compliance solutions rubber stamp

As part of ongoing efforts to curb needless regulatory burdens, the Canadian Securities Administrators (CSA) are adopting rules that will enable issuers to raise capital in “at-the-market” (ATM) distributions without first seeking certain exemptions.

The CSA published regulatory amendments intended to save companies time and cost when carrying out ATM distributions by eliminating the need to obtain relief from prospectus delivery requirements, and other provisions.

“The amendments facilitate distributions without having an adverse impact on investor protection,” said Louis Morisset, chair of the CSA and president and CEO of the Autorité des marchés financiers.

“They also give issuers a faster and more cost-effective way to raise capital, which may be substantially beneficial to them particularly during the Covid-19 pandemic,” he said.

Scrapping the requirement that issuers apply for relief that is routinely granted will save compliance costs for issuers, as well as investment dealers and exchanges, the CSA noted.

At the same time, the CSA said in its notice that it will watch for possible abuses of the new rules.

“We intend to monitor ATM distributions, focusing on distributions that may have had a material impact on the price of the issuer’s securities where the distribution was not publicly disclosed prior to it being made,” it said.

While the measures are targeted at corporate issuers, the regulators said non-redeemable investment funds and exchange-traded mutual funds that are not in continuous distribution will also be able to rely on the amendments.

Pending approval from the various provinces, the amendments will take effect Aug. 31.