A rights offering is a granting of subscription rights to
existing security holders of an issuer. The issuer raises capital
when the subscription rights are exercised. As rights offerings
constitute a distribution under securities laws, unless an
exemption is available, issuers must undertake the offering by way
of a prospectus. The Canadian Securities Administrators (the
"CSA") have noted that a rights offering
can be "one of the fairer ways for issuers to raise capital as
they provide existing security holders with an opportunity to
protect themselves from dilution."
Thus, in seeking to encourage rights offerings, the CSA has
provided notice of amendments that streamline the process for
certain prospectus-exempt rights offerings (the
"Amendments"). The Amendments, which
will come into force on December 8, 2015, repeal National
Instrument 45-101 Rights Offerings ("NI
45-101") and amend the current prospectus exemption
in National Instrument 45- 106 Prospectus
