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Canada: CSA implements new “Access Model” to facilitate delivery of prospectuses by non-investment fund issuers

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In brief

In January 2024, the Canadian Securities Administrators (CSA) published amendments and changes to several national instruments and companion policies to implement a new non-mandatory access model (Access Model) for preliminary and final prospectuses (collectively, prospectuses) of non-investment fund reporting issuers (Issuers). The Access Model is not available for rights offerings, medium term note programs and other continuous distributions under a shelf prospectus. The amendments are effective 16 April 2024.

Key takeaways

  • File the preliminary prospectus or final prospectus on SEDAR+.
  • If a prospective purchaser requests an electronic or paper copy of the preliminary prospectus, it must be sent without charge. 
  • For a final prospectus, issue and file a news release advising purchasers that the final prospectus is accessible through SEDAR+ and, upon request, in electronic or paper format (which must be sent without charge and within two business days).
  • Depending on the jurisdiction, the above procedures constitute delivery or satisfy an exemption from the requirement to deliver a prospectus to purchasers.

In depth

Shelf and post-receipt pricing (“PREP“) prospectuses 

For shelf prospectuses and PREP prospectuses, the Access Model permits the Issuer to file a single news release disclosing material information about the offering and announcing that the prospectus supplement or supplemented PREP prospectus will be available via SEDAR+ within two business days.

Withdrawal rights

Generally, withdrawal rights expire after two business days from the later of (a) the date of filing of the final prospectus on SEDAR+ and the issuance of the requisite news release, and (b) the date that a purchaser enters into an agreement to purchase the security.

Implications

Since the delivery of physical copies of prospectuses to investors is financially burdensome and time-consuming for Issuers, establishing an (optional) electronic, environmentally friendly method for delivery not only reduces the burden to Issuers in complying with securities legislation, but also streamlines the process of delivering prospectuses; benefiting Issuers, dealers and investors.

The adoption of the Access Model signals a trend towards the future implementation of a revised access model for other document types, such as annual financial statements and management’s discussion and analysis. The CSA is working on developing a further revised access model that improves access to such documents while still balancing investor protection concerns.

For more information or assistance, please do not hesitate to contact us.

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Author

David Palumbo is a partner and Chair of the Corporate Transactions Practice Group in Baker McKenzie's Toronto office. David is a member of the Firm's North American Capital Markets Steering Committee and Global Inclusion, Diversity and Equity Committee. He serves as Chair of the Board of the You Can Play Project, a non-profit organization dedicated to ensuring the inclusion of all in sports. In 2023, David was named as one of Canada's Top 25 Most Influential Lawyers by Canadian Lawyer Magazine.

Author

Grace Kim-Cho is a member of the North America Corporate and Securities Group. Ms. Kim-Cho’s experience encompasses various public and private capital market transactions including public financings, private placements, corporate acquisitions and reorganizations on behalf of Canadian and international issuers and securities dealers.

Author

Amalan is an associate in Baker McKenzie's North American Transactional Practice Group in Toronto. He joined the Firm as an articling student in 2022 and was called to the Ontario Bar in 2023. During his articles, Amalan advised on several complex cross-border mergers and acquisitions, capital markets transactions and corporate governance matters.
In law school, Amalan graduated with Class 1 Distinction and was especially interested in international financial systems law and global investment banking law.
Prior to his legal studies, Amalan attended York University and graduated with an Honours Bachelor of Science Degree in Kinesiology and Health Science. His coursework was primarily concentrated in the fields of human physiology, biomechanics and mitochondrial disease.

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