Companies


Rights Offerings


A rights offering is the distribution of rights to purchase securities of a company made to that company’s existing security holders. A company that wants to grant existing security holders the right to purchase additional amounts of the security can do so through a prospectus or a prospectus exemption for rights offerings outlined in National Instrument 45-106 Prospectus and Registration Exemptions.

To rely on the rights offering exemption, the company must comply with National Instrument 45-101 Rights Offerings (NI 45-101).

The rights offering exemption is not available for offerings that would result in an increase of more than 25% in the number of the company’s outstanding securities, including amounts raised in other rights offerings completed within the previous 12 months.

A company must give prior written notice to the appropriate securities regulator that it is relying on the rights offering exemption.

NI 45-101 requires that a company send to security holders a rights offering circular containing the information in Form 45-101F1. The circular must be filed in draft and final form with the OSC.

The Director will inform the company in writing within 10 days of the written notice whether it objects to the offering or accepts it. The company must satisfactorily address any objections raised before the Director will issue an acceptance letter.

If the OSC issues an acceptance letter, the company must send the rights offering circular to every security holder who will receive rights under the offering.

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