CSA takes steps to encourage Canadian IPOs and subsequent financings

On April 17, 2025, the CSA published harmonized blanket orders that provide exemptions from certain prospectus and disclosure requirements relating to public offerings (the blanket orders). The purpose of the blanket orders is to encourage initial public offerings (IPOs) and subsequent financings by new reporting issuers. The blanket orders are intended to reduce the regulatory burden on issuers undertaking an IPO or a financing following an IPO and provide increased opportunities for investors.

The blanket orders adopted in each CSA jurisdiction are:

• a blanket order reducing disclosure requirements for an IPO (the disclosure blanket orders); and
• a blanket order exempting new reporting issuers from the requirement to prepare a prospectus for a period of 12 months following an underwritten IPO (the new reporting issuer blanket orders).

Relaxation of IPO requirements

The disclosure blanket orders:

• exempt eligible issuers from including the third most recently completed financial year of financial and operating statements in a long-form prospectus. Only two years of audited financial and operating statements will be required. Information circulars, bid circulars and material change reports will also be exempt from the historical third-year financial statement requirement. Issuers must still comply with all other disclosure items related to the third most recently completed financial year;

• exempt investment dealers from the requirement that standard term sheets or marketing materials may only be used during the waiting period if the information contained in the term sheet or marketing material has been derived from the preliminary prospectus (or an amendment). The waiting period is the period between the receipt for the preliminary long-form prospectus and the receipt for the final prospectus. 

The disclosure blanket orders allow standard term sheets and marketing materials used in the waiting period to include specified pricing information even though such information is not contained in or derived from the preliminary prospectus or an amendment to the preliminary prospectus. Specified pricing information includes the price or price range of the securities offered, the number or number range of the securities offered, and the dollar amount or dollar range of the securities offered. This exemption avoids the need to file an amended preliminary prospectus that includes such information and reduces cost for the issuer. A news release must be issued containing the specified pricing information prior to the delivery of term sheets or marketing materials to the prospective investors; and

• exempt the issuer from the requirement to include a promoter’s certificate in the long-form final prospectus where the promoter is an individual who has signed the prospectus in another capacity (for example, as a director or an officer of the issuer). In Alberta, Ontario, New Brunswick and Nova Scotia a promoter’s certificate will also not be required where the issuer has been a reporting issuer for at least 24 months and the offering does not relate to asset-backed securities and the promoter is not a director, an officer or a control person of the issuer.

New Reporting Issuer Prospectus Exemption

Pursuant to the new reporting issuer blanket order, reporting issuers, other than investment funds, will be able to rely upon a new prospectus exemption to raise funds during the 12 months immediately following the issuance of a receipt for a final long-form prospectus qualifying an underwritten IPO. This new exemption is subject to the following conditions, among others:

• the issuer will be allowed to issue up to the lesser of $100 million or 20% of an issuer’s market capitalization as of the date of the announcement of the distribution;
• the subsequent distribution must be of the same class of securities as the IPO and must be sold at a price no lower than the IPO price;
• the issuer must have listed equity securities;
• the issuer must be in compliance with all continuous disclosure requirements; and
• prior to soliciting potential investors, a news release must be issued and filed. A short offering document must also be filed and posted on an issuer’s website. The offering document must include limited details of the offering, material fact disclosure, a description of the issuer’s business objectives, recent developments and use of proceeds disclosure. In addition, the offering document must describe that there is a two-business-day right to cancel the purchase and a right of rescission or damages in the event a misrepresentation is contained in the offering document.

An issuer is only eligible to rely on the new reporting issuer blanket order where it reasonably expects to have sufficient funds to meet business objectives and liquidity for 12 months. The exemption will not be available where the allocation of the proceeds of distribution is to a restructuring transaction or any transaction requiring shareholder approval.

Securities issued in reliance on the new reporting issuer blanket ruling will be freely tradeable.

Next steps

The blanket orders became effective in all CSA jurisdictions on April 17, 2025, and, unless extended, will expire on the usual term for blanket orders in the specific CSA jurisdiction. In Ontario, the blanket orders will expire October 16, 2026, unless extended.

The CSA is considering future relief that will reduce regulatory burden for issuers without affecting investor protection, including an increase of the capital-raising limit for issuers relying upon the listed issuer prospectus exemption.

Offering memorandum exemption

Certain CSA members have also relaxed the requirements of the offering memorandum prospectus exemption. Our commentary on those changes is available here.