The rights offering exemption has historically been an
underutilized means of raising capital for public issuers. This
exemption from the requirement to file a prospectus allows issuers
a method of financing whereby existing security holders of the
issuer are given the opportunity to acquire additional securities
at a discount from the market price, while security holders who do
not exercise their rights are generally compensated for the
resulting dilution through their ability to sell their rights.
Issuers' reluctance to utilize this exemption is commonly
attributed to: (a) a regulatory limit on the amount of financing
that can be carried out under the exemption; and (b) the lengthy
period of time required to obtain regulatory and exchange approval.
The Canadian Securities Administrators (CSA) indicated in a
November 27, 2014 notice that the average length of time to
complete a rights offering was 85 days. Furthermore, previous rules
stated that an issuer could not
