On March 23, 2020, the Canadian Securities Administrators (CSA) issued a news release to announce that the CSA has published local blanket orders (Blanket Orders) for market participants that provide a 45-day extension for periodic filings normally required to be made by market participants on or before June 1, 2020. Market participants need to comply with the conditions set out in the Blanket Orders to use the 45-day extension.
The local blanket orders are substantially harmonized across the country. Market participants can view the Blanket Orders on CSA members' websites.
The set of four blanket orders consists of:
- Temporary Exemption from Certain Financial Statement and Information Delivery Requirements for Registrants and Unregistered Capital Markets Participants (Registration Relief Order)
- Extension of Certain Filing, Sending, Delivery and Prospectus Renewal Requirements of Investment Funds (Investment Fund Relief Order)
- Temporary Exemption from Certain Corporate Finance Requirements (Corporate Finance Relief Order)
- Temporary Exemption from Certain Reporting Requirements for Regulated Entities (Regulated Entity Relief Order)
The CSA advised that they are monitoring the situation and will consider whether further relief or a further extension is necessary.
The following is a summary of some of the provisions of the orders. It is important for issuers to review the local blanket orders in their jurisdiction. Issuers who intend to rely on the exemptions in the Blanket Orders should consider their obligations to provide disclosure materials, including financial statements under any existing contractual obligations as well as the events of default, covenants and other terms of any contracts including debt instruments.
Registration Relief Order
Who can rely on the relief?
Registered dealers, registered advisers, registered investment fund managers and unregistered capital market participants.
What does the relief provide?
The relief provides a 45-day extension from the deadlines between March 23, 2020 and June 1, 2020 for the following documents required under National Instrument 31-103 – Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103):
- in the case of a registered dealer, its annual and interim financial statements and its completed Form 31-103F1 Calculation of Excess Working Capital
- in the case of a registered adviser, its annual financial statements and its completed Form 31-103F1 Calculation of Excess Working Capital
- in the case of a registered investment fund manager, its annual and interim financial statements, its completed Form 31-103F1 Calculation of Excess Working Capital and its completed Form 31-103F4 Net Asset Value Adjustments
Registered mutual fund dealers that are members of the Mutual Fund Dealers Association (MFDA) and registered investment dealers that are members of Investment Industry Regulatory Organization of Canada (IIROC) have also been provided with exemptions from filing the MFDA Questionnaire and Report and the Joint Regulatory Financial Questionnaire and Report.
Additional local exemptions have been provided and registrants should refer to the local blanket order in their jurisdiction to confirm if exemptions are available for additional filings.
How does a person or company comply with the conditions of the relief?
The person or company can rely on the exemption provided that the person or company delivers the document to the regulator no later than 45 days after the delivery deadline for the document.
Investment Fund Relief Order
Who can rely on the relief?
Any investment fund required to make a filing or delivery of a document listed in Exhibit A of the relief or an investment fund distributing securities under a prospectus with a lapse date that occurs between March 23, 2020 and June 1, 2020.
What does the relief provide?
The relief provides a 45-day extension from the deadlines for the following filings required to be made between March 23, 2020 and June 1, 2020:
National Instrument 41-101 – General Prospectus Requirements
- custodian compliance reports
National Instrument 81-102 – Investment Funds
- custodian compliance reports
- compliance report
National Instrument 81-106 – Investment Fund Continuous Disclosure (NI 81-106)
- annual and interim financial statements
- notice to the regulator of a reliance on the section 2.11 exemption to file financial statements by a non-reporting issuer
- annual and interim management report of fund
- annual information form
- deliver of the annual financial statements, interim financial statements, and the related management report on fund performance to a securityholder concurrently with the filing deadline
- sending securityholders a request form annually that they may use to instruct the investment fund as to which of the documents the securityholder wishes to receive and from sending the requested document within ten calendar days after the request
- labour sponsored or venture capital fund to concurrently file an independent valuation with the filing of its annual financial statements
National Instrument 81-107 – Independent Review Committee for Investment Funds
- report to securityholders that describes the independent review committee and its activities for the financial year
In addition, relief is provided from section 62 of the Ontario Securities Act, and its equivalent sections in other jurisdictions, which requires an investment fund to file and obtain a receipt for a new prospectus, in accordance with certain timelines, in order to continue distribution of the investment fund's securities for a further 12 months after the lapse date.
How does a person or company comply with the conditions of the relief?
Any investment fund relying on the relief must, as soon as reasonably practicable and in advance of its filing or delivery deadline, notify the Director of the Investment Funds and Structured Products Branch by email at IFSPDirector@osc.gov.on.ca, stating that the investment fund is relying on this order and each applicable requirement for which it is relying on this order.
An investment fund relying on this order must, as soon as reasonably practicable and in advance of its filing or delivery deadline, post a statement on its public website, or the public website of its investment fund manager, stating that the investment fund is relying on this order and each applicable requirement for which it is relying on this order.
Corporate Finance Relief Order
The CSA have included Exhibits A-D to the Corporate Finance Relief Order. Each Exhibit contains a list of filings/deliveries for which an exemption is provided under the order. The order provides different instructions on how to comply with the conditions for each set of documents by Exhibit.
Who can rely on the relief?
Any person or company that is required to make a filing, or to send or deliver a document referred to above.
What does the relief provide?
The relief provides a 45-day extension from the deadlines for the following filings required to be made between March 23, 2020 and June 1, 2020:
Filings Listed in Exhibit A of the Corporate Finance Relief Order:
National Instrument 51-102 – Continuous Disclosure Obligations (NI 51-102)
- annual and interim financial statements
- management's discussion & analysis
- annual information form
- executive compensation disclosure
- the sending of an annual request form required by subsection 4.6(1)
- the delivery of annual financial statements required by subsection 4.6(3) and (5) and management's discussion & analysis required by subsection 5.6(1) and (3)
National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities
- a statement of reserves data and other information
National Instrument 43-101 – Standards of Disclosure for Mineral Projects
- a technical report
The relief extends to similar annual or interim disclosure documents of a reporting issuer required pursuant to an exemption from one of the requirements listed above included in an exemptive relief decision made by a securities regulatory authority or regulator prior to the date of this order.
Filings Listed in Exhibit B of the Corporate Finance Relief Order:
NI 51-102
- a change of auditor reporting package
- a notice of change in year end
- a business acquisition report
- a notice of change in corporate structure
Filings Listed in Exhibit C of the Corporate Finance Relief Order:
National Instrument 45-106 – Prospectus Exemptions
- annual financial statements
- a notice of use of proceeds on Form 45-106F16
Multilateral Instrument 45-108 – Crowdfunding
- annual financial statements required
- annual disclosure of use of proceeds required
National Instrument 25-101 – Designated Rating Organizations
- an annual filing of a designated rating organization on Form 25-101F1 and any amendment to that filing
Filings Listed in Exhibit D of the Corporate Finance Relief Order:
National Instrument 44-102 – Shelf Distributions
- the lapse date for a final base shelf prospectus referred to in paragraph 2.2(3)(a), 2.3(3)(a), 2.4(3)(a), 2.5(3)(a), 2.6(3)(a) or section 2.7.
How does a person or company comply with the conditions of the relief?
A person or company required to make a filing or delivery listed in Exhibit A during the period from March 23, 2020 to June 1, 2020 has an additional 45 days from the deadline provided that the person or company issues, and files on SEDAR as soon as reasonably practicable, a news release in advance of its filing deadline that discloses:
- each applicable requirement for which it is relying on the exemption,
- that its management and other insiders are subject to an insider trading black-out policy that reflects the principles in section 9 of National Policy 11-207 Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions ("National Policy 11-207"),
- the estimated date by which the required disclosure is expected to be filed or the required document is expected to be sent or delivered, and
- the following information about the person or company
(A) an update of any material business developments since the date of the last annual financial statements or interim financial reports that were filed, or
(B) confirmation that there have been no material business developments since that date.
Please note that that the board and management are prohibited from trading during the extension period.
Subsequently, the person or company must issue another news release that discloses the following information and file the news release on SEDAR no later than 30 days after the first day of the extension period and another news release each additional 30 days:
- an update of any material business developments since the date of the last news release required by this section, or
- confirmation that there have been no material business developments since that date.
If a person or company is relying on this exemption for one or more documents, it cannot file a preliminary prospectus or a final prospectus for an offering of securities until it has filed all documents for which it is relying on this exemption.
If the person or company is relying on this exemption for the sending of an annual request form required by subsection 4.6(1) of NI 51-102, the annual request form is sent before the record date for its next annual meeting of securityholders.
If the person or company is relying on this exemption for the delivery of annual financial statements required by subsection 4.6(5) of NI 51-102 or management's discussion & analysis required by subsection 5.6(3) of NI 51-102, those documents are delivered before, or in conjunction with, the delivery of the management information circular for its next annual meeting of securityholders.
A person or company required to make a filing or delivery listed in Exhibit B during the period from March 23, 2020 to June 1, 2020 has an additional 45 days from the deadline provided that the person or company issues, and files on SEDAR as soon as reasonably practicable, a news release in advance of its filing deadline that discloses each applicable requirement for which it is relying on this exemption.
A person or company required to make a filing or delivery listed in Exhibit C during the period from March 23, 2020 to June 1, 2020 has an additional 45 days from the deadline provided that:
(a) the person or company issues, and files on SEDAR as soon as reasonably practicable if the person or company is a SEDAR filer, a news release in advance of its filing deadline that discloses each applicable requirement for which it is relying on this exemption;
(b) if a designated rating organization is relying on this exemption for the annual filing of a designated rating organization on Form 25-101F1 Designated Rating Organization Application and Annual Filing ("Form 25-101F1") required by subsection 14(1) of National Instrument 25-101 and any amendment to that filing required by subsection 14(2) of National Instrument 25-101, the news release required by paragraph (a) above must provide the following information and may refer to current information on the designated rating organization's website
(i) a brief discussion of any information in the previous annual filing, or an amendment to that filing, that is now materially inaccurate, or
(ii) confirmation that there is no such information that is materially inaccurate;
(c) despite paragraph (a), if the person or company is a designated rating organization, the designated rating organization is not required to file the news release on SEDAR provided the designated rating organization sends the news release to the securities regulatory authority that was its principal regulator for the purposes of its designation as a designated rating organization.
A person or company required to make a filing or delivery listed in Exhibit D during the period from March 23, 2020 to June 1, 2020 has an additional 45 days from the deadline provided that the person or company:
(a) issues, and files on SEDAR as soon as reasonably practicable, a news release in advance of its lapse date that discloses the specific requirements for which it is relying on this exemption, and
(b) is not also relying on the exemption from filing a document listed in Exhibit A.
Regulated Entity Relief Order
Who can rely on the relief?
Regulated entities including clearing agencies, marketplaces, trade repositories, designated information processors and commodity futures exchanges (Regulated Entities).
What does the relief provide?
The relief provides a 45-day extension from the deadlines for the following filings required to be made by Regulated Entities between March 23, 2020 and June 1, 2020.
The exemptions provided herein to Regulated Entities provide relief from the period reporting requirements under the Commodity Futures Act, National Instrument 21-101 Marketplace Operation, National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations, National Instrument 24-102 Clearing Agency Requirements, OSC Rule 91-507 Trade Repositories and Derivatives Data Reporting and OSC Rule 13-502 Fees including, among others, annual and interim financial statements, risk assessments and various reports. Regulated Entities should refer to the local blanket order in their jurisdiction to confirm the exemptions available to them.
How does a Regulated Entity comply with the conditions of the relief?
If a Regulated Entity relies on the 45-day extension, the Regulated Entity must disclose to the CSA that it is relying on the Regulated Entity Relief Order and state the reasons why it could not submit the document or information by the original due date. This disclosure to the CSA is made at the time that the Regulated Entity provides the document or information to the CSA.
The CSA is continuing to monitor the impact of COVID-19 on Canadian capital markets. The CSA provided a staff contact list in the CSA news release.
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.
