LIFE Update: CSA Proposes To Make Expansion Of Listed Issuer Financing Exemption Permanent

On July 23, 2026, the Canadian Securities Administrators (CSA) published for comment proposed amendments to National Instrument 45-106 – Prospectus Exemptions (NI 45-106) and certain other forms and policies (collectively, Proposed Amendments), to codify the enhanced capital-raising flexibility under the listed issuer financing exemption (Exemption) and to streamline certain other conditions of the Exemption.

Background

In May 2025, the CSA issued Coordinated Blanket Order 45-935 – Exemption from Certain Conditions of the Listed Issuer Financing Exemption (Blanket Order), which enhanced the capital-raising flexibility available under the Exemption. The Blanket Order expanded the ability for issuers that meet certain conditions to raise capital without a prospectus. Key conditions of the Blanket Order were discussed in our previous bulletin, A New Lease on LIFE: CSA Expands Listed Issuer Financing Exemption. The CSA notes that since the adoption of the Blanket Order, use of the Exemption has materially increased, with the Exemption being used by more than 300 issuers, collectively raising C$3.7-billion.

The Proposed Amendments

Under the Proposed Amendments, the CSA will codify the following key conditions issuers must satisfy consistent with the Blanket Order:

• Offering Limit: Issuers can raise a greater of C$25-million or 20% of the aggregate market value of their listed equity securities, subject to a maximum of C$50-million in a 12-month period.
• Dilution Limit Calculation:The 50% dilution limit is calculated based on the number of outstanding listed equity securities as of:
  • The date of the news release announcing the offering if the issuer has not relied on the Exemption in the past 12 months, or
  • The date of the news release for the first offering completed under the Exemption within the past 12 months

Issuers may exclude securities issuable on exercise of warrants from the calculation that are not convertible within 60 days of the offering’s closing.

The Proposed Amendments also codify certain conditions that must be satisfied for an issuer to avail itself of these limits, including that the Exemption cannot be used if the distribution results in the creation of a new control person or allows any person or company to acquire securities giving them the right to elect a majority of the board of directors.

Key Differences Between the Blanket Order and the Amendments

While the Proposed Amendments are generally consistent with the Blanket Order, the CSA has proposed certain important additional changes. The following are the key differences:

• Successor issuers: The Proposed Amendments extend the Exemption to “successor issuers” that acquired substantially all of their business from a reporting issuer in at least one Canadian jurisdiction for the 12 months preceding the offering.
• Sufficiency of funds: The Proposed Amendments replace the requirement that an issuer reasonably expect to have available funds to meet its business objectives and liquidity requirements for 12 months following the distribution with a requirement that an issuer must only reasonably expect to have available funds to meet its short-term liquidity requirements. Accompanying this revision is an enhanced disclosure requirement requiring disclosure in the offering document regarding an issuer’s financial condition if its most recently filed financial statements include, or its next financial statements could include, disclosure of material uncertainties about going concern.
• Certificate: The Proposed Amendments simplify the certificate requirement by removing the option to insert a specific date and increasing the lookback period from 12 months to 18 months.
• Bulleted offering price: The Proposed Amendments explicitly permit issuers in certain circumstances and subject to certain conditions to omit the offering price from the offering document.
• Lengthened closing period: The Proposed Amendments extend the time to close an offering under the Exemption from 45 days to 60 days.

Next Steps

The 90-day comment period for the Proposed Amendments closes on October 21, 2026. The Blanket Order is set to expire on November 15, 2026.