CSA Proposes Harmonized Exempt Distribution Reports


On August 13, 2015, the Canadian Securities Administrators published for comment proposed amendments to National Instrument 45-106 Prospectus Exemptions that would harmonize the exempt distribution reports that an issuer must file. An issuers must file these reports with the securities commissions after it completes a private placement. Currently, British Columbia requires issuers to use a different form, which requires more information than the other provinces. The proposed harmonized form goes even farther than the British Columbia form and requires information such as the industry of the issuer, the number of employees of the issuer, the residential address of each of the insiders of the issuer (which is filed on a confidential schedule), the size of the issuer’s assets, and the date of formation of the issuer. Also, if the distribution has occurred in Saskatchewan, Ontario, Québec, New Brunswick or Nova Scotia, the proposed form requires the issuer to list all offering materials that are required to be filed with the securities regulators in those jurisdictions. The proposed form also requires the issuer to use standard codes for certain items, which should allow the securities commission to better analyze the data in the forms. While a harmonized form is a welcomed change, the additional required information will increase the burden on issuers when completing these forms.

The 60 day comment period ends on October 13, 2015.