Securities Regulators Reduce Friction For Capital Raising With Incremental Changes To Prospectus Rules

Overview

Canadian securities regulators recently implemented three blanket orders introducing exemptions intended to reduce friction for capital raising. Key among these improvements is an exemption that eliminates the requirement for a third year of annual financial statements in an initial public offering (IPO) prospectus.

The exemptions also

• limit the circumstances in which "promoters" must sign a separate certificate to a prospectus;
• rectify a misalignment between the marketing rules and market practice for communicating changes to deal size or price range in an IPO;
• implement a new exemption allowing an issuer to raise a limited amount of capital without a prospectus for 12 months following its IPO; and