Amendments to the Canada Business Corporations Act (CBCA) have been made to facilitate the use of notice-and-access by CBCA distributing corporations.
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. Essentially, it provides shareholders with an alternative manner to access the proxy-related materials.
The amendments to sections 150, 153 and 159 of the CBCA to fully allow distributing corporations to use notice-and-access require regulations. The development of the required regulations is expected to take approximately 18-24 months.
Until the required regulations are developed, Corporations Canada is of the view that the notice-and-access regime provides shareholders with sufficient disclosure to support applications for exemptions under both subsection 151(1) and section 156 of the CBCA. Amendments to these two sections need no regulations and are in effect now. These amendments give the Director, on any terms that the Directors thinks fit, the authority to:
- under subsection 151(1): exempt a person from the requirements of subsection 150(1) to send the proxy circular to shareholders and exempt a person from the requirements of subsection 153(1) related to the duties of intermediaries;
- under section 156: exempt a corporation from the requirements of section 159 to send the annual financial statements to shareholders.
To be considered for these exemptions, a corporation must be a distributing corporation as defined under the CBCA. Applications will be considered on a case-by-case basis.
If you would like more information about applying for these exemptions, consult the following:
- Policy on exempting a corporation from a financial disclosure requirement –Canada Business Corporations Act, section 156.
- Policy on exempting interested persons from the management proxy solicitation requirements – Canada Business Corporations Act, subsection 151(1).
- Policy on exempting interested persons from the dissident proxy solicitation requirements – Canada Business Corporations Act, subsection 151(1).
If you have any questions, contact us.