On May 14, 2025, the Canadian Securities Administrators (“CSA”) announced increases to the limit on capital-raising under the “listed issuer financing exemption” (the “exemption”) found in Part 5A of National Instrument 45-106 – Prospectus Exemptions.

Background

Introduced in November 2022, the exemption allows eligible listed reporting issuers to raise capital without a prospectus, subject to satisfying certain conditions. To be eligible for the exemption, an issuer must:

• have been a reporting issuer in Canada for at least 12 months;
• have equity securities listed on a recognized stock exchange in Canada;
• during the preceding 12 months, have an active operating business whose principal asset is not cash;
• have filed all required periodic and timely disclosure documents; and
• reasonably expect that it will have available funds to meet its business objectives and liquidity requirements for a period of 12 months following the closing of the offering.

Since its introduction, the exemption has enabled over 270 issuers to raise over $1 billion.

What is Changing?

Previously under the exemption, issuers were limited to raising the greater of $5 million or 10% of the issuer’s aggregate market value, to a maximum of $10 million in any 12-month period, subject to certain conditions including a 50% dilution limit.

Effective May 15, 2025, listed reporting issuers can now raise the greater of $25 million or 20% of their aggregate market value, up to a maximum of $50 million within a 12-month period. This is a significant increase from the previous limits. The 50% dilution limit is also being adjusted, with specific changes to the calculation period and the inclusion of warrants in the dilution calculation.

Implementation

These changes are enacted through Coordinated Blanket Order 45-935 – Exemptions from Certain Conditions of the Listed Issuer Financing Exemption, issued by securities regulators across Canada. While the orders are largely harmonized, minor jurisdictional differences apply, including an expiry date based on the term limits for blanket orders in certain jurisdictions.

If you have questions about the increases to the limit on capital-raising under the “listed issuer financing exemption” or any other securities and capital structuring questions, please reach out to Keith Inman at [email protected] or Rebecca Dickson at [email protected], who would be more than happy to help answer them.