OSC clarifies that notice-and-access is available for OBCA issuers

Ramandeep Grewal and Jonathan Moncrieff -

In a recent post, we discussed a number of matters to consider before implementing notice-and-access for posting proxy-related materials on a website instead of mailing materials to shareholders.

Staff of the Ontario Securities Commission yesterday issued guidance that clarifies some of the matters discussed in our earlier post. Specifically, the guidance sets out OSC staff's interpretation of the interaction of notice-and-access with NP 11-201 Electronic Delivery of Documents as well as the availability of notice-and-access to reporting issuers incorporated under the Business Corporations Act (Ontario).

Specifically, OSC Staff state that, in their view, the definition of the term "send" in the OBCA is inclusive and does not prohibit the use of electronic delivery or electronic documents, including the procedures contemplated by notice-and-access, and that the OBCA does not impose an obligation that a reporting issuer obtain consent to use electronic delivery to send proxy-related materials. Accordingly, Staff conclude that the OBCA does not prevent a reporting issuer from sending proxy-related materials using notice-and-access and they do not think it is necessary for OBCA issuers to obtain exemptive relief in order to use it.

They also provide their views regarding compatibility with the Electronic Commerce Act (Ontario). Specifically, Staff state that notice-and-access is not incompatible with the restriction in the ECA against requiring a recipient to use or accept a document in electronic form without his or her consent since, under notice-and-access, shareholders have the option of requesting a paper copy at no charge. Staff also clarify that notice-and-access is more than “merely posting on a website” (which the ECA states does not constitute provision of a document or information), since issuers must do more than merely post their proxy-related materials, and must mail package to shareholders in advance of a meeting which informs them of, among other things, the website posting of the proxy-related materials.

While this notice may help to clarify issues for OBCA issuers, the situation for CBCA issuers is still unclear, as discussed in our post from earlier this week. For more information, see OSC Staff Notice 54-702.

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