The following is an overview of key developments in Canadian public markets law applicable to the oil and gas industry from July 1, 2015 to September 30, 2015.

Public Capital Markets

  • The prospectus-exempt rights offering regime was revised (effective in December) to increase the permitted dilution limit from 25% to 100% and allow the use of a simplified rights offering circular that doesn’t require regulatory review, amongst other changes. 
  • The TSX expanded exemptions for inter-listed companies from certain of its transaction and corporate governance rules, provided that less than 25% of the issuer’s trading volume has occurred on a Canadian market in the last 12 months and that certain other conditions are met. 
  • IIROC reduced the research report quiet period after an IPO from 40 to10 days and from 10 to 3 days after a secondary offering.

Private Capital Markets

  • Most CSA members are implementing rules (effective in May) requiring public and private issuers to make certain private placement documentation available on SEDAR. Ontario and BC will continue to use existing systems. 
  • Following three other jurisdictions, the ASC proposed to allow any listed company that is a reporting issuer in Canada to distribute securities by private placement to any non-accredited investor that receives advice on the suitability of the purchase from an investment dealer, provided certain other fairly routine requirements are met.

Continuous Disclosure

  • The SEC proposed rules that would significantly expand the circumstances in which public companies would be required to claw back incentive-based compensation.  The rules would apply to all entities listed on US stock exchanges, including Canadian foreign private issuers.
  • The CSA’s 2015 continuous disclosure review noted failures to file material change reports when near-term earnings prospects change and avoiding selective disclosure in private meetings with analysts or industry conferences, amongst other issues. 

Litigation

  • In Alberta, orders and settlement agreements made by other Canadian jurisdictions are now automatically recognized.  The ASC will recognize international orders and settlements at its discretion.