Canada Eases Regulatory Constraints on IPOs to Support Competitiveness of Capital Markets

The Canadian Securities Administrators (CSA) have issued a set of coordinated blanket orders effective April 17, 2025, designed to ease regulatory constraints on public and exempt market issuers.

The measures, issued across multiple jurisdictions, target key barriers faced by companies entering or maintaining a presence in Canadian capital markets. They provide exemptions related to financial disclosure requirements, post-IPO capital raising, and reinvestment limitations in the exempt market.

Order 41-930: Prospectus and Disclosure Relief for New Reporting Issuers

The Alberta Securities Commission (ASC), on behalf of participating CSA members, published Coordinated Blanket Order 41-930 to streamline disclosure obligations for companies pursuing a public listing in Canada. The order introduces significant exemptions under National Instruments 41-101, 51-102, and 62-104:

Third-Year Financial Statements: Issuers are now exempt from including the statement of comprehensive income, changes in equity, and cash flows for the third most recently completed financial year. This exemption applies to several prospectus and circular forms, including Form 41-101F1 and materials used in take-over and issuer bid contexts.

Specified Pricing in Marketing Materials: During the “waiting period” between the filing of a preliminary prospectus and receipt of a final receipt, investment dealers may now use marketing materials and term sheets containing specific pricing-related information, such as offering size or share count, without requiring prior inclusion in the preliminary prospectus. This exemption applies provided that:

The issuer files a public news release with the specified pricing data;

The materials otherwise derive from the preliminary prospectus; and

Mathematical derivations and limited additional elements (e.g., dealer contact info) are permitted.

Promoter Certificate Exemptions: Issuers are also exempt from the requirement to file promoter certificates if:

The issuer is already a reporting issuer for at least 24 months;

The offering is not for asset-backed securities;

The promoter is neither a control person, officer, nor director at the time of filing.

These changes are expected to reduce compliance costs and eliminate redundant financial reporting burdens, particularly for seasoned private companies seeking to go public via traditional IPO routes.

Order 45-933: Exempt Market Reinvestment Limit Adjustment

A second measure, Coordinated Blanket Order 45-933, directly targets exempt market limitations under National Instrument 45-106 and is applicable in Alberta, Ontario, Québec, Saskatchewan, New Brunswick, and Nova Scotia.

The order excludes reinvested proceeds from the 12-month investment limit calculation under the Offering Memorandum (OM) exemption, subject to conditions. Previously, an “eligible investor” was limited to $30,000 unless suitability advice increased the limit to $100,000. Now:

Eligible investors receiving investment advice may invest up to:

$100,000, plus up to $100,000 of reinvested proceeds from the sale of the same issuer’s securities in the prior 12 months.

For other categories:

Non-eligible investors remain capped at $10,000;

Eligible investors without suitability advice remain capped at $30,000.

The CSA has acknowledged repeated industry feedback calling for increased flexibility to reflect investor sophistication and to support broader exempt-market capital formation.

Rationale and Impact

CSA Chair Stan Magidson commented, “The actions announced today represent the start of incremental measures to support the competitiveness of Canada’s capital markets. We are making it easier and more cost-effective for businesses to raise capital and grow in Canada, without sacrificing investor protection.”

The regulatory actions reflect a pivot toward modernizing disclosure standards and adapting to global market conditions, especially as companies weigh jurisdictions for IPO listings. The CSA noted these measures are responsive to sustained stakeholder concerns regarding the burdens of accessing Canadian public and private markets.

Implementation and Scope
All three blanket orders—prospectus relief, post-IPO fundraising, and reinvestment limits—took effect on April 17, 2025. While Order 41-930 and 45-933 apply to all participating CSA jurisdictions, the reinvestment exemption specifically targets six provinces where the OM exemption’s investment limit framework is in place.

The orders remain in effect subject to review and may be replaced by future harmonized rule amendments. Issuers, investors, and market intermediaries are advised to review the orders in full to understand eligibility, required disclosures, and recordkeeping expectations.

The CSA continues to invite comment from market participants as it explores additional competitiveness-focused reforms.