Autumn is the time of year when many issuers start actively planning for their upcoming shareholder meeting. For issuers incorporated under the Canada Business Corporations Act (CBCA), there are some new exemptions available allowing you to take full advantage of notice-and-access for your 2019 meeting and mailing.
What happened?
On May 1, 2018, Bill C-25, an Act to amend the Canada Business Corporations Act, the Canada Cooperatives Act, the Canada Not-for-profit Corporations Act and the Competition Act received Royal Assent. Further to our previously published updates on Bill C-25, various changes to the CBCA have been proposed. Although many of these changes will not come into effect until the relevant regulations have been adopted, one change that took place right away is the exemptions available for issuers who wish to implement notice-and-access.
Background information
“Notice-and-access allows greater use of the Internet for delivering proxy-related materials to shareholders of distributing corporations. It also significantly reduces the number of documents to be mailed to shareholders.”1 This satisfies proxy requirements while reducing the costs of printing and mailing these materials.
Since the Canadian introduction of notice-and-access in February of 2013, CBCA issuers have not been able to take full advantage of this streamlined material distribution process, as the requirements under the CBCA did not integrate well with the notice-and-access regulations. Although Corporations Canada did offer an exemption from the issuer's obligation to send the proxy circular to shareholders when soliciting a proxy, there was no exemption for other obligations, specifically the distribution of annual financial statements to shareholders, and the duties of the intermediary to forward the information circular to beneficial shareholders.
What has changed?
Due to Bill C-25, changes are now being made to the CBCA to allow distributing corporations to fully use notice-and-access; however, it will take another 18 to 24 months for the relevant regulations to be developed and implemented.
Until that occurs, Corporations Canada is able to provide exemptions to distributing corporations for the information circular requirements, both for issuers and intermediaries, and the annual financial statement requirements. Corporations Canada has indicated that staff will generally send a response within 15 working days of receiving an exemption request.
Next steps
If you are interested in using notice-and-access for your next meeting, please review the information that Corporations Canada has provided about “Using notice-and-access under the Canada Business Corporations Act” and consult with your counsel.
Computershare can support all of your notice-and-access requirements and help CBCA issuers take advantage of this change. Contact your Relationship Manager if you have any questions or want to discuss next steps.
1 Using notice-and-access under the Canada Business Corporations Act