Regulators Provide Relief From Requirement For Canadian Wrapper

Executive Summary

Foreign companies offering securities to sophisticated investors in Canada through dealers may no longer need to provide specified Canadian disclosure to those investors.

Background

Currently, when foreign securities are offered to sophisticated investors in Canada on a private placement basis, specifically mandated Canadian disclosure is required to be included directly in any offering memorandum or in a related "wrapper" document that forms a part of the offering memorandum. 

In response to criticism that Canadian investors are being shut out of international offerings as foreign issuers seek to avoid the time and expense involved in preparing a wrapper, the Canadian Securities Administrators (CSA) recently took action to make it easier for foreign issuers to offer securities to sophisticated Canadian investors in private placement transactions.