Quick overview of the exemptions
- All issuers filing IPO prospectuses, circulars or material change reports will now be exempt from the requirement to include audited annual financial statements and operating statements for the third most recently completed financial year, an exemption that was previously only available for IPO venture issuers.
- During the waiting period between the issuance of the receipt for the preliminary prospectus and the final prospectus, issuers may now include information regarding prices, total numbers and total dollar amounts of offered securities in marketing materials and standard term sheets without first disclosing the information in the preliminary prospectus.
- Issuers may exclude promoter certificates from a prospectus if the promoter signs a certificate to the prospectus in another capacity.
- Within 12 months after the issuance of a receipt in respect of a final long-form IPO prospectus, an issuer may distribute up to the lesser of $100 million of additional capital (subject to certain conditions) and 20% of the aggregate market value of the issuer’s equity securities.
- In certain jurisdictions and subject to certain limits, individual investors who do not meet the definition of “accredited investor” are able to reinvest proceeds in the same issuer.
Blanket Order 41-930 – Exemptions From Certain Prospectus And Disclosure Requirements
The first of the Blanket Orders, Blanket Order 41-930, includes three core exemptions:
- Relief from third-year financial statements
- Enhanced flexibility during the waiting period
- Exemption from promoter certificate requirements
Together these Blanket Orders are expected to reduce costs associated with long-form prospectus offerings and streamline other disclosure requirements.
Exemptions for third-year historical financial statements
Historically, Form 41-101F1 – Information Required in a Prospectus required issuers to disclose historical financial and operating statements for the three most recently completed financial years, with exemptions granted to IPO venture issuers and pre-existing reporting issuers. However, under Blanket Order 41-930 all issuers are now exempt from this requirement. This exemption is applicable not just to IPO prospectuses but also extends to certain other documents and transactions that directly or indirectly reference prospectus requirements, such as circulars and material change reports.
While issuers and offerors are still required to provide other mandatory disclosures related to the third most recently completed financial year, this exemption is intended to reduce certain filing and auditing costs and timing considerations that were previously imposed on issuers.
Exemptions for standard term sheets and marketing materials during waiting periods
During the waiting period between the issuance of a receipt for the preliminary prospectus and the final prospectus, issuers have historically been restricted from providing certain marketing materials containing information on price and deal size without first filing an amended preliminary prospectus.
Under Blanket Order 41-930, issuers are now able to provide standard term sheets and marketing materials that include the price, number and total dollar amount of the offered securities and various other deal size information, provided that they issue and file a news release of this information well in advance. In addition, for this exemption to apply, the CSA has noted that all other information in the marketing materials must be derived from the preliminary prospectus. This exemption is expected to provide greater flexibility and deal certainty, allowing them to avoid the additional costs associated with filing amended preliminary prospectus for this purpose.
Exemptions for promoter certificates
Lastly, under Blanket Order 41-930, issuers are also now exempt from providing a promoter certificate in situations where the promoter is an individual that signs a certificate in a capacity other than a promoter, such as a director or officer. In certain jurisdictions, such as Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick and Nova Scotia, issuers are also exempt from providing a promoter certificate if:
- They have been a reporting issuer for at least 24 months
- The promoter is not a director, officer or control person
- The prospectus does not qualify the distribution of an asset-backed security
Similar to the rationale provided above, the CSA recognizes that by providing this exemption, issuers are able to eliminate the time and cost associated with routine exemptive relief applications, particularly when promoters already have the same statutory liability when signing the prospectus in another capacity.
Blanket Order 45-930 – Exemptions For New Reporting Issuers
The second Blanket Order, Blanket Order 45-930, provides for a prospectus exemption to new reporting issuers for 12 months after having gone public through an underwritten IPO, subject to certain conditions. Under this order, such issuers may distribute up the lesser of $100 million and 20% of the aggregate market value of the issuer’s listed equity securities as of the date the issuer issued a news release announcing the first offering in reliance on the exemption in the order. The securities distributed under the new reporting issuer Blanket Order must be of the same class qualified under the IPO prospectus and the price offered per security must not be less than the price per security distributed under the IPO prospectus.
Before soliciting an offer, the issuer must also have filed a news release and an offering document on SEDAR+.
The offering document must include certain information, such as:
- The details of the offering
- Disclosure of any material facts relating to the securities
- A description of the issuer’s business objectives
- Disclosure of the issuer’s recent developments and intended use of proceeds from the offering
- A contractual right to cancel the agreement to purchase the securities within two days of the purchase
- A contractual right of recission or action for damages in situations where there is a misrepresentation in the offering documents or certain other documents
Additional disclosures may be required by non-venture issuers if the proceeds from the distribution are being allocated to recently completed or probable significant acquisitions.
This exemption will also not apply for restructuring transactions, transactions that require shareholder approval and transactions by venture issuers for acquisitions that would be significant acquisitions.
Under Blanket Order 45-930, issuers are required to continue filing all mandatory periodic and timely disclosure documents and must cease the distribution if a material change occurs. As stated by CSA, this exemption aims to provide issuers with greater, more flexible and more efficient capital raising opportunities while still ensuring that investors are adequately protected.
Blanket Order 45-933 – The Offering Memorandum Blanket Order
The third Blanket Order, Blanket Order 45-933, was implemented by participating jurisdictions following feedback from stakeholders. Blanket Order 45-933 is intended to increase capital-raising opportunities for issuers and also allow investors to participate in greater market opportunities.
Prior to Blanket Order 45-933, the offering memorandum exemption included certain investment limits for investors that did not meet the definition of “accredited investor.” For example, the exemption included a 12-month $100,000 investment limit if the investor receives advice from a registered dealer or registered adviser. Under Blanket Order 45-933, individual investors are able to get an exemption from this limit and reinvest proceeds in the same issuer, provided that they receive advice from a registered dealer or adviser that the investment is suitable for the investor. In certain jurisdictions, such as Ontario and Nova Scotia, the issuer must also provide written notice within 10 days of the distribution.
Implications of the Blanket Orders
The introduction of the Blanket Orders is designed to enhance Canadian capital markets and allow for more efficient and flexible capital raising opportunities for issuers, while still protecting investors. Additionally, Blanket Order 45-933 also provides attractive benefits to individual investors, allowing them to participate in more market opportunities. The newly introduced Blanket Orders came into effect on April 17, 2025, and will be effective across all jurisdictions – subject to certain expiry dates based on term limits for Blanket Orders in certain jurisdictions – unless extended by the respective commissions.
This article was prepared with the assistance of summer articling student Rojan Askar-pour.
Note: This article is of a general nature only and is not exhaustive of all possible legal rights or remedies. In addition, laws may change over time and should be interpreted only in the context of particular circumstances such that these materials are not intended to be relied upon or taken as legal advice or opinion. Readers should consult a legal professional for specific advice in any particular situation.
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