Business Law Blog

On November 19, 2024, the Canadian Securities Administrators (the “CSA”) published for comment further amendments (the “Revised Proposal”) to its initial proposal published in April 2022 (the “Initial Proposal”) to implement an “access equals delivery” model for continuous disclosure documents. The Revised Proposal would allow reporting issuers (other than investment funds) to provide electronic access to their annual and interim financial statements and related management’s discussion & analysis (collectively, the “CD Documents”) instead of following the current delivery requirements under securities legislation.

Background on the “Access Equals Delivery” Model

In January 2020, the CSA began a consultation process to solicit feedback on modernizing delivery requirements for certain disclosure documents. On April 17, 2022, the CSA published for comment its Initial Proposal which proposed amendments to implement an “access equals delivery” model for prospectuses and CD Documents. The “access equals delivery” model for prospectuses was well received, however, stakeholders expressed concerns with implementing an “access equals delivery” model for CD Documents, including that it may have negative impacts on retail investors. In light of these concerns, on April 16, 2024, amendments came into force implementing an “access equals delivery” model for prospectuses but no amendments were made to the existing delivery requirements for CD Documents.

After further considering the comments received on the Initial Proposal, the CSA has published for comment the Revised Proposal, which proposes an “access equals delivery” model for CD Documents that includes enhanced investor protections.

Summary of the Revised Proposal

If implemented, the Revised Proposal would allow reporting issuers (other than investment funds) to comply with their delivery obligations for CD Documents by:

1. At least 25 days before relying on the “access equals delivery” model (if, during the previous financial period, the reporting issuer complied with existing delivery requirements under National Instrument 51-102 – Continuous Disclosure Obligations), issuing and filing a news release (i) announcing that the CD Documents will be accessible electronically on SEDAR+, (ii) providing specific information on how to access the CD Documents on SEDAR+, obtain notifications when documents are filed on SEDAR+ and request electronic or paper copies of the CD Documents, and (iii) confirming that all standing instructions to have the CD Documents sent to a securityholder in electronic or paper form will continue to be followed (the “Initial News Release”);
2. Filing the CD Documents on SEDAR+;
3. On the same day as the CD Documents are filed on SEDAR+:
   1. Issuing and filing a news release announcing the availability of the CD Documents electronically and including substantively the same information required to be included in the Initial News Release; and
   2. Posting the CD Documents on the reporting issuer’s website; and
4. Sending, with the reporting issuer’s proxy materials, a separate document containing substantively the same information required to be included in the Initial News Release and posting this document on the reporting issuer’s website.

The Revised Proposal would not require reporting issuers to use the “access equals delivery” model, meaning that reporting issuers could continue to comply with the current delivery requirements for CD Documents. However, once a reporting issuer relies on the “access equals delivery” model to deliver CD Documents, it must provide at least 25 days advance notice, by issuing and filing a news release, if it intends to stop using the “access equals delivery” model.

While the Initial Proposal covered SEC foreign issuers and designated foreign issuers, the Revised Proposal would not be available to these issuers.

CSA’s Request for Comments

The CSA has requested comments on the Revised Proposal and is specifically seeking feedback on whether reporting issuers anticipate any practical issues with the requirement to issue and file a news release on SEDAR+ and post the CD Documents on their website on the same day they are filed on SEDAR+. The comment period on the Revised Proposal ends on February 17, 2025.

Please reach out to any member of our Corporate Finance and Securities Group if you would like to discuss the Revised Proposal.