These measures are intended to reduce regulatory burdens, increase flexibility for issuers and enhance the competitiveness of Canadian capital markets. The CSA has emphasized that these actions are informed by stakeholder feedback and ongoing global market uncertainty and volatility.
Below is an overview of the new blanket orders and their implications for market participants.
New reporting issuer blanket order
A new prospectus exemption is available to reporting issuers that have recently gone public via an underwritten initial public offering (IPO) in Canada to raise additional capital within the 12 months immediately after their IPO.
The exemption allows the issuer to distribute listed equity securities to the public without a prospectus, up to the lesser of $100 million, or 20% of the aggregate market value of the issuer's listed equity securities on the date the issuer issues the news release announcing the first offering in reliance on the exemption. The securities offered must be of the same class as those qualified under the IPO prospectus and sold at a price per security not less than the IPO price.
Before soliciting an offer to purchase, the issuer must issue and file a news release announcing the offering and file an offering document that must include, among other information, the following:
- details of the offering;
- any material fact relating to the securities being distributed that have not already been disclosed in a document filed by the issuer;
- a description of the issuer's business objectives, recent developments and use of proceeds;
- a contractual right to cancel within two days of purchase; and
- rights of recission or action for damages in the event of a misrepresentation in the offering documents.
The exemption is not available for:
- investment funds;
- distributions in connection with a restructuring transaction or any transaction that requires securityholder approval; or
- distributions by venture issuers for significant acquisitions under Part 8 of National Instrument 51-102 – Continuous Disclosure Obligations.
The new reporting issuer prospectus exemption offers a streamlined and cost-effective way to raise additional capital within the first year after an IPO, providing an incentive to move forward with an IPO and supporting early growth, liquidity and speed to market, while investors gain more timely access to follow-on offerings from newly listed companies. It also represents a significant move by Canadian securities regulators to recognize an issuer's continuous disclosure record and other securities filings as a solid base for broader capital raising, without the need for a prospectus, building on the existing "listed issuer financing exemption". The challenge may be that, like the listed issuer financing exemption, the applicable conditions limit uptake by issuers that may choose the predictability of, and investor familiarity with, conventional prospectus or private placement financings. For example, not knowing how an issuer's stock will perform post-IPO—or whether it will be affected by sectoral or broader market headwinds—management will not be able to assess with certainty whether this option for capital raising will, in fact, be available in the first year post-IPO (where the offering price must not be less than the IPO price).
Prospectus and disclosure blanket order
Third-year historical financial statements
All issuers filing a prospectus for an IPO, takeover bid circular, issuer bid circulars and similar filings are now exempt from the requirement to include audited financial statements for the third most recently completed financial year. As a consequence, MD&A for the comparative period including that year and financial statements for that year that would otherwise be required for acquired or other businesses forming part of the issuer's "primary business" are similarly not required.
Historically, this exemption applied only to IPO venture issuers and existing reporting issuers; it now extends to all issuers, reducing the time and costs associated with going public by eliminating historical disclosure that may not be material for investors. Further, by aligning with requirements in other jurisdictions (notably the United States), it can remove a potential disincentive to a Canadian IPO.
Standard term sheets and marketing materials during the waiting period
Issuers may now include pricing and deal size information in standard term sheets and marketing materials during the waiting period (between the preliminary and final prospectus), provided a news release disclosing the pricing and deal size information is issued beforehand.
This eliminates the costs and administrative burden of filing an amended preliminary prospectus solely to update pricing or deal size. The relief applies to all issuers using the short form or long form prospectus regime.
Promoter certificate exemptions
Issuers will not need to include a promoter certificate in a prospectus if:
- the promoter is an individual that has already signed the prospectus in another capacity (e.g., as a director or officer); or
- in Alberta, Manitoba, New Brunswick, Nova Scotia, Ontario and Saskatchewan, (1) the issuer has been a reporting issuer for at least 24 months; (2) the promoter is not a director, officer or control person of the issuer; and (3) the issuer is not distributing asset-backed securities.
The exemption does not affect the statutory liability of promoters under securities laws.
Offering memorandum blanket order
In Alberta, New Brunswick, Nova Scotia, Ontario, Québec and Saskatchewan, the offering memorandum prospectus exemption includes certain investment limits for individual investors who do not meet the definition of "accredited investor", including a 12-month investment limit of $100,000 if the investor receives advice from a registered dealer or registered adviser that the investment is suitable for the investor.
The blanket order provides an exemption to the 12-month $100,000 investment limit, such that these investors may now reinvest proceeds from a disposition of an investment in the same issuer within a 12-month period without the reinvestment counting towards the $100,000 annual limit.
The exemption is available only where the individual investor receives suitability advice from a registered dealer or registered adviser; however, eligible investors have greater flexibility to manage and reinvest their capital in exempt-market offerings, potentially increasing their participation in private placements.
In Ontario and Nova Scotia, issuers relying on this exemption must provide written notice to the regulator within ten days of the distribution, including specified information.
Next steps
The CSA's blanket orders are effective as of April 17, 2025 and will remain effective until October 16, 2026, unless extended. Issuers and market participants should review the full text of the blanket orders for jurisdiction-specific details, including any expiry dates.
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.
