On Wednesday, May 20, 2020, the Canadian Securities
Administrator (CSA) announced additional temporary
relief for non-investment fund issuers from certain regulatory
filings to be made on or between June 2, 2020 and August 31, 2020
as a result of the COVID-19 outbreak (the May
Relief) through blanket orders in each of the provinces
and territories which are substantially harmonized throughout the
country (collectively, the May Blanket Orders).
The relief is substantially similar to the temporary relief
announced by the CSA on March 23, 2020 (the March
Relief) in relation to filings to be made on or between
March 23, 2020 and June 1, 2020.
An issuer who relied on the March Relief to extend one or more
of its periodic filings normally required to be made on or between
March 23, 2020 and June 1, 2020 cannot rely on the May Relief as a
further extension for those already extended deadlines under the
March Relief. Issuers are reminded that the May Relief is only
applicable to those filings ordinarily required to be made on or
between June 2, 2020 and August 31, 2020. The CSA will consider an
application made by a non-investment fund issuer for a management
cease trade order (MCTO) if such issuer relied on
the March Relief and is unable to complete certain filings by their
extended deadline, but anticipates being able to complete such
filings shortly thereafter. In considering such application, the
CSA may reduce the usual time period for a MCTO to take into
account the 45-day extension. A summary of the May Blanket Order
issued by the Alberta Securities Commission in respect of
non-investment fund issuers, and also the CSA’s views on
certain questions provided by reporting issuers related to the
March Relief, as updated, is as follows:
General relief: A 45 day extension (the
extension period) is granted for periodic filings normally required
to be made during the period from June 2, 2020 to August 31, 2020,
including financial statements, management’s discussion and
analysis (MD&A), annual information forms
(AIFs), technical reports, and certain other
ancillary documents normally required to be filed in a timely
manner under securities legislation and listed in the May Blanket
Order (the Filing Exemption). The extension period starts on the
next calendar day following the reporting deadline (i.e. if the
filing deadline is August 14, the first day of the extension period
is August 15 and the extension period would end on September
28).
Corporate finance requirements: the reporting
issuer relying on the Filing Exemption must, as soon as reasonably
practicable, issue a news release in advance of its normal filing
deadline that discloses certain information, including:
- each disclosure or filing requirement for which it is relying
on the Filing Exemption; - confirmation that its management, directors and other insiders
are subject to an insider trading black-out policy whereby they are
restricted from trading securities of the issuer due to an
increased risk that these individuals have access to material
undisclosed information; - the estimated date by which required disclosure is expected to
be filed or delivered; and - an update on whether or not there have been any material
business developments since the last annual or interim financial
report filed by the reporting issuer.
Reporting issuers are reminded that if they intend to rely on
the Filing Exemption, they must provide advance notice to the
market by issuing the above noted news release and filing it on
SEDAR in advance of the issuer’s normal filing deadline.
The issuer will also be required to file a subsequent news
release, no later than 30 days after the extension period begins,
updating any material business developments since the first news
release was issued and a further news release no later than 30 days
following such subsequent news release if it has not yet filed each
document for which it is relying on the Filing Exemption.
A reporting issuer’s AIF is required under applicable
securities laws to be dated no earlier than the date of the
auditor’s report of the issuer’s financial statements. If
the issuer is delaying the filing of its annual financial
statements pursuant to the Filing Exemption, it cannot file its AIF
prior to the filing of its annual financial statements and will
need to rely on the Filing Exemption with respect to the filing of
its AIF as well.
Responding to requests for paper copies of filings and
filing of executive compensation disclosure: The May
Relief does not address the temporary blanket relief announced by
the CSA on May 1, 2020 in respect of certain other delivery and
filing requirements, including responding to requests for paper
copies of certain financial statements and MD&A and the filing
by issuers of a statement of executive compensation. Such matters
will continue to be addressed by the blanket orders issued on May
1, 2020 and in particular, Alberta Securities Commission Blanket
Order 51-518: Temporary Exemptions from Certain Requirements to
File or Send Securityholder Materials, which relief is subject
to issuers meeting certain requirements. For further information,
see our bulletin dated May 5, 2020, available here.
Prospectus offerings: reporting issuers will be
prohibited from filing a preliminary or final prospectus and will
also be precluded from completing a prospectus offering which
requires or will require the filing of a prospectus supplement to
an existing base shelf prospectus, until the continuous disclosure
record of the reporting issuer is current. The May Blanket Orders
do not provide an extension of the 90 and 180 day lapse date period
contained in applicable securities laws. Reporting issuers in the
90-day distribution period for a best efforts prospectus offering
should cease the distribution and contact their principal regulator
to discuss.
Normal course issuer bids: an issuer relying on
the Filing Exemption should not make purchases of its own
securities pursuant to a normal course issuer bid if there is a
risk that the issuer and its insiders will have access to material
undisclosed information. The CSA expects any normal course issuer
bid to be suspended if reliance by the issuer on the Filing
Exemption means that the issuer, its management and/or insiders are
in possession of material undisclosed information, except where
such purchases are made pursuant to an automatic purchase plan.
Consistent with the March Relief, the May Blanket Orders do not
provide an extension period for the filing of insider reports or
reports of exempt distribution.
The May Blanket Order issued by the Alberta Securities
Commission provides similar relief in respect of investment funds,
registrants and certain regulated entities and is available here.
For other considerations and commentary in respect of the
temporary relief provided by the CSA, the Alberta Securities
Commission, the TSX and the TSX Venture Exchange in response to the
ongoing COVID-19 pandemic, see our other bulletins dated April 20,
2020, April 21, 2020, April 22, 2020, April 27, 2020 and May 5,
2020, all available here.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
