On June 8, 2017, the Canadian Securities Administrators (CSA) published for comment proposed amendments to Form 45-106F1, the form used for private placement reporting in Canada. The proposed amendments are intended to address concerns expressed by non-Canadian dealers and Canadian institutional investors regarding the impact on private offerings into Canada of the June 2016 changes to the Form’s certification and other information requirements.
The most important proposed amendments would revise the Form’s certification language by, among other things, adding a knowledge qualifier (based on reasonable diligence), clarifying that the individual certifying the report is doing so on behalf of the issuer or underwriter and adopting a corporate style signature block.
The proposed amendments would also:
- Permit authorized agents to certify private placement reports on behalf of the issuer or underwriter.
- Provide that filers are only required to provide the name of the exchange on which the issuer’s securities primarily trade (instead of all exchanges).
- Remove the requirement to list all issuer exemption categories for information on the issuer’s directors, executive officers and promoters.
- Permit issuers and underwriters distributing securities to non-individual “permitted clients” to indicate this in their private placement report without specifying which paragraph of the definition of “accredited investor” is applicable to the placee. This change may be particularly significant where an issuer based in certain provinces, such as Alberta, British Columbia and Quebec, privately places securities primarily to qualified institutional buyers in the United States under Rule 144A, where the provincial regulator would require all purchasers worldwide to be named on the Form.
The comment period is open until September 6, 2017.
For further detail regarding the proposed amendments, please see the CSA’s Notice and Request for Comment.
For further background on the process that has led to the proposed amendments, please see our April 2016 Blakes Bulletin: One Size for All: Increased Private Placement Reporting Begins June 30 and our August 2015 Blakes Bulletin: Yet More Enhancements Proposed for Private Placement Reporting.