On April 17, 2025, the Canadian Securities Administrators (CSA) announced coordinated blanket orders (the orders), effective the same day, aimed at increasing the competitiveness of Canada’s capital markets.
The orders offer issuers greater flexibility to raise funds within the year following an IPO and eliminate certain historical financial statement requirements for companies going public, thereby reducing the costs associated with financial disclosure.
This significant development is in response to the CSA’s recognition of “the current uncertainty in global markets, and the impact this is having on companies and investors’ decisions to participate in Canadian capital markets.”[1]
The orders include:
Prospectus Exemption for Subsequent Financings
- A prospectus exemption for companies that will be going or have recently gone public in Canada through an underwritten IPO.
- The aim is to provide new reporting issuers (other than investment funds) greater flexibility to raise additional capital following an IPO (provided certain conditions are met). Specifically, within the 12 month period after a receipt is issued for a final long form IPO prospectus for an underwritten offering, the issuer may, in total, distribute up to the lesser of $100,000,000 or 20% of the aggregate market value of the issuer’s listed equity securities[2]on a prospectus exempt basis, subject to certain requirements, including restrictions on the use of proceeds. The issuer would be required to file a news release and an offering document with certain prescribed information.
- An exemption from promoter certificates in a prospectus where the promoter has already signed a certificate in another capacity.
Three-Year Financial Statements
- An expansion to all companies of the existing exemption from the requirement to provide audited financial statements for the third most recently completed financial year in connection with IPOs, restructuring transactions and bids.
- The aim is to make it more cost-effective for issuers to go public in Canada through an IPO prospectus. Historically, only IPO venture issuers and issuers that are already reporting issuers did not have to provide a third year of financial statements. Expanding this exemption to all issuers and offerors reflects evolving market expectations and that most issuers in comparable jurisdictions do not have the same requirement. This exemption is also extended to circulars and material change reports that require prospectus level disclosure.[3]
Standard Term Sheets and Marketing Materials
- The orders allow marketing materials and standard term sheets issued during the prospectus waiting period to include pricing information without having to file an amended preliminary prospectus to disclose pricing. The orders stipulate that before an investment dealer provides potential investors with the standard term sheet or marketing materials containing pricing information, the issuer must file a news release containing the pricing information. As the “waiting period” is the time between (i) the filing of, and issuance of a receipt for, a preliminary prospectus, and (ii) the filing of, and issuance of a receipt for, a final prospectus, the orders obviate the need for the filing of an amended and restated preliminary prospectus in order to provide pricing information as long as (a) the pricing information is provided in the news release, and (b) there is no additional material fact that must be disclosed.
Additional Amendments
- An increase in the investment limit in the offering memorandum exemption to allow for reinvestment of proceeds within a 12-month period (for certain eligible investors, and subject to certain conditions).[4]
- The aim is to increase capital raising opportunities for issuers and allow investors to participate in more financing opportunities. The offering memorandum exemption includes a $100,000 investment limit for “eligible investors” who do not qualify as an “accredited investor” or under the “family, friends and business associates” exemption if the investor receives suitability advice from a registered dealer or adviser. The order provides an exemption from the 12 month $100,000 limit, such that a re-investment of proceeds of disposition of an investment in the same issuer up to a maximum of $100,000 does not count towards the limit, subject to receipt of suitability advice.
- An exemption from promoter certificates in a prospectus where the promoter has already signed a certificate in another capacity.
Concluding Comments
Overall, the orders aim to make it “easier and more cost-effective for businesses to raise capital and grow in Canada”. The CSA is also continuing to explore “other opportunities to further support businesses and investors across Canada’s capital markets.” The orders are available here.
Fasken’s Capital Markets and IPO Thought Leadership
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