Two recent initiatives of the Canadian securities regulators
address the need for reporting issuers to raise capital from
existing shareholders cost-effectively.
The first initiative is a Canadian Securities Administrators
(the CSA) proposal to amend the rights offering regime to decrease
the cost and time involved in undertaking a rights offering in the
exempt market. The second development introduces in Ontario a new
prospectus exemption that will allow reporting issuers, other than
investment funds, to raise money from existing shareholders.
Rights Offerings Prospectus Exemption. The CSA is
proposing amendments to the rights offering regime. The proposals
will create a national prospectus exemption for rights offerings
made by reporting issuers, other than investment funds. The purpose
of the new exemption is to reduce the time and costs associated
with rights offerings thereby making them a more attractive
financing option for reporting issuers. The key
