6 | Let’s Not Get Physical: Access Equals Delivery
In April 2022, the CSA published for comment proposed amendments to implement an access equals delivery model (AED model) for prospectuses, annual financial statements, interim financial reports and related MD&A for non-investment fund reporting issuers. Under the proposed AED model, delivery of a final prospectus and any amendment would be effective once it is filed on SEDAR and a news release is issued and filed indicating that the document is available electronically and that a paper or an electronic copy can be obtained upon request. A preliminary prospectus and any amendment would not require the issuance and filing of a news release, and the CSA is specifically seeking comment on whether a news release is necessary for the filing of financial statements and related MD&A. The proposed amendments resulted from a public consultation the CSA undertook in early 2020 on the merits of an AED model for which a large majority of commenters, including Davies, expressed support. Although the CSA considered extending the AED model to other types of documents such as proxy-related materials, takeover bid circulars and issuer bid circulars, it determined that doing so with respect to documents that require immediate shareholder attention and participation could raise investor protection concerns and have a negative impact on shareholder engagement. For our views on the CSA’s proposed AED model, please refer to our latest comment letter.
KEY TAKEAWAY
Slowly entering the digital age. An AED model would provide issuers with a more cost-effective, timely and environmentally friendly method of communicating information than physical delivery. However, the proposed AED model may not go far enough. For example, investors would be able to request paper copies of prospectuses, and those prospectuses would have to be sent within two business days. As a result, issuers may print numerous copies in advance as a precautionary measure, with substantially all of those printed copies never being used, undercutting some of the intended efficiencies and environmental benefits.
Under the proposed AED model, delivery of a final prospectus and any amendment would be effective once it is filed on SEDAR and a news release is issued and filed indicating that the document is available electronically and that a paper or an electronic copy can be obtained upon request.
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Governance Insights 2022
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