On November 27, 2014, the Canadian Securities Administrators published for comment proposed amendments (the “Proposed Amendments”) aimed at streamlining the prospectus exemption for rights offerings by reporting issuers. The Proposed Amendments would update some of the requirements for rights offerings by way of prospectus and repeal the prospectus exemption for rights offerings by non-reporting issuers. The 90-day comment period is open until February 25, 2015.
Key features of the Proposed Amendments include:
- removing the current regulatory review process prior to use of the rights offering circular;
- introducing a more user-friendly form of rights offering circular document; and
- the addition of civil liability for secondary market disclosure.
The CSA hopes that the Proposed Amendments will bolster investor protection while decreasing the time and costs typically associated with conducting a rights offering - making rights offerings more attractive to reporting issuers.