The Canadian Securities Administrators (CSA) have published for a request for comment to proposed amendments to the business acquisition report (BAR) requirements for reporting issuers that are not venture issuer (e.g. an investment fund). The ninety-day comment period ends December 4, 2019.
The proposed amendments and changes impact National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102); Companion Policy 51-102CP Continuous Disclosure Obligations (Companion Policy 51-102CP); Companion Policy 41-101CP to National Instrument 41-101 General Prospectus Requirements (Companion Policy 41-101CP); Companion Policy 44-101CP to National Instrument 44-101; and, Short Form Prospectus Distributions (Companion Policy 44-101CP) (together, the Proposed Amendments).
The aim of the Proposed Amendments is to reduce regulatory burden and address certain concerns expressed by stakeholders by narrowing the circumstances under which a BAR must be filed.
Currently, a BAR must be filed by reporting issuer who is not an venture issuer after completing a significant acquisition. Part 8 of NI 51-102 (Part 8) sets out three significance tests for the filing of a BAR: the asset test, the investment test, and the profit or loss test. A filing of a BAR under Part 8 for an acquisition of a business or related businesses that is a significant acquisition must occur when:
- a reporting issuer that is not a venture issuer, if the result from any one of the three significance tests exceeds 20%; and,
- a venture issuer, if the result of either the asset test or investment test exceeds 100% (collectively, the BAR requirements).
The BAR requirements were introduced in 2004 to provide investors with relatively timely access to historical financial information on a significant acquisition. They also require a reporting issuer that is not a venture issuer to prepare and file pro forma financial statements.
CSA Notice and Request for Comment Proposed Amendments to National Instrument 51-102 Continuous Disclosure Obligations and Changes to Certain Policies Related to the Business
Acquisition Report Requirements, is available for download from the websites of the participating jurisdictions.
For more information, please call Barbara Hendrickson at BAX Securities Law (416) 601 -1004.
This publication is not intended to constitute legal advice. No one should act on it or refrain from acting on it without consulting with a lawyer. BAX does not warrant or guarantee the accuracy or currency or completeness of the publication. No part of this publication may be reproduced without the prior written permission of BAX Securities Law.