The prospectus exempt rights offering regime will be significantly revised to address concerns that it is too expensive and time consuming. The Canadian Securities Administrators (CSA) states that the amendments are intended to make prospectus exempt rights offerings more palatable for issuers while maintaining investor protections. The amendments will repeal National Instrument 45-101 Rights Offerings (NI 45-101) – the revised rights offering prospectus exemption will be provided in an amended section 2.1 of National Instrument 45-106 Prospectus Exemptions (NI 45-106).
Principal Conditions of the Exemption
The new rights offering prospectus exemption is only available to non-investment fund reporting issuers that meet certain conditions. The issuer must be a reporting issuer in Canada and it must be current in its continuous disclosure obligations. In addition, the exercise period for the rights must be no less than 21 days and no more than 90 days and must commence the day after the rights offering notice is sent to security holders. Continue Reading
Attaining an Aboriginal community’s consent to a development project should not be viewed as a line item on a to-do list. Corporations that want to operate successfully in areas subject to Aboriginal interests must therefore find new ways of building or rebuilding relationships – and the first step is developing mutual trust.
The Boreal Leadership Council (BLC) – a working group of conservation organizations, indigenous peoples, resource companies and financial institutions – has developed a framework through which industry and government can engage indigenous communities. The BLC has asked industry and government to implement the idea of Free, Prior and Informed Consent (FPIC) – the right of indigenous peoples to offer or withhold consent to developments that may have an impact on their territories or resources – in other words, a veto power over resource development projects. FPIC cannot exist where a people does not have the option to meaningfully withhold consent.
On August 12, 2015, Natural Resources Canada (NRCAN) posted a notice on its website seeking public input on draft implementation tools (Implementation Tools) it has developed in respect of the Extractive Sector Transparency Measures Act (the Act). As described in our previous entries on our Canadian Securities Law blog (here and here), the stated purpose of the Act is to foster better transparency to ensure that resource extractive industries support proper development in the countries where they operate, while at the same time making it harder to conceal illicit payments.
The Act was proclaimed into force on June 1, 2015, but as we have previously noted precise guidance on the underlying disclosure obligations has been lacking. It was hoped that regulations enacted under the Act would put meat on the legislative skeleton and provide much needed regulatory certainty. Instead, NRCAN has introduced the Implementation Tools as a practical and illustrative alternative. The Implementation Tools do not constitute prescriptive guidance with the force of law, however. Continue Reading
On June 1, 2015, Canada proclaimed into force the Extractive Sector Transparency Act (Federal Act). The Federal Act requires mining, oil and gas companies to disclose payments made to Canadian and foreign governments and others, including aboriginal groups.
The Federal Act is the result of a commitment made by Canada at the 2013 G8 summit. The “Publish What You Pay” movement and its supporters have long been lobbying G8 and other “rich country” governments for mandatory payment disclosures to combat corruption and increase governmental accountability in poorer countries. For a discussion of the Federal Act please refer to our post of June 2, 2015. Continue Reading
The Canadian Securities Administrators (CSA) recently published CSA Staff Notice 51-344 Continuous Disclosure Review Program Activities for the fiscal year ended March 31, 2015. The notice provides stakeholders with guidance arising from the key deficiencies identified by CSA members in their continuous disclosure reviews of reporting issuers last year and include, in particular, a discussion of mining issuers’ compliance with National Instrument 43-101 Standard of Disclosure for Mineral Projects. While this post focuses on mining issuers’ disclosure practices, we’ve provided a more general summary of CSA Staff Notice 51-344 on CanadianSecuritiesLaw.com.
CSA staff remind mining issuers of the requirement to comply with NI 43-101, including in respect of written disclosures on an issuer’s website such as investor presentations, news articles and even links to third party content. CSA staff also refer mining issuers to CSA Staff Notice 43-309 Review of Website Investor Presentations by Mining Issuers which we have previously discussed. Notably, CSA staff advise specifically that investor presentations: (i) must name the qualified person who approved technical information and disclose their relationship to the issuer; (ii) provide the required cautionary statements regarding preliminary economic assessments; and (iii) clearly state whether mineral resources include or exclude mineral reserves, among other recommendations.
For further information, please consult CSA Staff Notice 51-344.
Yesterday the Government of Canada proclaimed into force the Extractive Sector Transparency Measures Act (the Act). The proclamation comes in advance of the G7 Summit on June 7, 2015, and is a follow-through on the 2013 G8 Summit commitment made by Prime Minister Stephen Harper to establish new reporting standards for Canadian oil, gas and mining companies. The stated purpose is to foster better transparency to ensure that the resource extractive industries support proper development in the countries where they operate, while at the same time making it harder to conceal illicit payments. As discussed in our post last October, the Act will require affected entities to report any payments made in relation to the commercial development of oil, gas or minerals during a financial year that exceed either the amount prescribed by regulation or, if no amount is prescribed, $100,000 of the following nature and whether monetary or “in kind”: Continue Reading
On April 7, 2015, Québec Premier Philippe Couillard and Minister of Energy and Natural Resources Pierre Arcand unveiled The Plan Nord toward 2035, 2015-2020 Action Plan.
This Plan Nord 2.0 is an updated and more sober version of the Plan Nord announced with considerable fanfare by Premier Jean Charest in 2012. Mr. Charest’s plan was long on promise, short on detail and studiously ignored during Ms. Pauline Marois 19-month premiership (2012-2014). Continue Reading
The Canadian Securities Administrators yesterday released a staff review of investor presentations on mining issuers’ websites, providing valuable insights on how the regulators interpret and apply NI 43-101 and other disclosure requirements and ultimately finding that “there is room for improvement” in order to comply with applicable regulatory standards.
The review, which assessed compliance with NI 43-101 Standards of Disclosure for Mineral Projects and the forward-looking information (FLI) requirements of NI 51-102 Continuous Disclosure Obligations, found a number of deficiencies with disclosure in investor presentations posted on mining issuers’ websites. Of the 130 investor presentations reviewed, only 18% were found to be in substantial compliance with disclosure requirements, while 57% suffered from minor non-compliance and 25% had major non-compliance issues. Continue Reading
The Toronto Stock Exchange yesterday proposed amendments to its Company Manual that would adopt a broader deference model in respect of certain exchange requirements where an interlisted issuer is subject to the rules and regulation of another exchange or jurisdiction.
An “interlisted issuer” is an issuer listed on two or more exchanges or marketplaces. According to the TSX, as at November 30, 2014, there were 322 interlisted issuers on the TSX. Of these, 273 (82%) are Canadian-based issuers, while 59 (18%) are foreign incorporated. Currently, the TSX waives certain of its requirements applicable to a transaction where at least 75% of the issuer’s trading volume and value over the six months preceding notification of the transaction occurs on another exchange and the other exchange is reviewing the transaction. Continue Reading
On November 14, Foreign Affairs, Trade and Development Canada announced enhanced guidelines intended to improve corporate social responsibility (CSR) by Canadian companies in their extractive sector activities outside of Canada.
Launched in 2009, Building a Canadian Advantage outlined a strategy to promote CSR for the Canadian extractive sector operating in foreign jurisdictions. Among other things, the document promoted certain international CSR performance guidelines and set up the Office of the Extractive Sector CSR Counsellor to assist in the resolution of CSR issues abroad. Continue Reading