The CSA publishes relief from certain conditions of the listed issuer financing exemption

The Canadian Securities Administrators (CSA) recently published relief from certain conditions of the listed issuer financing exemption (Exemption). Every member of the CSA implemented the relief through a Coordinated Blanket Order 45-935 – Exemptions from Certain Conditions of the Listed Issuer Financing Exemption (blanket order). The blanket order came into effect on May 15, 2025. In certain jurisdictions, the blanket order includes an expiry date based on the term limits for blanket orders in the jurisdiction. Although the outcome is intended to be the same in all CSA jurisdictions, the language of the blanket order issued by each province or territory is not identical because each jurisdiction’s blanket order must fit within the authority provided in local securities legislation. As a result, issuers are cautioned to review each relevant blanket order.

The original Exemption was adopted in November 2022 to provide a method of capital raising for reporting issuers that are listed on a recognized exchange and that are up to date with their periodic disclosure documents. The blanket order provides relief from certain conditions of the Exemption to further facilitate capital raising by listed reporting issuers.

Under the original Exemption, listed reporting issuers are limited to raising the greater of $5 000 000 and 10% of the issuer’s aggregate market value to a maximum of $10 000 000 in a 12-month period, subject to a 50% dilution limit. The blanket order provides relief from these conditions by allowing listed reporting issuers to raise the greater of $25 000 000 and 20% of the aggregate market value of the issuer’s listed securities to a maximum of $50 000 000 in a 12-month period, subject to different provisions related to the 50% dilution limit.

The blanket order provides that for the purposes of the 50% dilution limit:

• the timing for calculating the outstanding securities is (i) the date of the news release announcing the offering if an issuer has not relied on the Exemption or the blanket order in the last 12 months or (ii) the date of the news release announcing the first offering completed in reliance on the Exemption or the blanket order in the last 12 months; and
• issuers can exclude securities issuable on exercise of warrants from the calculation if they are not convertible within 60 days of closing of the offering.

In addition, under the blanket order, the distribution cannot:

• result in a new control person, or
• result in a person or company acquiring ownership of, or exercising control or direction over, securities that would result in the person or company being entitled to elect a majority of directors.

The foregoing is not intended as legal advice. Should you have any questions regarding the blanket order or have any other issues relating to your corporate finance and securities needs, please feel free to contact Stewart Muglich at 604 484-1778.