CSA Staff Notice: CSA Coordinated Blanket Order 51-930 Exempting CBCA Reporting Issuers from Director Election Form of Proxy Requirement

CSA Staff Notice
CSA Coordinated Blanket Order 51-930 Exempting Reporting Issuers Incorporated under the Canada Business Corporations Act from the Director Election Form of Proxy Requirement January 31, 2023
PART 1 - Introduction
On January 31, 2023, the Canadian Securities Administrators (CSA) published an exemption from the director election form of proxy requirement in subsection 9.4(6) of Regulation 51-102 respecting Continuous Disclosure Obligations (Regulation 51-102) for reporting issuers incorporated under the Canada Business Corporations Act (CBCA) in respect of the uncontested election of directors. The CSA has implemented the relief through local blanket orders that are substantively harmonized across the country. This notice contains CSA staff’s views about the exemption in the local blanket orders (collectively, the Blanket Orders).
PART 2 - Description of the Blanket Orders
The Blanket Orders exempt CBCA-incorporated reporting issuers from the director election form of proxy requirements in subsection 9.4(6) of Regulation 51-102 in respect of the uncontested election of directors.
PART 3 - Background
Reporting issuers incorporated under the CBCA must send a form of proxy to shareholders when giving notice of a shareholder meeting. Before August 31, 2022, CBCA-incorporated reporting issuers were generally required to provide an option for shareholders to vote “for” director candidates or to “withhold” their shares from voting. This requirement aligned with that in subsection 9.4(6) of Regulation 51-102, which requires that a form of proxy sent to securityholders of a reporting issuer provide an option for the securityholder to specify that the securities registered in the name of the securityholder must be voted or withheld from voting in respect of the election of directors. On August 31, 2022, amendments to the CBCA and the Canada Business Corporations Regulations, 2001 (CBCR) (the Majority Voting Amendments) came into effect that generally require “majority voting” for each candidate nominated for director in uncontested director elections of CBCA-incorporated reporting issuers. Pursuant to subsection 149(1) of the CBCA and subsection 54.1(2) of the CBCR, where the Majority Voting Amendments apply, the form of proxy must provide shareholders with the option to specify whether their vote is to be cast “for” or “against” each candidate nominated for director, rather than “voted” or “withheld” from voting as required by subsection 9.4(6) of Regulation 51-102. Some stakeholders have raised concerns about the discrepancy between these requirements in terms of voting options to be provided to shareholders of CBCA-incorporated reporting issuers. The Blanket

Orders aim to respond to this concern by exempting CBCA-incorporated reporting issuers from the requirement to specify that securities be voted or withheld from voting in respect of the election of directors, as required by subsection 9.4(6) of Regulation 51-102, where the reporting issuers comply with Majority Voting Amendments. The CSA is considering whether future proposed amendments to subsection 9.4(6) of Regulation 51-102 are appropriate. Any such amendments would be adopted by the CSA through the normal rule-making procedures on a coordinated basis.
PART 4 - Questions
If you have any questions regarding the Blanket Orders, please contact any of the following:
Michel Bourque
Senior Regulatory Advisor
Autorité des marchés financiers
514 395-0337, extension 4466
Michel.Bourque@lautorite.qc.ca
Charlotte Verdebout
Senior Analyst, Supervision of Issuers and Insiders Autorité des marchés financiers 514 395-0337, extension 4339 Charlotte.Verdebout@lautorite.qc.ca Michael Balter Manager, Corporate Finance Branch Ontario Securities Commission 416 566-7554 mbalter@osc.gov.on.ca Joanna Akkawi Senior Legal Counsel, Corporate Finance Branch Ontario Securities Commission 416 593-8179 jakkawi@osc.gov.on.ca.ca Trevor Fairlie Legal Counsel, Office of Mergers & Acquisitions Ontario Securities Commission 416 593-2323 tfairlie@osc.gov.on.ca Tim Robson Manager, Legal, Corporate Finance Alberta Securities Commission 403 355-6297 timothy.robson@asc.ca Sebastian Maturana Legal Counsel, Corporate Finance Alberta Securities Commission 403 355-4863 Sebastian.Maturana@asc.ca Gordon Smith Associate Manager British Columbia Securities Commission 604 899-6656 gsmith@bcsc.bc.ca

Heather Kuchuran
Director, Corporate Finance
Financial and Consumer Affairs Authority of
Saskatchewan
306 787-1009 heather.kuchuran@gov.sk.ca
Patrick Weeks
Deputy Director – Corporate Finance
Manitoba Securities Commission
204 945-3326 patrick.weeks@gov.mb.ca
Frank McBrearty
Senior Legal Counsel
Financial and Consumer Services Commission,
New Brunswick
506 658-3119 frank.mcbrearty@fcnb.ca
Peter Lamey
Legal Analyst Corporate Finance
Nova Scotia Securities Commission
902 424-7630 peter.lamey@novascotia.ca