Timely Disclosure recently reported on the CSA’s previously announced and published local blanket orders (Blanket Orders) that provide a 45-day extension for periodic filings normally required to be made by market participants between March 23, 2020 and June 1, 2020. On April 3, 2020, the Canadian Securities Administrators (CSA) released CSA Staff Notice 51-360 (Staff Notice) which includes useful guidance for market participants wishing to avail themselves of the relief provided by the Blanket Orders.

The following is a summary of certain of the guidance in the Staff Notice. It is important for issuers to review the local Blanket Orders in their jurisdiction. Issuers who intend to rely on the exemptions in the Blanket Orders should consider their applicable corporate statute, stock exchange requirements and other obligations to provide disclosure materials, including financial statements under any existing contractual obligations, as well as the events of default, covenants and other terms of any contracts including debt instruments. Issuers should also review their ongoing corporate finance activities when considering reliance on the Blanket Orders.

Corporate Finance

The Blanket Orders provide, among other things a 45-day extension from the deadlines for the following filings required to be made between March 23, 2020 and June 1, 2020 (Filing or Delivery Exemption):

  • with respect to National Instrument 51-102 Continuous Disclosure Obligations, (i) annual and interim financial statements, (ii) management’s discussion & analysis, (iii) annual information form, (iv) executive compensation disclosure, (v) the sending of an annual request form required by subsection 4.6(1), and (vi) the delivery of annual financial statements required by subsection 4.6(3) and (5) and management’s discussion & analysis required by subsection 5.6(1) and (3);
  • a statement of reserves data and other information under National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities; and
  • a technical report under National Instrument 43-101 Standards of Disclosure for Mineral Projects.

The relief extends to similar annual or interim disclosure documents of a reporting issuer required pursuant to an exemption from one of the requirements listed above included in an exemptive relief decision made by a securities regulatory authority or regulator prior to the date of the Blanket Orders.

The Staff Notice clarifies that:

  • if an issuer uses the Filing or Delivery Exemption, the condition that an issuer cannot file a preliminary or final prospectus unless their continuous disclosure record is current also applies to: (i) renewal of a base shelf prospectus, (ii) a non-offering prospectus, (iii) an amended and restated prospectus, (iv) a PREP prospectus, (v) an amendment to a final prospectus, or (vi) the filing of a prospectus supplement under an existing base shelf prospectus; and
  • if reliance on the Filing or Delivery Exemption in the Blanket Orders means that an issuer, its management or insiders are in possession of material undisclosed information, the CSA expects the issuer to suspend any normal course issuer bids that are in operation (except where an automatic securities purchase plan has previously been established and is operative).

With respect to corporate finance matters generally, the Staff Notice also clarifies the following:

  • the 90 day deadline to file an amendment to a preliminary prospectus after the date of the receipt for the preliminary prospectus, and the 180 day deadline to file a final prospectus from the date of the receipt for the preliminary prospectus, set out in section 2.3 of National Instrument 41-101 General Prospectus Requirements, are not impacted by the Blanket Orders;
  • the Staff Notice suggests that an issuer that wishes to rely on the Blanket Orders should cease any ongoing best-efforts distribution by way of prospectus;
  • an issuer that has relied on the offering memorandum exemption in section 2.9 of National Instrument 45-106 Prospectus Exemptions (NI 45-106) to distribute securities in Ontario, Alberta, Saskatchewan, Québec, Nova Scotia and New Brunswick may want to review the Blanket Orders in those jurisdictions to ensure that the issuer is complying with the exemptions from those requirements, as they vary between jurisdiction;
  • the Blanket Orders do not provide relief from the requirement to file a report of exempt distribution or provide an extension for the filing of same under NI 45-106; and
  • the Blanket Orders do not provide an extension period for insider reports, including those related to compensation plans.

Annual General Meetings

Timely Disclosure also recently reported that the Toronto Stock Exchange (TSX) and TSX Venture Exchange (TSXV) have granted temporary blanket relief to listed issuers in response to the COVID-19 pandemic, allowing them, among other things, to delay their 2020 annual meetings to as late as December 31, 2020. The general TSX requirement is that an annual meeting be held within six months of fiscal year end, while the requirement of the TSXV is that a listed issuer hold an annual meeting not more than 15 months after its last annual meeting.

The Staff Notice explains that the Blanket Orders do not contemplate a deadline extension for the filing, sending or delivery of management information circulars or proxy materials for a meeting of securityholders, but acknowledged that the CSA is considering the interplay between the Blanket Order and a delay of an annual general meeting and whether further relief or extensions are necessary. Regardless of any further relief from the CSA, issuers should review their applicable corporate law or other governing statutes and any exemptions or guidance provided by the corporate law regulator or equivalent in the applicable jurisdiction. Fasken resources that may be helpful to issuers in this regard include:

Additional Fasken resources that may also be helpful to issuers include: