Canadian securities regulators issue guidance on virtual or hybrid AGMs

On March 20, the CSA issued guidance on holding virtual or hybrid AGMs in light of increasing COVID-19 concerns (the Guidance).  

Many companies are considering holding virtual or hybrid meetings in light of current social distancing measures. For a more detailed discussion regarding virtual meetings, see our earlier legal update.

The Guidance provides the following: 

If a meeting has already been called and materials sent / posted on SEDAR: 

• If a company is changing the date, time or location / format of an in-person AGM, no additional proxy materials are required to be sent to shareholders provided the company promptly: (a) issues a press release announcing the new details;  (b) files it on SEDAR; and (c) ensures that reasonable notice of the change is given to market participants, including the company’s transfer agent, intermediaries and proxy service providers.
• If the company plans to conduct a virtual AGM (i.e., an AGM conducted through the internet or other electronic means in lieu of an in-person AGM) or hybrid AGM (i.e., an in-person AGM that also permits shareholder participation through electronic means) the company does not need to send additional soliciting materials or update its proxy-related materials solely for the purpose of switching to a virtual or hybrid AGM, if the company follows the steps described above for announcing a change in the AGM date, time or location / format of the meeting.

If a company has not yet sent its AGM materials: 

The company should consider including disclosure in its proxy-related materials regarding the possibility of changes to the date, time or location / format of the meeting due to COVID-19. 

In all cases, a company planning to conduct a virtual or hybrid AGM, must notify its shareholders and other market participants in a timely manner with clear directions on the logistical details of the virtual or hybrid AGM, including how shareholders can remotely access, participate in, and vote at such AGM. 

The Guidance applies to all business transacted at AGMs (including the election of directors and approval or amendments to equity incentive plans). If a company is involved in a proxy contest, holding a special meeting to approve an M&A transaction or seeking approval under Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions, it should contact its principal regulator to discuss any additional implications on such meetings.

The Guidance does not address provisions under applicable corporate law or the company’s constating documents related to holding virtual AGMs – companies should consult their legal counsel to discuss the implications of same.