US-Canada Cross-Border Securities Law Toolkit | Practical Law

US-Canada Cross-Border Securities Law Toolkit | Practical Law

US legal resources designed to assist Canadian issuers and their underwriters, initial purchasers, placement agents, selling securityholders, and counsel in conducting offerings in the United States and in complying with other US securities law requirements, including US periodic reporting and disclosure obligations.

US-Canada Cross-Border Securities Law Toolkit

Practical Law Toolkit w-034-3284 (Approx. 12 pages)

US-Canada Cross-Border Securities Law Toolkit

by Practical Law Corporate & Securities
MaintainedUSA (National/Federal)
US legal resources designed to assist Canadian issuers and their underwriters, initial purchasers, placement agents, selling securityholders, and counsel in conducting offerings in the United States and in complying with other US securities law requirements, including US periodic reporting and disclosure obligations.
Due to the highly-integrated nature of the US and Canadian economies and capital markets, many Canadian issuers, underwriters, initial purchasers, placement agents, selling securityholders, and other market participants are directly or indirectly subject to the US securities laws, including those relating to:
  • Registered and unregistered securities offerings.
  • Periodic reporting and disclosure obligations.
  • Auditing and financial reporting.
  • Beneficial ownership reporting.
  • Corporate governance.
  • Securities exchange rules.
  • Financial and market regulation.
Under US securities laws, companies that are foreign private issuers (FPIs) may elect to rely on special accommodations included in Securities and Exchange Commission (SEC) rules and regulations that reduce the reporting burdens on FPIs for both securities offerings and periodic reporting.
However, certain Canadian companies may rely on an additional set of special accommodations included in the multijurisdictional disclosure system (MJDS), which is a mutual recognition regime between the SEC and Canadian provincial securities regulators designed to reduce the barriers to cross-border financings between Canada and the United States.
The MJDS permits eligible:
  • Canadian issuers:
    • to publicly offer securities in the United States by using a prospectus that is prepared principally in accordance with Canadian disclosure requirements (otherwise known as "Southbound MJDS"); and
    • who become subject to US periodic reporting obligations to substantially satisfy those obligations by using their Canadian continuous disclosure documents under the cover of the applicable SEC form.
  • US issuers to offer securities into Canada without Canadian regulatory review (otherwise known as "Northbound MJDS").
Furthermore, the MJDS permits persons making a tender offer (including, in certain circumstances, an issuer tender offer) for the securities of certain Canadian companies registered under the Securities Exchange Act of 1934 and the target companies in such tender offers to use the equivalent Canadian tender offer documents (supplemented by short SEC wraparound forms) instead of the applicable SEC forms to commence and respond to the tender offer.
This Toolkit includes links to resources designed to assist Canadian issuers and their underwriters, initial purchasers, placement agents, selling securityholders, and counsel in:
  • Conducting securities offerings in the United States.
  • Complying with US rules and regulations relating to:
    • periodic reporting and disclosure obligations;
    • auditing and financial reporting requirements;
    • corporate governance;
    • securities exchange rules; and
    • financial and market regulation.
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