(October 17 – 09:30 ET) – The Ontario Securities Commission has published a series of rules reformulating the requirements for prospectus disclosure.
On October 13 the OSC sent a final rule dealing with Short Form Prospectus Distributions, National Instrument 44-101, to the finance minister for final approval. The rule is slated to become effective on December 31, replacing National Policy No. 47.
The new rule prescribes conditions for the use of a short form prospectus to distribute securities to the public. The OSC says the new system, and the more concise offering document, were designed to enable qualifying issuers to respond more quickly to market opportunities without diminishing the information and protection available to investors.
The new rule preserves the substance of NP 47 but is intended to better serve the original objectives of the Canadian Securities Administrators through clarifying and simplifying important aspects of the system, broadening access to the system and modifying disclosure and other requirements.
The OSC has also delivered National Instrument 41-101 dealing with Prospectus Disclosure Requirements to the minister. This rule would also take effect at year end. The rule consolidates the prospectus disclosure requirements currently set out in National Policy Nos. 12, 13, 32 and 35. While the rules remain substantially the same, they have been simplified.
Finally, the OSC has created Rule 54-501 Prospectus Disclosure in Certain Information Circulars, reformulating OSC Policy 5.1. The rule requires that information circulars sent to holders of voting securities to consider a transaction must contain prospectus disclosure. This includes a financial statement and other material disclosure that is required to be included in a prospectus if the transaction results in the acquisition of a business.
This overhaul of the prospectus regime comes as the CSA tries to shift the focus of corporate disclosure from the prospectus to more comprehensive continuous disclosure.
-IE Staff