May 3, 2021 Securities

Montréal – The Autorité des marchés financiers (the “AMF”) has seen a significant number of confidential prospectus pre-files submitted in recent months and is providing best practice guidance to issuers to assist in their capital raising efforts.

The harmonized process for full reviews of prospectuses on a confidential pre-file basis (the “pre-file process”) was put in place in March 2020, as part of the Canadian Securities Administrators’ (“CSA”) burden reduction initiatives This link will open in a new window. Since then, 16 issuers have received AMF staff input in a pre-file process, providing issuers with greater flexibility and more certainty in planning their prospectus offerings.

The AMF reminds issuers of the following best practices when filing a confidential prospectus as part of a pre-file process to streamline the review process:

• Pre-filed prospectuses should contain all financial and non-financial disclosure that would be included in the actual prospectus filing; missing disclosure can result in review timelines being extended.
• A deal timeline should be included in the filed cover letter to assist staff in understanding when the review should ideally be completed. The AMF expects that the issuer will file a preliminary prospectus shortly after the completion of the review of the prospectus filed as part of the pre-file process.
• Any legal or accounting questions where AMF staff input is required should be highlighted.

The AMF will not review non-offering prospectuses filed as part of the pre-file process, other than non-offering prospectuses in connection with cross-border financings or where there is a specific legal or accounting matter requiring staff input. Prospectuses filed as part of the pre-file process that solely qualify the issuance of securities on conversion of convertible securities, such as special warrants, will also not be reviewed.

Capital raising in Québec continues to grow at a rapid pace. The number of prospectuses for which the AMF was principal regulator were up 42% for the year 2020 compared to 2019 and 57% for the period between January and March 2021 compared to the same period in 2020. To continue to support capital raising and efficiently manage these large increases in prospectus volumes, AMF staff will be triaging all filings and prioritizing the most urgent and time-sensitive prospectus filings, such as bought deals and overnight marketed offerings. Generally, a base shelf prospectus filing with no imminent drawdown would not be considered urgent and time sensitive.

AMF staff continue to make every effort to meet usual standards and delays for all filings. AMF staff will also triage and prioritize all other types of files, such as exemptive relief applications, and deal with the most urgent and time sensitive files, which could cause additional review delays for the less urgent and time sensitive files. AMF staff will promptly notify the filer and their counsel where this is the case.

For questions about any information contained above, please contact Patrick Théorêt, Manager, Corporate Finance at [email protected].

The Autorité des marchés financiers is the regulatory and oversight body for Québec's financial sector.

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