Publications

Get Your SEDAR Profile: Changes to Private Placement Filing Requirements Effective May 24 & June 30, 2016

Published:

June 6, 2016

On June 30, 2016, amendments to National Instrument 45-106 Prospectus Exemptions and related changes to Companion Policy 45-106 Prospectus Exemptions, including the requirement to use the new Form 45-106F1 Report of Exempt Distribution will come into force. But one important change was effective on May 24, 2016: no Canadian jurisdiction will accept paper filings of the new Form 45-106F1 Report of Exempt Distribution. All issuers, both reporting and non-reporting, must now file all Reports of Exempt Distribution electronically via SEDAR (with the exception of BC and Ontario issuers which must file the Reports via their respective jurisdiction’s electronic filing portals). While all public companies have a SEDAR profile, very few private ones do. If a private company doesn’t have a SEDAR profile, one must be created for it before it can complete a private placement for which it must file a Report of Exempt Distribution – and the Report must be filed no later than 10 days after the distribution date.

Here’s an overview of the Report of Exempt Distribution filing requirement and the new electronic filing requirements and Report of Exempt Distribution form.

Report of Exempt Distribution. An issuer must file a Report of Exempt Distribution whenever an entity completes a private placement and relies on certain prospectus exemptions under National Instrument 45-106, including (but not only) these popular ones: accredited investor exemption (section 2.3); family, friends and business associates exemption (section 2.5); offering memorandum exemption (section 2.9); and minimum amount investment exemption (section 2.10). The issuer must file the report no later than 10 days after the distribution date; if there are multiple distribution dates listed in the Report of Exempt Distribution, all such distributions must occur within a 10-day period and the Report of Exempt Distribution must be filed no later than 10 days after the first distribution date. A Report of Exempt Distribution must be filed in the jurisdiction in which the entity is formed or has its head office and in each jurisdiction where the investor resides. For example, ABC Inc., a private company, has its head office in Nova Scotia and issues securities pursuant to a private placement (relying on the accredited investor exemption) to investors resident in NB and Alberta; ABC Inc. must file a Report of Exempt Distribution via SEDAR with the Provinces of NS, NB and Alberta.

New Electronic Filing Requirement. Effective as of May 24, 2016, no Canadian province or territory will accept paper filings of a Form 45-106F1 Report of Exempt Distribution. All issuers, both reporting and non-reporting, must now file all Reports of Exemption Distribution via SEDAR and pay all applicable filing fees for the Report of Exempt Distribution filings at the time of SEDAR filing through a SEDAR user’s electronic bank account. In BC and Ontario, the Report of Exempt Distribution must be filed through the respective jurisdiction’s electronic filing portals. While all public companies have a SEDAR issuer profile, very few private ones do. If a private company (filing in Canada outside of BC or Ontario) doesn’t have a SEDAR issuer profile, one must be created for it – and to do that it will need to retain a party with SEDAR filing capabilities (which includes many law firms). The following information is required to create a SEDAR issuer profile:

Contact name.
Contact telephone number and email address.
Manner of formation of the issuer.
Date of formation of the issuer.
Jurisdiction of formation.
Industry classification.
Size of issuer’s assets (under $5M, $5M – $25M, $25M – $100M, $100M – $500M, etcetera).
Financial year end.

New Form of Report of Exempt Distributions. On June 30, 2016, amendments to National Instrument 45-106 Prospectus Exemptions and related changes to Companion Policy 45-106 Prospectus Exemptions, (published on April 7, 2016) will come into force. This includes the requirement to use the new Form 45-106F1 Report of Exempt Distribution. However, as of May 24, 2016, the old “paper” form of Report of Exempt Distribution can no longer be used. For private placements completed after May 24, 2016, a “transitional” form of report must be used; for private placements completed after June 30, 2016, the new form of report must be used; and during the “transition period” of the implementation of the Amendments, either the transitional or the new form can be used. Here’s a chart that outlines when each report should (or can) be used.

Distribution Dates under Private Placement	Filing deadline	Report Required
June 20, 2016 to June 29, 2016	June 30, 2016	Transitional form of report
June 21, 2016 to June 30, 2016	July 1, 2016	Either Transitional or New form of report
June 27, 2016	July 7, 2016	Transitional form of report
June 28, 2016 to July 1, 2016	July 8, 2016	Either Transitional or New form of report
June 30, 2016 to July 8, 2016	July 10, 2016	New form of report
July 4, 2016	July 14, 2016	New form of report
July 5, 2016 to July 14, 2016	July 15, 2016	New form of report

The new form of Report of Exempt Distribution also requires additional information that the old “paper” form (the one that was in place before May 24, 2016) didn’t, and the transitional form doesn’t, require, including:

Additional details about the issuer including its size, primary business activity, NAICS industry code and number of employees. Specific details about the prospectus exemptions relied on (both on an aggregate and per investor basis).
If a distribution has occurred in Saskatchewan, Ontario, Québec, New Brunswick or Nova Scotia, a listing of the offering materials that are required under the prospectus exemption relied on filed with or delivered to the relevant securities regulatory authority or regulator.
Details on compensation provided, including describing the relationship to the issuer.
Details on the directors, executive officers and promoters of the issuer.

Please contact your McInnes Cooper lawyer or any member of our McInnes Cooper Corporate Finance and Securities Team to discuss this topic or any other legal issue.

McInnes Cooper has prepared this document for information only; it is not intended to be legal advice. You should consult McInnes Cooper about your unique circumstances before acting on this information. McInnes Cooper excludes all liability for anything contained in this document and any use you make of it.

© McInnes Cooper, 2016. All rights reserved. McInnes Cooper owns the copyright in this document. You may reproduce and distribute this document in its entirety as long as you do not alter the form or the content and you give McInnes Cooper credit for it. You must obtain McInnes Cooper’s consent for any other form of reproduction or distribution. Email us at [email protected] to request our consent.

Team Members ()

Publications ()

News ()

Pages ()

Services ()

Get Your SEDAR Profile: Changes to Private Placement Filing Requirements Effective May 24 & June 30, 2016

Published:

Share

Share

Related Services

Related Industries

Related Publications

Limited Options: New Employee Stock Option Tax Rules Effective July 1, 2021

Professional Health Services Sector M&A Deals: 5 Legal Positioning Tips

Estate Planning: Two Trust Solutions

China – Canada Connections: Estate Planning Obstacles & Opportunities

Expedite Entry of Foreign “Essential” Workers to Canada: 10 Essential Tips

New Trust Reporting Requirements Effective for 2021 Tax Year

Getting the Deal Done: 3 Key Terms to Conserve Cash in M&A Deals

3 Key Estate Planning Considerations for Business Owners

3 Key Estate Plan Benefits & Ingredients

Canadian Governance Diversity Disclosure Obligations: Get on Board

Top 5 Legal Considerations When Launching a FINTECH Startup

Coping with COVID-19: The Impact of Public Health Measures on Parenting Orders

Coping with COVID-19: 5 Steps to Compliant Socially Distant AGMs

Still an Option: Feds Delay New Tax Rules for Employee Stock Options

CSA Staff Notice 51-359: Corporate Governance Compliance by Public Cannabis Co.’s

Toward More Transparency: 3 More Key Changes to the Canada Business Corporations Act (CBCA)

“Register for Individuals with Significant Control”: 5 Key Facts CBCA Corporations Need to Know to Comply

S.A. v. Metro Vancouver Housing Corp.: Can you trust a Henson trust?

Cannabis Compliance: 3 Tips to Help Cannabis Industry Reporting Issuers Comply with Securities Law Disclosure Obligations

Incorporating a Business? Incorporating in N.S. Will Soon Be More Attractive

P.E.I. Joins (Most of) the Rest of Canada: 3 Ways the New P.E.I. Business Corporations Act Will Modernize Prince Edward Island Corporations

You’ve Come a Long Way, CBCA: 3 Key Changes Modernize the Canada Business Corporations Act (CBCA)

More Valuable Than Money? The 5 Most Common Equity Compensation Plans

How the Pros Get Into Canada: 5 FAQs About the NAFTA Professional Work Permit

The Legal Reality: Canadian Appeal Court decides “Virtual Presence” is enough for production order for user information against non-Canadian company in British Columbia (Attorney General) v. Brecknell

A Lump of Coal for Christmas: Supreme Court of Canada Confirms Auditor Negligent & Liable for $40 Million in Livent v. Deloitte

Is cryptocurrency the right tool for your company to raise capital? 5 FAQs about Initial Coin Offerings (ICO)

Canada’s Private Corporation Tax Proposals: Year End Planning in the Face of Uncertainty

It’s Official: “Facilitation Payments” to Foreign Public Officials Violates Canada’s Corruption of Foreign Public Officials Act (CFPOA)

2018 Planning Starts Now for TSX-Listed Issuers: TSX Updates Disclosure Requirements

No NAFTA? No Problem – For Temporary Business Travel, That Is

Transformative Changes to Nova Scotia DB Funding Framework Possible

McInnes Cooper’s Romain Viel in Taxnet Pro™ | CRA’s Super Priority Gains Strength: Federal Crown’s deemed trust priority for unremitted GST/HST survives bankruptcy in Canada v. Callidus Capital Corporation

CRA’s Super Priority Gains Strength: Federal Crown’s deemed trust priority for unremitted GST/HST survives bankruptcy in Canada v. Callidus Capital Corporation

Cross-Border Caution: 5 Anti-Corruption Law Compliance Program Tips

Proposed Changes to Business Income Tax Rules: A Gamechanger for Private Business Owners

Steering clear of personal liability for oppression: Supreme Court of Canada offers guidance to corporate leaders in Wilson v. Alharayeri

Like it or Not: Supreme Court of Canada decides class action against Facebook can go ahead in B.C. – despite its terms of use in Douez v. Facebook, Inc.

All in the Family: The Family Shareholders’ Agreement

Northern Exposure: Anti-Corruption Law Exposes Payments to Governments Under Extractive Sector Transparency Measures Act (ESTMA)

Estate Planning in the Age of Medical Assistance In Dying (MAID)

Cannabis Legalization in Canada: Seeds have sprouted, but the branches are still bare

Nip it in the Bud: A 5 Step Plan for Employers to Prepare for Cannabis Legalization in Canada

Follow These 5 Steps for Compliant Disclosure on Social Media

Cyber Security: A 5-Step Data Breach Risk Mitigation Plan for Corporate Boards & Directors

The Atlantic Immigration Pilot (AIPP): 5 Key Opportunities & Risks for Atlantic Canada Employers

Canadians With U.S. Connections: Key Cross-Border Estate Planning Strategies

Don’t Sell Yet: How Principal Residence Exemption (PRE) Changes Affect Trusts

The law of unintended consequences: Supreme Court of Canada speaks on the rectification of transactions in Jean Coutu Group (PJC) Inc. v. Canada (Attorney General) and Canada (Attorney General) v. Fairmont Hotels Inc.

Businessperson or “Business Visitor”: Canada’s Business Visitor Visa Rules

Ontario Follows Suit With Securities Act Changes Tightening the Belt on Insider Trading Regulation

Weighing The Options: 5 Key Considerations When Deciding Between Federal & Provincial Incorporation

NS Dives into Pooled Registered Pension Plans (PRPP)

Supreme Court of Canada Decides Income Tax Act Sections are Unconstitutional – and Strengthens Solicitor-Client Privilege in Canada (Attorney General) v. Chambre des notaires du Québec & Canada (National Revenue) v. Thompson

3 Tips to Use “Forward-Looking Information” to Enhance Your Investor Relations

From Startup to Exit: 5 Key Stages of the Financing Lifecycle

5 Key Changes to Early Warning Reporting System Effective May 9, 2016

New Early Warning Reporting System Exemptions for Certain Securities Lending Arrangements Effective May 9, 2016

The New Nova Scotia Mineral Resources Act: The Good, The Risky & The Neutral

From Watershed Decision to Watershed Law: Government Proposes Physician-Assisted Dying Law in Bill C-14 An Act to amend the Criminal Code and to make related amendments to other Acts (medical assistance in dying)

5 Key Changes Streamline Venture Issuer Obligations

Tax Implications of Personal Services Businesses (PSB) Status & Strategies to Avoid It

New Kid on the Block: Crowdfunding Joins Traditional Equity-Based Funding Options for Startups & SMEs

Beneficiary’s Purpose Matters: Invalidation of Bequest to Neo-Nazi Group as Against Public Policy Withstands Appeal in McCorkill v. Streed, Executor of the Estate of Harry Robert McCorkill (aka McCorkell), Deceased

Looking For Investment? 5 Investee FAQs About Atlantic Canada’s Small Business Investor Tax Credit Programs

Investing in Atlantic Canada: NB Increases Small Business Investor Tax Credit Rate

Make Way for Women on Boards: 5 New Disclosure Obligations

No More Criminalization of Physician-Assisted Dying: The Ripple Effects of A Watershed Decision in Carter v. Canada (Attorney General)