Changes to Canada’s Short Form Prospectus System

Canada’s securities regulators have finalized changes to the short form prospectus system, which will be effective for short form prospectuses filed on or after December 30, 2005. The premarketing period has been extended, eligibility requirements have been relaxed and the content requirements for the short form prospectus have been rationalized and harmonized with the continuous disclosure obligations. With regular continuous disclosure reviews, the regulators believe that the short form prospectus system can be relaxed without diminishing investor protection.

The most important change for an issuer that is currently eligible to use the short form prospectus system is the extension of time for filing a preliminary prospectus in a bought deal. Under the new rule, an issuer must file a preliminary prospectus within four business days (rather than two business days) after entering into an underwriting agreement.