Keep It Between Us: Canadian Securities Regulators Adopt Confidential Prospectus Review Process

Canadian public issuers and those issuers contemplating a Canadian IPO may now file a prospectus for review by securities regulators' staff on a confidential basis. Under this new process, an issuer may submit a near-final draft preliminary prospectus to its principal securities regulator without signalling the prospective offering to the market through a public filing. Under the cover of the confidential filing, the issuer will be able to work with staff to resolve regulatory issues related to the offering.

As noted in our recent bulletin, this confidential review process is one of many burden-reducing initiatives being pursued by Canada's securities regulators. It was strongly advocated by Davies (most recently in its comment letter on burden-reduction initiatives of the Ontario Securities Commission) on the basis that it would significantly reduce the potential for delay and uncertainty, and therefore execution risk, resulting from the prospectus review process.