In their latest effort to cut needless red tape and support capital raising, Canadian securities regulators are adopting a new prospectus regime that aims to make it faster and cheaper for large, established companies to raise capital.
The Canadian Securities Administrators (CSA) published rule changes on Thursday to introduce an expedited shelf prospectus regime for so-called “well-known seasoned issuers” (WKSIs) — which will allow these companies to raise capital without undergoing fresh regulatory reviews.
“The amendments aim to reduce unnecessary regulatory burden for issuers that are well-known reporting issuers, have a strong market following, complete public disclosure record and sufficient public equity or debt,” the regulators said in a notice laying out the new regime.
Among other things, the new regime aims to give issuers more flexibility in structuring offerings, to provide greater certainty on transaction timing, and it relieves them from meeting certain requirements that don’t provide meaningful disclosure to investors.
Additionally, the amendments will facilitate cross-border offerings by more closely aligning the timing of Canadian and U.S. prospectus filings.
The CSA first published proposals in this area back in September 2023, following a consultation that called for reforming the prospectus rules for large, established issuers; and, in its final report in 2021, Ontario’s Capital Markets Modernization Taskforce also recommended the introduction of the WKSI model to facilitate more cost-efficient capital formation.
In late 2021, the regulators adopted temporary exemptions allowing WKSIs to obtain prospectus receipts on an accelerated basis. Today’s changes will introduce a more permanent regime.
“Incorporating feedback received from market participants, the WKSI regime makes it more efficient for well-known issuers with a strong market following and complete continuous disclosure record to access capital in Canada,” said Stan Magidson, chair of the CSA and chair and CEO of the Alberta Securities Commission (ASC), in a release.
“These amendments foster capital raising and support the competitiveness of Canadian markets by reducing the regulatory burden for eligible issuers,” he added.
The CSA said that it’s expected the new regime will take effect on Nov. 28.