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The Canadian Securities Administrators (a voluntary umbrella organization of Canada’s provincial and territorial securities regulators) has made amendments to the following Rules and Policies applicable to reporting issuers, which rules change the notification and proxy solicitation rules for meetings of shareholders of reporting issuers effective February ...
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by Jim Blake, Q.C.
The Canadian Securities Administrators (a voluntary umbrella organization of Canada’s provincial and territorial securities regulators) has made amendments to the following Rules and Policies applicable to reporting issuers, which rules change the notification and proxy solicitation rules for meetings of shareholders of reporting issuers effective February 11, 2013:
National Instrument 54-101 Communication with Beneficial Owners of Securities of a Reporting Issuer (“NI 54-101”) and Companion Policy 54-101CP Communication with Beneficial Owners of Securities of a Reporting Issuer (“54-101CP”)
National Instrument 51-102 Continuous Disclosure Obligations (“NI 51-102”) and Companion Policy 51-102CP Continuous Disclosure Obligations (“51-120CP”)
These new Notice & Access Rules may only be used for shareholder meetings taking place on or after March 1, 2013.
What do the new Notice & Access Rules mean?
Notice. Notice and Access gives reporting issuers the option to mail a notice to securityholders instead of mailing the traditional full set of proxy materials, and to direct them to a website which enables access to electronic copies of the meeting materials. After receiving the Notice and Access notice, the securityholder also has the option (for up to one year from the date the meeting materials are posted) to request, at no cost to the securityholder, a full set of meeting materials. This means that the management information circular, annual financial statements and management’s discussion and analysis need not be mailed to securityholders unless specifically requested. The use of this alternative means of delivery is more environmentally friendly as it will help reduce paper use and will also reduce the cost of printing and mailing materials to shareholders.
Timelines. The record date must now be 40 days before the meeting date (rather than 30) and the mailing date must now be 30 days before the meeting date (rather than 21).
Electronic Delivery. Electronic delivery rules require the securityholder to provide consent to receiving its mailings from the reporting issuer by e-mail. Electronic delivery may still be used, including when you are distributing material using Notice & Access, if a securityholder has already provided consent to receive material by electronic delivery. A form request which authorizes future materials to be sent electronically is usually included with the Notice & Access package.
SEDAR. The reporting issuer will need to post all material related to the shareholder meeting on SEDAR as usual and also on a non-SEDAR website for which a URL link is provided. Often this link will take the user to a specific webpage on the reporting issuer’s website. All material related to the meeting, even if it was not mailed, must be posted on this non-SEDAR site. This posted material would include any press releases regarding the meeting issued between the mailing and meeting date.
Duration of Website Postings. Material must be posted on the non-SEDAR site for at least one year from the mailing date.
Toll-Free Telephone. The reporting issuer must also provide a toll-free number for securityholders to use to request that a full set of proxy material be sent to the securityholder by ordinary mail.
Hard Copies. The reporting issuer will still need to print some copies of the meeting materials; however print quantities should be greatly reduced from requirements for a full mailing. When a reporting issuer distributes material by Notice & Access, it still needs to provide full sets of meeting materials to those securityholders with standing instructions to receive these materials, as well as to those securityholders who request meeting materials after receiving the Notice & Access package.
Request Card. If the reporting issuer mails a Notice & Access package to its securityholders, it must provide fulfillment. This means that the securityholder who has received the notice package may request a full set of meeting materials which must be sent to the requesting securityholder within prescribed time guidelines. Requests made before the meeting date must be sent within 3 business days. Requests made after the meeting date must be sent within 10 calendar days.
Voting. There is no change in how securityholders vote their shares. A Voting Instruction Form or a Form of Proxy is included in the notice package, and the normal voting options are available.
The content of this article is intended to provide general information for the reader and is not intended as advice or an opinion to be relied upon in relation to any particular circumstance. For specific applications of the law to a particular set of circumstances, the reader should seek professional advice.
