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CSA Publish Additional Temporary Relief from Certain Regulatory Filings and Delivery Obligations Due to COVID-19
Practical Law Canada Legal Update w-025-6706 (Approx. 10 pages)
CSA Publish Additional Temporary Relief from Certain Regulatory Filings and Delivery Obligations Due to COVID-19
by Practical Law Canada Corporate & Securities
| Published on 22 May 2020 • Canada (Common Law) |
This Legal Update summarizes additional temporary relief from certain regulatory filings and delivery obligations due to COVID-19 published by the Canadian Securities Administrators (CSA) in May 2020.
CSA Publish Additional Temporary Relief Due to COVID-19
On May 20, 2020, the Canadian Securities Administrators (CSA) announced Temporary relief from certain regulatory filings available to investment funds and non-investment fund issuers due to COVID-19. These are granted through local blanket orders (Additional Blanket Orders) that provide investment funds and non-investment fund issuers with temporary relief (Temporary Relief) from certain regulatory filings and delivery obligations, as a result of the COVID-19 pandemic. The conditions of the Temporary Relief are substantially the same as the temporary relief announced on March 18, 2020 in Canadian securities regulators to provide blanket relief for market participants due to COVID-19 (Prior Relief) and effected by local blanket orders published March 23, 2020 in Canadian securities regulators publish blanket relief for market participants due to COVID-19 (Prior Blanket Orders), but the Temporary Relief is only applicable to issuers and investment funds with filing deadlines in the following specified periods:
- For investment funds, the Additional Blanket Orders provide a 60-day extension for certain filing, delivery and prospectus renewal obligations normally required to be made during the period from June 2, 2020 to September 30, 2020.
- For non-investment fund issuers, the Additional Blanket Orders provide a 45-day extension for certain filing, delivery and base shelf-prospectus renewal obligations normally due or required to be made during the period from June 2, 2020 to August 31, 2020.
For information on the Prior Relief granted by the Prior Blanket Orders, see the following Legal Updates:
Investment funds and non-investment fund issuers that have already used the Prior Relief granted by the Prior Blanket Orders to extend any filing, delivery and prospectus renewal deadline occurring on or before June 1, 2020 cannot use this Temporary Relief to further extend the deadline.
Additionally, to rely on the Temporary Relief, non-investment-fund issuers must issue a news release before the required filing deadline and comply with other conditions contained in the respective Additional Blanket Orders, which should be reviewed by counsel to ensure compliance with these conditions.
CSA members will consider applications for a management cease trade order (MCTO) by non-investment-fund issuers that took advantage of the Prior Relief and are unable to comply with their filing or delivery obligations by their extended deadline, but anticipate being able to comply shortly thereafter. CSA members will likely reduce the usual period of an MCTO to take into account the 45-day extension. An MCTO restricts certain officers and directors from trading and may be issued by a regulator instead of a failure-to-file cease trade order. Conditions for granting an MCTO are provided in National Policy 12-203 Management Cease Trade Orders (NP 12-203). If an MCTO is issued, the issuer must comply with alternative information guidelines, as provided in NP 12-203, until the required documents are filed. For more information on failure-to-file cease trade orders and MCTOs, see Practice Note, Revoking a Cease Trade Order for Failure to File Financial Statements.
The Additional Blanket Orders are substantially harmonized across the country.
The following Additional Blanket Orders with details of the temporary exemptions available to certain non-investment fund issuers as discussed above have 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 available |
Ontario | |
Prince Edward Island | |
Quebec |
|
Saskatchewan | |
Yukon |
The exemptions are all effective May 20, 2020 and expire on October 15, 2020.
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.
- 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.
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 during the period from June 2, 2020 to August 31, 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.