Following the commencement at 12:01 a.m. on Friday, November 15, of a national strike by the Canadian Union of Postal Workers, shutting down Canada Post’s operations across the country, the Canadian Securities Administrators (CSA) have published guidance recommending that all stakeholders required to deliver documents to securityholders contact their local securities regulator or visit their local regulator’s website for guidance.
A postal strike could create disruption for issuers in a number of ways, including their ability to mail documents to securityholders as required under corporate and securities regulations. For example:
- AGMs: companies with September and October financial year ends may be impacted in their ability to send financial statements, MD&A and proxy materials to securityholders in advance of their annual general meetings;
- Special Meetings: companies in the midst of an M&A transaction may not be able to mail proxy materials to securityholders ahead of their special meeting called to consider and approve the transaction; and
- Bids: offerors may not be able to make a take-over bid and companies may not be able to make an issuer bid, both of which require sending a circular to securityholders.
CSA
The CSA has published guidance recommending that all stakeholders required to deliver materials to any CSA member, as well as deliver documents to securityholders, contact their local securities regulator or visit their local regulator’s website for guidance regarding prescribed delivery obligations.
Alberta and British Columbia
The Alberta Securities Commission and British Columbia Securities Commission have permanent blanket orders in place to provide relief regarding the delivery of financial statements and related disclosure to securityholders during a disruption in postal service (BC Instrument 51-514 and ASC Blanket Order 51-516).
Issuers can benefit from this relief if an issuer:
- complies with its filing requirements;
- issues a news release indicating the document is available on SEDAR+;
- provides copies of the annual or interim financial statements and MD&A to each securityholder who requests them; and
- delivers the documents once postal service resumes.
These blanket orders provide for limited relief and do not apply to proxy-related materials and bid circulars. Individual applications for exemptive relief will be considered case-by-case.
Ontario
The Ontario Securities Commission (OSC) has issued guidance stating that:
- it will not take action against issuers for failing to deliver financial reports to securityholders, provided they make reasonable efforts to provide the reports to securityholders upon request and mail the documents once normal mail service resumes;
- for offering documents, proxy solicitation materials, and bid circulars, issuers should consult with their service providers as to alternate delivery options and their legal advisers to determine how best to comply with their obligations; and
- in cases where relief is urgently needed, the OSC will attempt to deal with such applications as quickly as possible.
Quebec
The Autorité des Marchés Financiers (AMF) published a blanket decision (available in French only) to provide relief regarding the delivery of financial statements and related disclosure to securityholders during a disruption in postal service. However, this blanket order does not apply to proxy-related materials and bid circulars.
Issuers can benefit from this relief if an issuer:
- complies with its filing requirements;
- issues a news release indicating the document is available on SEDAR+;
- provides copies of the annual or interim financial statements and MD&A to each securityholder who requests them; and
- delivers the documents once postal service resumes
The AMF also published a notice indicating that:
- issuers should consult with their service providers on alternative delivery options and with their legal counsel on how to best fulfill their obligations relating to offering documents, take-over bids and proxy solicitations; and
- during the disruption of regular mail service, there may be a need to apply for exemptive relief from requirements to deliver documents to securityholders and other parties. Urgent applications will be processed promptly.
