In a move to boost companies’ ability to raise capital, the Canadian Securities Administrators (CSA) is increasing the limits on the listed issuer financing exemption.
In a series of blanket orders, the CSA is expanding an exemption adopted in November 2022 that allows listed companies to raise capital under their existing regulatory disclosure filings.
Previously, companies were limited to raising $5 million, or 10% of their market cap, with a maximum of $10 million over a 12-month period. The new limits are $25 million, or 20% of market cap, up to $50 million over 12 months.
“This change reflects our ongoing work to support the Canadian capital markets and make it more efficient and cost-effective for companies to raise capital and grow in Canada,” Stan Magidson, CSA chair and chair and CEO of the Alberta Securities Commission, said in a release.
The regulators are also revising how shareholder dilution limits are calculated under the exemption.
“Increasing the capital-raising limits, while adding more conditions on who an issuer can distribute securities to, will allow listed reporting issuers to raise significantly more capital without impacting investor protection,” the CSA said in a notice.
Since the exemption was introduced, 270 issuers have used it to raise over $1 billion, but the initial limits were seen as a constraint.
The changes follow recent CSA initiatives to ease capital-raising rules, including blanket orders issued last month to simplify certain filing requirements and facilitate going public.
“We are committed to a Canadian regulatory environment that is responsive to the changing needs of market participants, while upholding strong investor protections,” Magidson said.