CSA publishes for comment updates to continuous disclosure “access equals delivery”

On November 19, 2024, the Canadian Securities Administrators (CSA) published for comment amendments to its proposed “access equals delivery” model (the AED Model) for continuous disclosure documents, which, if implemented, would allow most reporting issuers (other than investment funds) to satisfy the requirement to deliver annual financial statements, interim financial statements and related management’s discussion and analysis to securityholders by (i) filing the applicable document on SEDAR+; (ii) on the same day, posting the document to their website; and (iii) issuing and filing a news release on SEDAR+, announcing that the disclosure document is accessible electronically, the availability of a notification function on SEDAR+ to alert investors to filings, a paper copy of the document may be obtained upon request, and any standing instructions regarding delivery of the applicable document in electronic or paper form will continue to be followed. This update follows the CSA’s AED Model for prospectuses that came into force in April 2024.

What you need to know

• The amended AED Model would apply to all non-investment fund reporting issuers, including venture issuers.
• The amended AED Model would apply to annual and interim financial statements and related management’s discussion and analysis.
• The amended AED Model updates the CSA’s initial 2022 proposal to address concerns raised during the initial public comment period regarding the potential negative impacts on retail investors. We discuss the CSA’s initial 2022 proposal in more detail in our previous bulletin, “CSA publishes for comment proposed access equals delivery model for prospectuses, financial statements and MD&A”.
• Unlike the CSA’s initial 2022 proposal, the amended AED Model would not be available to SEC foreign issuers or designated foreign issuers that will need to comply with applicable rules of their home jurisdiction.
• The amended AED Model would not override any standing instructions of a beneficial securityholder to receive continuous disclosure documents in electronic or paper form.
• The public comment period for the amended AED Model ends on February 17, 2025.

Summary of changes to the CSA’s 2022 proposal

In addition to providing clarification and guidance on several requirements contained in the CSA’s 2022 proposal, the amended AED Model contemplates the following changes to the CSA’s 2022 proposal.

Prior notification news release requirements

The amended AED Model would require issuers to issue and file a news release on SEDAR+ at least 25 days before first using the amended AED Model, announcing that continuous disclosure documents will be accessible electronically, that a notification feature is available on SEDAR+ to notify investors of filings made by the issuer, how to obtain copies of the issuer’s continuous disclosure documents and that standing instructions regarding delivery of continuous disclosure documents may be provided. Similarly, an issuer that has used the amended AED Model to deliver continuous disclosure documents would be required to issue and file a news release on SEDAR+ at least 25 days before ceasing to use the amended AED Model, announcing that the issuer will no longer provide electronic access to continuous disclosure documents and that the issuer will comply with the delivery requirements under securities legislation.

Notice to be provided with proxy-related materials

Issuers relying on the amended AED Model would be required to send a standalone document to securityholders together with their proxy materials, reminding securityholders of the availability of the SEDAR+ notification feature, providing instructions on how to obtain copies of the issuer’s continuous disclosure documents and that securityholders may provide standing instructions regarding delivery of continuous disclosure documents.

Website posting requirement

The amended AED Model would require that issuers that have a website post continuous disclosure documents to their website on the same day that the applicable continuous disclosure documents are filed on SEDAR+. Issuers relying on the amended AED Model would also be required to disclose on their website the same information that would be provided to securityholders with proxy materials.

Specific request for comments

While the CSA has requested comments on the amended AED Model generally, the CSA has specifically asked market participants to comment on whether there would be any practical issues caused by requiring issuers to post continuous disclosure documents on their website on the same day that those continuous disclosure documents are filed on SEDAR+. The public comment period for the amended AED Model ends on February 17, 2025.