The first quarter of 2015 saw a number of regulatory developments in Canadian capital markets that may specifically affect companies in the oil and gas industry. Below, we’ve compiled a list of key legal developments since January 1, 2015 that may be of particular interest, along with corresponding links to our securities blog.


  • Canadian regulators publish draft rules to amend the take-over bid rules to require a 120-day minimum bid period (subject to the right of the target to waive to 35 days) a minimum 50% tender condition and a mandatory 10 day extension after the satisfaction of all other conditions. This is a proposal - no changes in the rule are expected for another year.  
  • OSC reviews recent related party transaction disclosure, encouraging issuers to provide more information about insider participation in private placements and board process related to transaction approval

Capital Markets

  • TSX completes the first listing of a special purpose acquisition company (a TSX form of CPC).  
  • Canadian regulators allow a cheaper alternative to the rights offering - permitting existing shareholders to purchase up to $15,000 of listed securities or warrants of a TSX or TSXV company without a prospectus or rights circular, subject to a 100% dilution limit.  
  • TSXV amends private placements rules to eliminate premium warrant pricing in certain transactions and to codify procedures for the amendment of convertible securities to reflect current working practices.  
  • Canadian regulators expand the accredited investor category to require additional steps to verify AI status, require AI’s to sign a risk acknowledgment and remove the $150,000 exemption (for persons other than holding companies). This rule is effective May 5, 2015.  
  • TSX proposes new rules for inter-listed issuers to increase TSX deference to larger-volume exchanges and to propose a shareholder vote for voluntary delisting.  
  • TSX makes housekeeping amendments to the NCIB and dividend/distribution reporting forms.

Continuous Disclosure

  • Canadian regulators amend oil and gas disclosure rules in NI 51-101 to provide for alternative resource evaluation methods, additional guidance on contingent and prospective resource data reporting, enhanced abandonment and reclamation cost disclosure and a new approach to reporting of certain production and other metrics. The new rules are effective for the reserve report for the year ending December 31, 2015 for issuers with a December 31 year end.

Investment Dealers

  • IIROC releases final guidance on underwriting diligence, offering recommended practices on diligence planning, the structure of Q&A sessions and business diligence.  
  • Canadian regulators (other than Ontario) exempt certain US broker-dealers and advisors from registration requirements if they have offices or employees in Canada.

Activism & Litigation

  • In Hariharan, the OSC approves a settlement proposed by staff that makes a resident of Ontario liable under Ontario law for insider trading in an entity that was not a reporting issuer in Canada.  
  • In Beaudette, an Alberta court finds that an Alberta resident could not rely on the Charter to protect himself from disclosure requested by the ASC in connection with an SEC investigation of that resident.  
  • Ontario certifies the securities class action claim against Sino-Forest.  
  • The OSC proposes key elements of a whistleblower rule, including providing for the payment of incentives of up to $1.5M to those who provide high-quality information.  
  • Canadian regulators provide an update on their review of the proxy voting system, recommending actions to modernize the vote tabulation process and other steps.

Key Stikeman Elliott Publications