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CSA Publish Temporary Exemptions from Certain Corporate Finance Requirements Due to COVID-19
Practical Law Canada Legal Update w-024-6924 (Approx. 9 pages)
CSA Publish Temporary Exemptions from Certain Corporate Finance Requirements Due to COVID-19
by Practical Law Canada Corporate & Securities
| Published on 27 Mar 2020 • Canada (Common Law) |
This Legal Update summarizes temporary exemptions from certain corporate finance requirements due to COVID-19 published by the Canadian Securities Administrators (CSA) in March 2020.
CSA Publish Temporary Relief Due to COVID-19
On March 18, 2020, the Canadian Securities Administrators (CSA) announced Canadian securities regulators to provide blanket relief for market participants due to COVID-19, by allowing a 45-day extension for periodic filings normally required to be made by issuers, investment funds, registrants, certain regulated entities and designated rating organizations on or before June 1, 2020 (Temporary Relief) as discussed in our Legal Update, CSA Provides Guidance on Disclosure and Annual General Meetings Affected by COVID-19.
The details of the temporary exemptions from certain corporate finance requirements due to COVID-19 have now been published by members of the CSA:
Jurisdiction | Blanket Order |
Alberta | |
British Columbia | |
Manitoba | |
New Brunswick | |
Newfoundland and Labrador | |
Northwest Territories | |
Nova Scotia | |
Nunavut | Not yet published |
Ontario | |
Prince Edward Island | |
Quebec | |
Saskatchewan | |
Yukon |
The exemptions are all effective March 23, 2020 for a period of 120 days.
Periodic Filings
The Temporary Relief applies to periodic filings that include the following:
- Annual and interim financial statements.
- Management’s discussion and analysis (Part 1, section (a) and Part 2, section 1.2, Instruction (iii), section 1.3, section 1.4(g), section 1.5, Instruction (v), section 1.6(d), section 1.6(h), section 1.6, Instruction (ii), section 1.8, Instruction (ii), section 1.14 (b), section 1.14 (c), and Instruction (iii) and section 2.2.1, Form 51-102F1 - Management's Discussion & Analysis (Form 51-102F1)). For more information, see Practice Note, Management's Discussion and Analysis (MD&A).
- Annual information forms (AIFs) (Part 1, section (a) and Part 2, section 1.2, Instruction (iii), section 5.2, section 7.3(e), Form 51-102F2 - Annual Information Form (Form 51-102F2)). For more information, see Practice Note, Annual Information Form.
- Management reports of fund performance.
- Technical reports. For more information, see Practice Note, Standards of Disclosure for Mineral Projects.
In order to rely on the Temporary Relief in connection with these interim filings, a person or company must issue a news release both before and after the applicable filing deadlines.
Pre-Deadline News Release
The issuer must issue, and file on the System for Electronic Document Analysis and Retrieval (SEDAR) as soon as reasonably practicable, a news release in advance of the applicable filing deadline disclosing:
- The filings relying upon the Temporary Relief.
- The estimated day by which the disclosure is expected to be filed, delivered or sent.
- An update of any material business developments since the issuer’s last financial statements were filed (or confirmation that there have been no material business developments since such date).
- That management and other insiders are subject to an insider trading black-out policy that reflects the principles in section 9 of National Policy 11-207 Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions.
For more information on failure-to-file cease trade orders, see Practice Note, Revoking a Cease Trade Order for Failure to File Financial Statements.
Post-Deadline News Release
No later than 30 days following the date a filing was required to be made, the issuer must issue, and file on SEDAR, a news release providing an update on any material business developments since the date of the pre-deadline news release (or confirmation that there have been no material business developments since such date). A subsequent news release containing similar disclosure about material business developments must also be filed no later than 30 days following the prior news release if the applicable filings have not yet been made.
Restriction on Prospectus Filing
Issuers relying on the Temporary Relief may not file a prospectus for an offering of securities until all documents filed in reliance on the Temporary Relief are filed.
Timing of Filings
Annual financial statements and annual MD&A must be delivered before, or in conjunction with, the delivery of the issuer’s management information circular for its next annual meeting of securityholders.
No Management Cease-Trade Orders
Issuers choosing to rely on the Temporary Relief and that are complying with the conditions of the Temporary Relief will not need to file applications for management cease-trade orders (MCTOs) as they will not be noted in default.
Annual Filing by Designated Rating Organizations
The Temporary Relief applies to the annual filing of designated rating organizations required under National Instrument 25-101 - Designated Rating Organizations. The designated rating organization must issue a news release in advance of the filing deadline, which must provide a brief discussion of any information in the previous annual filing that is now materially inaccurate or include confirmation that no such information is materially inaccurate. The designated rating organization is not required to file the news release on SEDAR provided the designated rating organization sends the news release to the securities regulatory authority that was its principal regulator for the purposes of its designation as a designated rating organization.
Event-Driven Filings
This Temporary Relief may apply to event-driven filings that include the following:
- Business acquisition reports. For more information, see Practice Note, Business Acquisition Reports.
- Change of auditor reporting.
- Notice of change in year end.
- Notice of change in corporate structure.
The issuer must issue and file on SEDAR as soon as reasonably practicable, a news release in advance of the filing deadline that discloses each requirement for which it is relying on the Temporary Relief.
Exempt Offering Filings
The Temporary Relief applies to the following filings in connection with offerings exempt from the prospectus requirement:
- Annual financial statements required to be filed in connection with the offering memorandum exemption in New Brunswick, Ontario, Quebec and Saskatchewan.
- Annual financial statements and annual disclosure of use of proceeds required under Multilateral Instrument 45-108 - Crowdfunding.
The issuer must issue and file on SEDAR a news release in advance of the filing deadline.
For information on exempt offerings, see Practice Note, Private Placement Offerings in Canada: Overview.
For information on crowdfunding, see Practice Note, Equity Crowdfunding in Canada.
Base Shelf Prospectuses
The lapse date for a final base shelf prospectus that is set to lapse before June 1, 2020 may be extended by an additional 45 days provided that the issuer issues and files on SEDAR a news release in advance of the lapse date and that the issuer is not or is no longer relying on the Temporary Relief in connection with periodic filings.
For information on shelf prospectuses, see Practice Note, Shelf Prospectus Offerings in Canada: Overview.