CSA seeks “access equals delivery” for most filings

In a move that may aggravate investor advocates but should please issuers, the Canadian Securities Administrators (CSA) are proposing to adopt an “access equals delivery” model for most public company filings.

The CSA proposed rule changes that will allow issuers to meet their regulatory obligations for providing investors with disclosure — such as prospectuses and annual and quarterly financial statements — by uploading those documents to the regulators’ online system, SEDAR, and issuing a news release alerting investors to their availability.

Issuers would not be able to rely on the AED model for materials that require immediate shareholder action, such as proxy circulars, and takeover and issuer bid circulars.

The reform is designed to reduce the costs of delivering physical documents, such as printing and mailing costs, while preserving the ability of investors to request paper documents.

However, investor advocates have long resisted a shift to access equals delivery, citing concerns that the approach could disenfranchise certain investors and reduce shareholder engagement.

For instance, in a previous CSA consultation on the AED idea, the Canadian Foundation for Advancement of Investor Rights (FAIR Canada) suggested that regulators should require companies to deliver documents electronically rather than just providing access.

“FAIR Canada would be supportive of an ‘electronic delivery equals delivery’ regime for most documents and paper delivery for proxy-related documents,” it said at the time.

In a notice setting out its latest proposals, the CSA said, “The proposed AED model provides a more cost-efficient, timely and environmentally friendly manner of communicating information to investors than paper delivery. In our view, the proposed AED model reduces regulatory burden on issuers without compromising investor protection.”

The regulators also said the reform reflects the evolution of capital markets, including the growing reliance on online communication channels.

“We recognize that electronic access to documents facilitates more efficient communication with investors than paper delivery, and reduces regulatory burden for issuers,” said Louis Morisset, chair of the CSA and president and CEO of the Autorité des marchés financiers (AMF), in a release.

“The proposed access equals delivery model is intended to modernize the way documents are made available for the benefit of investors and issuers,” he said.

The proposals are out for a 90-day comment period, ending July 6.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.