Canadian Securities Administrators Adopt Notice-and-Access

Canadian Securities Administrators have adopted “notice-and-access” in Canada under amended National Instrument 54-101 Communication with Beneficial Owners of Securities of a Reporting Issuer, which allows reporting issuers (but not investment funds) to deliver proxy-related materials to shareholders by posting the materials on a non-SEDAR website.

Unlike its US counterpart, Canadian notice-and-access is not mandatory for issuers and, if an issuer chooses to distribute materials by notice-and-access, its shareholders may still opt to be mailed paper materials.

What do you need to know?

1. The notice package

   An issuer who intends to rely on notice-and-access must send its shareholders a notice package which discloses clearly the date, time, and location of the meeting, and contains required details of the issuer’s notice-and-access materials.

2. Important timeline changes

   • The notice package must be sent at least 30 days before the date of the meeting, or three to four business days sooner if the issuer is delivering the materials to beneficial owners indirectly (through Broadridge or another proximate intermediary),
   • The notice package and information circular must be posted on SEDAR, as well as on a website other than SEDAR, no later than the day it is sent out by mail,
   • An issuer using notice-and-access must set the record date for notice of the meeting date at least 40 days before the date of the meeting, and
   • An issuer using notice-and-access for the first time must file its notice of meeting and record dates on SEDAR at least 25 days before the record date for notice of its meeting (at least 65 days before the meeting date).

3. Enhanced disclosure

   Issuers are now required to provide enhanced disclosure of the shareholder voting process in their meeting materials. An information circular must now disclose:

   • whether the issuer is sending proxy-related materials to registered holders or beneficial owners using notice-and-access,
   • the details of any stratification being used,
   • whether the issuer will be sending the materials directly to non-objecting beneficial owners, and
   • whether or not the issuer will pay to have the materials sent to objecting beneficial owners (OBOs).

If the issuer does not intend to pay for the delivery of materials to OBOs, the information circular must state that OBOs will not receive the materials unless their intermediary assumes delivery costs.

For more information, please contact any member of the Boughton Law Securities Group.

The information contained in this post is a summary only and is not considered to be legal advice.  

Tags: Article; Securities