Disclosure changes would put all issuers on equal level

Canada's provincial securities regulators, assailed over fragmented rules that complicate the process of raising capital, are moving to lighten the prospectus burden on small companies.

The Canadian Securities Administrators (CSA), representing the 13 provincial and territorial securities commissions, said the regulators will "more fully integrate the disclosure systems" and update rules on short-form prospectuses.

The proposed changes, replacing policies last updated in 2000, are open for comment until April 8, and the commissions plan to implement them in July.

Short-form prospectuses, which in fact run to dozens of pages, provide details about shares and other securities to be issued by companies that have an established presence on the Canadian stock market. The key proposed change announced would open the short-form system to smaller companies.

Currently, corporations with stock-market values of under $75 million must file long-form prospectuses, which include masses of information that is publicly available elsewhere, and which issuers say overwhelm investors with detail.

The changes would let all listed issuers use short-form prospectuses, which refer to a company's required continuous disclosure and typically can get securities commission approval in a week. This compares with the two or three weeks a long-form prospectus takes to wend its way through the regulatory system.

The planned amendments to National Instrument 44-101 "are designed to allow issuers to efficiently access the capital markets by depending increasingly on their existing continuous disclosure record," the securities administrators said.

"By harmonizing and integrating the short-form prospectus regime with the new continuous disclosure regime, we are creating a seamless, integrated and expedited offering system," said Stephen Sibold, chairman of the Alberta Securities Commission and of the CSA.

"The new system can allow issuers to respond more quickly and efficiently to market opportunities without diminishing the information and protection available to investors."