CSA Wants More Information on Exempt Distribution Reports


On August 13, 2015, the Canadian Securities Administrators (“CSA”) proposed a new form 45-106F1 (the “Proposed 45-106F1”), which would replace both the current form 45-106F1 required in all provinces and the form 45-106F6 currently required in British Columbia, both of which report on exempt distributions of securities. Exempt distributions include all sales of securities other than prospectus offerings. Currently, BC has a second required form, form 45-106F6, as this jurisdiction alone has required more detail and much more information about the issuer and the investors in any exempt distribution conducted in or from BC.

The Proposed 45-106F1 goes beyond either of the current exempt distribution report forms in respect of the detail required about the securities sale, including more information about the issuer, detailed information about the issuer’s directors and their security holdings in the issuer (including amounts paid for these securities), information about the securities sold and any offering materials used to sell them, compensation to any party paid in connection with the offering, details about the purchasers of the securities, and specific details about which part of a prospectus exemption was relied upon. For example, it would not be enough to state that a purchaser is an “accredited investor”, the Proposed 45-106F1 would require detail about which category of accredited investor each purchaser qualifies under.

If the Proposed 45-106F1 comes into force, BC would repeal form 45-106F6 so that in BC, like all other provinces, there would be only one exempt distribution report to file for each offering.

The CSA has asked for comments on Proposed 45-106F1 to be submitted by October 13, 2015. They have also posed specific questions for commenters, which can be found here.

If you have questions about exempt distribution reports, contact any member of Clark Wilson’s Corporate Finance & Securities Group.