Corporate Finance in Canada
Canada has well-developed and sophisticated capital markets. The main sources of capital are Canadian chartered banks, other financial institutions (including pension funds, mutual funds and insurance companies), public markets and government agencies. Securities of Canadian and foreign public companies can be listed and traded on one or more of Canada’s stock exchanges. The Toronto Stock Exchange (TSX) is the country’s largest stock exchange. Canada also has active over-the-counter markets for a variety of other securities, including, in particular, debt securities. Canadian chartered banks are the principal source of revolving lines of credit and term loans.
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Public Offerings and Private Placements
In Canada, securities law is currently regulated under provincial jurisdiction and consequently each Canadian province and territory has its own separate securities regulator, as well as its own securities legislation. Nonetheless, securities legislation in Canada is largely harmonized through the use of national and multilateral instruments adopted by the Canadian Securities Administrators (CSA), an umbrella organization comprising all of the provincial securities regulators, and implemented as law by the provinces. Further, the “principal regulator” or “passport” system adopted by each province of Canada (other than Ontario, which is Canada’s largest capital market) allows many aspects of securities law to be effectively regulated by only one participating jurisdiction (i.e., the “principal regulator” in the circumstances), in addition to Ontario. These aspects include the review and receipt of prospectuses, compliance with continuous disclosure obligations and obtaining exemptions from various provisions of securities law.
When debt or equity securities are offered to the public in Canada, whether as part of an initial public offering (IPO) or not, a prospectus must be filed with the securities regulatory authorities in those provinces and territories where the securities are being offered. The prospectus will be reviewed by the principal regulator under the passport system described above. A copy of the prospectus must also be provided to potential investors. The prospectus must contain full, true and plain disclosure of the nature of the securities being offered and the business of the issuer.
Where securities are being offered in Québec, an English language prospectus must also be translated into and distributed in French.
The requirement to prepare a prospectus can be avoided where the securities are offered on an exempt basis exclusively to institutional or other “accredited investors” by way of a private placement, although in such cases market practice may nonetheless dictate the delivery to investors of an “offering memorandum” containing disclosure that is often substantially equivalent to a prospectus. There are a number of other prospectus exemptions, including those for the issue of securities by “private issuers” or to employees, or the issue of short-term commercial paper with an approved rating and bank debt, in which case generally either no disclosure document or an abbreviated one is used. Securities sold on an exempt basis may be subject to resale restrictions.
Shareholders of Canadian public companies are not generally afforded statutory or contractual pre-emptive rights. Accordingly, new equity issues are typically effected by way of public offering or private placement, rather than by way of rights offerings to existing shareholders.
Issuers with equity securities listed on certain Canadian exchanges can take advantage of Canada’s short-form prospectus distribution system, which enables capital to be raised in the public markets quickly by preparing and filing a shorter prospectus that incorporates by reference the issuer’s most recent financial statements and other continuous disclosure documents. Generally, issuers eligible for this system can clear a prospectus with the provincial securities authorities within four business days of filing a preliminary prospectus. In the case of more senior issuers, it is common for Canadian underwriting syndicates to enter into a “bought deal” arrangement. This constitutes an enforceable agreement by the underwriters to purchase the securities being offered for sale, even before the filing of a preliminary prospectus, with the result that the syndicate incurs the risk of price fluctuations in the market from the time of signing the “bought deal” letter with the issuer until the closing of the offering. In such cases, a preliminary prospectus must be filed within four business days of the signing of the “bought deal” letter, and the syndicate may begin to solicit purchasers immediately upon the signing of the letter and the issuance of a news release. For issuers that do not qualify under the short-form system, prospectus clearance can often take from three to six weeks, and sometimes longer.
Canadian securities laws also provide issuers with the ability to file a base shelf prospectus for an aggregate dollar amount of securities (which may be unallocated between debt, equity and other securities) for subsequent issuance over a period of up to 25 months. At the time of an actual distribution of securities qualified by the base shelf prospectus — and not later than two business days after the determination of the offering price of the securities — the issuer simply files a relatively brief supplement to the prospectus containing the specific terms of the securities then being offered, as well as any additional information that was not available to the issuer at the time the prospectus was filed. Although there are exceptions (e.g., where innovative, structured or derivative products are being distributed), supplements to the base shelf prospectus are not reviewed, allowing issuers to act quickly and take advantage of narrow windows of opportunity for financing in the markets.
如果向机构投资者或法规中特定的“有资格的投资者”(“accredited investors”） 以私募的方式发行证卷，发行人可以按特定豁免条款为依据而不必准备招股说明书。尽管如此，按市场惯例则往往还是要求向投资方提供包含信息披露的“投股备忘录”，该备忘录基本上等同于招股说明书。除此之外，还有一些其它关于招股说明书豁免的规定，比如由“私营发行人”发行证券，或向员工发行证卷，以及达到评级要求与银行债务批准的商业票据的短期发行。一般来说，在此种情况下，可以豁免遵守提供招股说明书的规定，或者使用简写招股书。以这种形式发行的证券在第二次出售时有可能会受到限制。
对于某些有证券上市在加拿大交易所的发行人来说，可以利用加拿大简式招股说明书(short-form prospectus) 的来发行证券。这种系统可以通过提交一份较短的招股说明书（包括以参考形式引入发行人最新财务报表和其它持续信息披露文件）来迅速地融资。一般来讲，那些有资格采用这种方式的发行人可以在提交初步招股说明书的四个工作日以内获得省证监局的批准。对于那些更资深的发行人来说，一种常见方式是采用加拿大承销团的“包销”方式来安排进行。这样会形成一个具有强制执行力的包销协议。承销商将在初步招股说明书提交前即承诺购买全部要发行的证券，而且该承销团从签署包销协议时起即承担此后股票发行市场上价格波动的风险，直至发行截止。在这种情况下，初步招股书说明书必须在签署“包销”协议后的四个工作日之内提交。协议签署和新闻发布后，该承销团可以立刻开始招揽买主。对那些没有资格采用简易系统的发行人来说，招股说明书的批准期限往往需要三至六个星期，甚至更长。
加拿大的证券法还规定，发行人可以为后续25个月内要发行的证卷提交一份含有证券总额的发行计划基础招股说明书 (base shelf prospectus)（此证卷总额可以不需要在债务性，权益性和其它证卷之间进行分配）。当要实际发行符合基础招股说明书条件的证卷时，而不迟于确定证卷价格后的两个工作日，发行人只需递交一份简短补充文件来添补将要发行证卷的基础招股说明书，该文件需含有发行证卷的具体条款和发行人在递交基础招股说明书时不知悉的额外资料信息。尽管有些例外（诸如有关新创、结构化或衍生证卷的发行情况），基于现有招股说明书的补充文件不需审查，使发行人能迅速采取行动，并充分利用市场融资机会的最佳期限。