Further to the measures detailed in our Client Alert published earlier this week (available here), the Canadian Securities Administrators (CSA) announced on March 20, 2020 that they are providing reporting issuers additional flexibility to change the date, time or location of an in-person annual general meeting (AGM), or to hold virtual or hybrid AGMs. These measures come as the CSA, the TSX and certain provincial securities regulators have already announced emergency measures in response to the COVID-19 pandemic, including the CSA’s March 18, 2020 announcement that it will provide temporary relief from some regulatory filings required to be made on or before June 1, 2020.
Please note that the CSA’s guidance is still subject to applicable corporate law and the reporting issuer’s constating documents (e.g., articles and by-laws), as securities regulators cannot override these laws and documents.
A reporting issuer that has decided to change the date, time or location of its in-person AGM due to difficulties arising from COVID-19 and that has already sent and filed its proxy-related materials, can notify securityholders of the change without sending additional soliciting materials or updating its proxy-related materials if the reporting issuer:
- issues a news release announcing the change in the date, time or location;
- files the news release on SEDAR; and
- takes all reasonable steps necessary to inform all the parties involved in the proxy voting infrastructure (such as intermediaries, transfer agents, and proxy service providers) of the change.
If a reporting issuer has not yet sent and filed its proxy-related materials, the reporting issuer should consider including disclosures in its proxy-related materials regarding the possibility of such changes due to COVID-19.
The CSA has indicated that a reporting issuer holding a virtual AGM (i.e., an AGM through the internet or other electronic means in lieu of an in-person AGM) or a hybrid AGM (i.e., an in-person AGM that also permits securityholder participation through electronic means) should notify its securityholders, the parties involved in the proxy voting infrastructure, and other market participants of such plans in a timely manner and to disclose clear directions on the logistical details of the virtual or hybrid AGM, including how securityholders can remotely access, participate in, and vote at such AGM. If the reporting issuer has already sent and filed its proxy-related materials, the reporting issuer does not need to send additional soliciting materials or to update its proxy-related materials solely for the purpose of switching to a virtual or hybrid AGM, if the reporting issuer follows the steps described above for announcing a change in the AGM date, time or location.
Reporting issuers involved in proxy contests, holding special meetings for merger and acquisition transactions, or obtaining securityholder approval for transactions under Multilateral Instrument 61-101 Protection of Minority Securityholders in Special Transactions should contact their principal regulator to discuss what steps would be appropriate in those circumstances.
The CSA continues to monitor the impact of COVID-19 on Canadian capital markets and may issue further guidance and updates as required.