At-the-market offerings
Canadian rules governing at-the-market offerings may soon be
streamlined in a manner that would facilitate both Canada-only and
Canada-U.S. ATM offerings. ATM offerings involve an issuer selling
securities from time-to-time at prevailing market prices on a stock
exchange. Under the existing Canadian regime, issuers wishing to
conduct ATM offerings must obtain exemptive relief from securities
regulators because certain Canadian public offering requirements
are incompatible with ATM offerings, e.g., the requirement to
physically deliver a prospectus to investors disclosing the rights
and remedies available if the document contains a
misrepresentation. The exemptive relief orders generally require
the number of equity securities sold per trading day not to exceed
25% of the total trading volume. Moreover, the maximum amount that
may be sold in an ATM offering in Canada is 10% of the market value
of the issuer's outstanding equity securities.
