The Canadian Securities Administrators (the CSA) have announced
amendments to the rules governing rights offerings in Canada. The
amendments are intended to streamline the conduct of
prospectus-exempt rights offerings, and are scheduled to take
effect on December 8, 2015. The impact of the
amendments could be significant and merits close attention.
Background
A rights offering is a financing method that gives an
issuer's securityholders rights to buy additional securities
from treasury. Rights offerings afford securityholders the ability
to maintain their pro rata interest in the issuer, and are
therefore considered to be an inherently fair means of raising
capital. Rights offerings are common in many jurisdictions, but
historically have been under-utilized in Canada where they are
widely seen as a financing structure of last resort. The new
amendments are aimed primarily at increasing the efficiency of
rights offerings, with a view to increasing their frequency
