Regulatory Alerts2021-03-25
CSA Staff Notice 41-307 (Revised): Concerns Regarding Issuer Financial Condition and Prospectus Proceeds Sufficiency
The Canadian Securities Administrators issued this revised staff notice to alert issuers and advisors about regulatory scrutiny regarding financial condition and proceeds sufficiency in prospectus offerings. The notice outlines statutory grounds for receipt refusal, emphasizing that disclosure alone is insufficient if an issuer lacks resources to meet short-term liquidity requirements or accomplish the offering's stated purpose. Regulators may raise comments on missing pricing information, offering structures like base shelf prospectuses, inadequate use of proceeds disclosure, and insufficient risk factor reporting to ensure investor protection.
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