Dec 7, 2021
Companies are raising so much money that OSC can't keep up
Ontario AG says OSC's reviews of SPACs, reverse takeovers fall short
Companies are raising so much capital that Canada’s top securities regulator can’t handle all the paperwork, slowing the review of applications for everything from stock sales to takeover bids.
The Ontario Securities Commission is extending the timelines for reviews of some offering documents, compliance reviews and applications by days or even weeks, the regulator said in a statement Tuesday.
The move comes as capital-raising “continues to grow at an extraordinary rate,” with prospectus volumes increasing 30 per cent year-over-year, the commission said. The OSC expects to handle more than 800 prospectuses next year, more than double the number it received in 2019.
Canadian companies and fund managers have been raising cash amid low interest rates and high stock valuations. Canadian-dollar corporate bond sales smashed the previous annual record of $109 billion (US$86.1 billion) by early November as firms sought to get money before borrowing costs rise.
“Additionally, the OSC is seeing a large volume of applications and filings from firms with complex or novel business models,” the regulator said.
“These applications and filings raise new policy issues that must be carefully considered and communicated, in consultation with other regulators, for the benefit of all market participants.”
Timeline changes include:
- Long-form or simplified prospectus filings will now take as long as 15 working days compared with 10
- The commission expects to review 80 per cent of takeover bid circulars within seven working days; the previous standard was to review 90 per cent in that time
- When a firm registers as a new business with the OSC, the commission will provide its initial comments on the application within 45 days, versus 30 days previously