CSA Blanket Orders Aim to Warm Up Canadian Capital Markets

Amid continuing market uncertainty that has seen a slowdown of Canadian initial public offerings (IPOs) during the first quarter of 2025, the Canadian Securities Administrators (CSA) has published a series of coordinated blanket orders (Blanket Orders) intended to reduce regulatory burden and enhance capital-raising opportunities for issuers in Canadian capital markets.

IPOs and Other Transactions

Streamlining Disclosure Requirements, Including Historical Financial Statements

The applicable Blanket Order streamlines certain disclosure requirements relating to IPOs and other transactions in an effort to reduce regulatory burden, reflect evolving market expectations and align with practices in comparable jurisdictions.

Of particular note, the applicable Blanket Order provides an exemption from the requirement to include third-year historical financial statements in IPO prospectuses and certain other disclosure documents that incorporate the long-form prospectus requirements, including circulars filed in connection with certain spinoffs, reverse takeovers, securities exchange takeover bids and plans of arrangements. Previously, only IPO venture issuers and issuers that are already reporting issuers did not have to provide a third year of historical financial statements.

This exemption also means that prospective IPO issuers do not need to include standalone financial statements for companies acquired prior to the two most recently completed financial years that may constitute the “primary business” of an issuer (see our April 2022 Blakes Bulletin: Business Is Business, But Some Acquired Businesses Are More Primary Than Others).

The applicable Blanket Order also exempts promoter certificates and streamlines the use of term sheets and marketing materials during the “waiting period” in certain specified circumstances.

Facilitating Capital Raises by New Reporting Issuers

To facilitate capital raising by new reporting issuers, other than investment funds, the applicable Blanket Order provides a prospectus exemption to new reporting issuers during the 12 months immediately following their underwritten IPO prospectus, subject to certain conditions:

• Eligible reporting issuers may distribute up to the lesser of C$100 million or 20% of the aggregate market value of their listed equity securities.
• The distribution must involve the same class of securities as qualified under the IPO prospectus and must be at a price no lower than the IPO price.
• Prior to soliciting offers, issuers must file a news release and an offering document, which must include details of the offering, disclosure of any material fact relating to the securities being distributed, a description of the issuer’s business objectives, recent developments and use of proceeds, and a contractual right to investor rights of cancellation and recission. Additional disclosure may also be required by non-venture issuers where proceeds from the distribution are to be allocated to a recently completed or probable “significant acquisition” under NI 51-102.
• To be eligible, issuers may only use the exemption if they reasonably expect to have sufficient funds to meet business objectives and liquidity requirements for the 12 months following the distribution.

The exemption cannot be used for restructuring transactions or any other transactions requiring securityholder approval. It also cannot be used by venture issuers for acquisitions that would be a significant acquisition under National Instrument 51-102.

Expansion of the Offering Memorandum Prospectus Exemption

In an effort to increase capital raising opportunities for issuers and allow investors to participate in more exempt-market financing opportunities, the applicable Blanket Order provides an exemption from the 12-month C$100,000 investment limit under the existing offering memorandum prospectus exemption in Alberta, New Brunswick, Nova Scotia, Ontario, Quebec and Saskatchewan, such that a reinvestment of proceeds from the sale of securities in the same issuer does not count towards such investment limit, provided the investor receives advice from a registered dealer or registered adviser confirming the suitability of the reinvestment. In Ontario and Nova Scotia, issuers must notify the regulator within 10 days of the distribution and include specific details in Form 45-106F1 when relying on the exemption.

Next Steps

The Blanket Orders are effective across all CSA jurisdictions as of April 17, 2025. In certain jurisdictions, the blanket orders include an expiry date based on the term limits for blanket orders in the applicable jurisdiction (e.g., 18 months in Ontario).

The CSA noted that it is also actively exploring additional blanket orders aimed at reducing regulatory burden without compromising investor protection. This includes a potential increase to the capital-raising limit under the listed issuer financing exemption, which would apply to all listed reporting issuers.

Contact Us

For further information, please contact the authors or any other member of our Capital Markets group.