Danier Leather - The Supreme Court of Canada Weighs In
Securities and Mergers & Acquisitions Bulletin
November 2007
With important ramifications for investors, public issuers and their management, the Supreme Court of Canada recently confirmed an earlier Ontario Court of Appeal decision that corporations or other entities issuing shares or other securities to the public pursuant to a prospectus are not obliged under the disclosure requirements found in Ontario's Securities Act to update the prospectus to reflect changes to material facts that occur after the final prospectus is filed but before the offering has closed. This confirms at the highest level that under the Securities Act a final prospectus is required to contain full, true and plain disclosure of all material facts as of the date of the final prospectus, but not afterwards (including the date of the closing of the offering). Once a final prospectus is filed and a receipt is obtained, only a "material change" in the business, operations or capital of the issuer during the period of distribution will require the issuer to prepare and file an amendment to the prospectus.
|