A New Lease on LIFE: CSA Expands Listed Issuer Financing Exemption

On May 14, 2025, the Canadian Securities Administrators (CSA) announced Coordinated Blanket Order 45-935 – Exemption from Certain Conditions of the Listed Issuer Financing Exemption (Blanket Order) aimed at enhancing capital-raising flexibility for Canadian public companies by, among other things, increasing the limit on capital-raising under the existing Listed Issuer Financing Exemption (the Exemption).

This development builds on the CSA’s broader efforts to improve market accessibility and foster a more competitive capital-raising environment in Canada. As discussed in our April 2025 bulletin, CSA Blanket Orders Aim to Warm Up Canadian Capital Markets, these initiatives reflect the CSA’s continued efforts toward streamlining disclosure requirements and facilitating efficient capital formation for listed issuers.

Background

Introduced in November 2022, the Exemption allows eligible issuers to raise capital without a prospectus, subject to satisfying certain conditions. The CSA notes that since its adoption, the Exemption has been used by more than 270 issuers, collectively raising over C$1-billion.

Key Conditions of the Existing Exemption (November 2022) 

To avail themselves of the existing Exemption, adopted in November 2022, issuers have to satisfy several conditions, including the following:

• Eligibility: The issuer must be a reporting issuer for at least 12 months, listed on a Canadian exchange and current with all periodic filings. Investment funds and issuers with no active business (or whose primary asset is cash or exchange listing) are excluded.
• Offering Limits: The issuer can raise a greater of C$5-million or 10% of the issuer’s market capitalization, up to a maximum of C$10-million in a 12-month period.
• Disclosure Requirements: Instead of a prospectus, the issuer must file and deliver a short-form disclosure document (Form 45-106F19) and issue a news release.
• Dilution Limit: The offering must not result in the issuance of more than 50% of the issuer’s outstanding listed equity securities during the 12 months immediately before the offering was announced.
• Use of Proceeds: Proceeds may not be used for significant acquisitions, restructurings or any transaction requiring securityholder approval.
• Securities: Only listed equity securities (or units, including warrants) can be issued and must be freely tradable upon issuance.

What’s New in the Blanket Order?

While market participants have responded positively to the adoption of the Exemption in November 2022, the CSA noted that the capital-raising limits under the existing Exemption have restricted its use and, accordingly, the Blanket Order, effective May 15, 2025, increases such limits, subject to the satisfaction of certain conditions:

• Increased Offering Limit: Issuers can now 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.
• Revised Dilution Limit Calculation: The 50% dilution limit is now 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 or Blanket Order in the past 12 months; or
  • The date of the news release for the first offering completed under the Exemption or Blanket Order 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 Blanket Order contains certain conditions that must be satisfied for an issuer to avail itself of these enhanced limits, including that the Blanket Order 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.

Conclusion 

The expanded Exemption under the Blanket Order represents a further step in the CSA’s ongoing efforts to enhance the efficiency and cost-effectiveness of capital raising in Canada. By increasing the capital raising limits under the Exemption, the CSA is providing issuers with greater flexibility to secure funding, particularly in sectors where timely access to capital is essential.

If you have any questions about how these changes may impact your capital-raising strategies, please contact the authors or any other member of our Capital Markets group.