Written By Will Osler, Bruce Hibbard and Valeria Palacio

As an update to our previous blog posts, Greater Flexibility for Reporting Issuers: Access Equals Delivery and CSA Seeks Comments on “Access Equals Delivery” Model for Prospectuses, Financial Statements and MD&A, the Canadian Securities Administrators (CSA) have published for comments a revised access model for certain continuous disclosure documents (CD Documents) of non-investment fund reporting issuers (Proposed Access Model). The Proposed Access Model is subject to a 90-day comment period, ending on February 17, 2025.

Background

On January 9, 2020, the CSA published a consultation paper seeking to provide a forum for discussion on the appropriateness of implementing an “Access Equals Delivery” model (AED Model) in the Canadian market.

On April 7, 2022, the CSA published initial proposals to generally permit electronic delivery of prospectuses and certain CD Documents, recognizing that electronic access to documents facilitates more efficient communication with investors and reduces regulatory burden for issuers. The Proposed Access Model was generally well-received for prospectuses, but several commenters expressed concern about implementing the Proposed Access Model for CD Documents, citing investor protection concerns.

CSA amendments implementing an AED Model to generally permit electronic delivery for prospectuses only came into force on April 16, 2024. After considering comments received during the April 2022 consultation, the CSA has now made material changes to the April 2022 proposals (Initial Proposals) to improve the Proposed Access Model for CD Documents from an investor perspective.

Summary of the Proposed Access Model

The Proposed Access Model seeks to modernize the way documents are made available to investors, by allowing issuers to provide investors with electronic access to CD Documents without impacting investors’ ability to request or provide standing instructions to receive those documents in electronic or paper form. This would provide issuers with an alternative delivery method for CD Documents to the delivery requirements currently found in securities legislation.

Under the current delivery regime, reporting issuers are required to send a request form annually to shareholders so that they may request physical or electronic copies of the issuer’s financial statements and related MD&A, and physically deliver those documents to investors. Although electronic delivery is already permitted in some respects, many issuers continue to incur significant costs for printing and mailing the documents required to be delivered under securities laws.

With the proposed amendments, the Proposed Access Model for CD Documents stipulates that satisfactory electronic access to a CD Document has been provided if each of the following has occurred:

• the issuer has filed the document on SEDAR+;
• on the same day, the issuer has issued a news release disclosing:
  • CD Documents are available electronically and how to access them;
  • the SEDAR+ notification functionality is available (see below);
  • an electronic or paper copy of the document can be obtained upon request; and
  • standing instructions to receive the document in electronic or paper form will continue to be followed; and
  (collectively, the Required Disclosure Information)
• on the same day, the issuer has posted the document on its website.

Corporate issuers additionally must notify investors through a news release at least 25 days in advance of both beginning to use or ceasing to use the Proposed Access Model.

Proposed Amendments and Changes to Proposed Access Model

Certain substantive material changes have been made to the Initial Proposals in an attempt to address concerns raised during consultation, including:

• SEDAR+ Notification Functionality: This feature allows individuals to receive e-mail notifications when an issuer has filed a CD Document, including a direct link to the document.
• Prior News Release: Issuers must issue a news release at least 25 days before using the Proposed Access Model if during the previous financial period, the issuer either: (1) sent a request form to investors that they could use to request a copy of the issuer’s CD Documents; or (2) sent its documents to all investors.
• Sending a Separate Document: A separate document must be included with the proxy-related materials, or if the issuer is using the notice-and-access model, with the notice, sent to investors. This document serves as an annual reminder to investors about how to access CD Documents electronically, that the SEDAR+ notification functionality is available, how to obtain a copy of a document and that standing instructions can be provided.
• Issuer’s Website: Issuers must post the CD Document to their website on the same day they have filed a CD Document on SEDAR+.
• Notice Before Ceasing Electronic Access: Issuers must issue a news release at least 25 days before they intend to cease using the Proposed Access Model.
• Interaction With Current Delivery Requirements: Issuers may choose to provide electronic access to their annual financial statements and MD&A, interim financial reports and MD&A, or both. 

The Proposed Access Model will not be available to SEC foreign issuers or designated foreign issuers. They will need to comply with the applicable rules of their home jurisdiction.

Next Steps

The CSA is seeking public comments on the proposed amendments and changes to the Proposed Access Model. Specifically, the CSA is requesting insights on any practical issues commenters may anticipate with the requirements to file a CD Document on SEDAR+, issue and file a news release on SEDAR+, and, for issuers with a website, post the CD Document on their website, all on the same day. The public comment period ends on February 17, 2025.

If you have any questions regarding the Proposed Access Model, please contact a member of the Bennett Jones Capital Markets group.

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