Members of the Canadian Securities Administrators (CSA) except for Ontario and British Columbia have announced that amendments to National Instrument 13-101 System for Electronic Document Analysis and Retrieval (SEDAR) and Multilateral Instrument 13-102 System Fees for SEDAR and NRD (the Amendments) will come into force on May 24, 2016. The substance and purpose of the Amendments is to provide an interim electronic filing solution to issuers for exempt market filings.
Ontario and British Columbia are not participating in the Amendments as they have local systems in place to receive these filings electronically.
Scope of amendments. The Amendments will require certain exempt market filings, which are currently filed in paper format, to be filed in electronic format on SEDAR. These filings include:
- Form 45-106F1 Report of Exempt Distribution
- Offering memorandum (OM) and other material required to be filed or delivered under the OM exemption under section 2.9 of National Instrument 45-106 Prospectus Exemptions
- Form 5 – Start-up Crowdfunding – Report of Exempt Distribution and offering document required to be filed or delivered under the start-up crowdfunding prospectus and registration exemptions in Saskatchewan, Manitoba, Québec, New Brunswick and Nova Scotia.
- Offering document and certain other documents under required to be filed or delivered by an issuer under Multilateral Instrument 45-108 Crowdfunding
- in Québec, a disclosure document delivered to subscribers required to be filed under section 37.2 of the Securities Regulation (Québec)
Exempt market filings not listed in the Amendments, including OMs and wrappers delivered in connection with the accredited investor exemption, will continue to be filed in paper format
No new publicly available information. The new SEDAR filings will not expand the scope of publicly available information. The exempt market filings that will be made public on SEDAR are filings that are already publicly available upon request from the CSA. While the method of accessing those documents would change due to required filing on SEDAR, the public availability of the documents will not change.
Personal information safeguards. Schedule I to Form 45-106F1 that includes personal information about each investor must be detached from the body of the report and filed separately. Features added to SEDAR to safeguard personal information include: (1) clear instructions and a warning on SEDAR to remove the sensitive personal information prior to filing the main body of the report of exempt distribution and (2) a requirement for the filer to acknowledge that it has removed such information before the system. If a filer identifies that it has inadvertently made confidential information public, it can contact one of the participating jurisdictions and the filing will be made private upon notification.
Additional nominal fees. The Amendments will require issuers to create and maintain a SEDAR profile and to pay a SEDAR system fee of $25 per filing of a report of exempt distribution. This fee would be in addition to any filing fee required in each CSA jurisdiction.
Voluntary filings. From December 7, 2015 to the implementation on May 24, 2016, issuers can voluntarily submit these exempt market filings electronically on SEDAR without paying the system fee. The goal of the voluntary filing period is to provide applicable issuers with time to transition to SEDAR.
Multiple portals and future integration. As noted above, the Amendments are intended as an interim measure. Although the Amendments will reduce the time and cost of multiple paper filings, they will also result in three different filing platforms among British Columbia, Ontario and the other CSA jurisdictions. To address this inefficiency, the CSA advise that a longer-term CSA project is underway to create a single integrated filing system for exempt market filings that would further reduce regulatory burden on market participants. The integrated filing system will be part of the larger CSA systems renewal project.
Multilateral CSA Notice of Amendments to National Instrument 13-101 System for Electronic Document Analysis and Retrieval (SEDAR) and Multilateral Instrument 13-102 System Fees for SEDAR and NRD can be found on the participating CSA members’ websites.