The Canadian Securities Administrators (CSA) has increased the limit on capital-raising under the listed issuer financing exemption (LIFE) via a new blanker order (the LIFE Order).[1]
Effective May 15, 2025, eligible issuers can now raise the greater of $25 million and 20% of the aggregate market value of their listed securities up to a maximum of $50 million in a twelve-month period, subject to a 50% dilution restriction. This is a significant increase from the previous LIFE limits of the greater of $5 million and 10% of market value up to $10 million in a twelve-month period, subject to the 50% dilution restriction.
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Aim and Implementation
The CSA issued the LIFE Order for the express purpose of supporting the competitiveness of Canada’s capital markets amidst unusual global economic uncertainty, and this is only the latest measure taken by the CSA towards this end in recent weeks.[2]
Every member of the CSA has implemented the LIFE Order through substantially similar local blanket orders which were entered into effect on May 15, 2025. In certain jurisdictions the applicable blanket order includes an expiry date based on term limits for blanket orders in the jurisdiction.[3]
LIFE in Brief
LIFE entered effect in November 2022.[4] As its name suggests, LIFE is a prospectus exemption for distributions of securities listed for trading on a recognized Canadian stock exchange. The issuer must have filed all timely and periodic disclosure documents required under Canadian securities law to be eligible under the LIFE regime.
LIFE’s goal is to facilitate issuers raising freely tradable capital in a timely and cost-efficient manner. Among LIFE’s novel features is that securities issued in LIFE offerings are available to all investors and are generally freely tradeable; i.e., the typical four-month “hold period” under NI 45-102,[5] which applies to private placements such as those to “accredited investors” or with a minimum subscription amount of $150,000, does not apply to a LIFE financing.
According to the CSA, LIFE has been used by more than 270 issuers since its adoption, collectively raising over $1 billion. However, market participants noted that LIFE’s capital-raising limits restricted use of the exemption.
The Expansion of LIFE under the LIFE Order
- the timing for calculating the outstanding securities is:
- the date of the news release announcing the offering if the issuer has not relied on the exemption or the LIFE Order in the last 12 months; or
- the date of the news release announcing the first offering completed in reliance on the exemption or the LIFE Order in the last 12 months; and
- issuers can exclude securities issuable on exercise of warrants from the calculation if they are not convertible within 60 days of closing of the offering.
Other LIFE distribution restrictions include that the offering cannot:
- result in a new control person; or
- result in a person or company acquiring ownership of, or exercising control or direction over, securities that would result in the person or company being entitled to elect a majority of directors.
Going Forward
The LIFE Order demonstrates that the CSA is keen to help Canadian issuers raise capital. However, maintaining the 50% dilution limit may have the effect of making the new maximums under the LIFE Order illusory for issuers trading at low prices by limiting the number of shares that can be issued.
Fasken’s team of capital markets partners are available to assist with all aspects of capital raising under LIFE, including determining eligibility and offering execution.
[1] See CSA expands capital-raising options for listed issuers (May 14, 2025) and Coordinated Blanket Order 45-935 Exemptions from Certain Conditions of the Listed Issuer Financing Exemption.
[2] See Fasken, Global Market Uncertainty Prompts Securities Regulators to Act to Encourage IPOs and Increase the Competitiveness of Canada’s Capital Markets(April 22, 2025) and Fasken, CSA Pauses New Climate and DEI Disclosure Rules to Focus on the Competitiveness of Canada’s Capital Markets(April 23, 2025).
[3] For example, in Ontario, the term of the blanket order is 18 months and will expire on November 15, 2026.
[4] See Fasken, Canadian Securities Administrators Create an Exemption to Allow Listed Companies to Issue Freely Tradable Securities Without a Prospectus(September 19, 2022) and Fasken, LIFE Revisited(October 20, 2022).
[5] See National Instrument 45-106 - Prospectus Exemptions.
