Reporting issuer

The term matters when a company raises money from investors, or when someone who received shares in a private deal wants to resell them. Whether the issuer is a reporting issuer, and for how long, is one of the resale conditions in National Instrument 45-102, so it can matter in a deal paid partly in shares.

How Ontario defines it

Ontario’s Securities Act lists several routes in its definition in section 1(1). Among them: the issuer has filed a prospectus and the Director has issued a receipt, the issuer is designated as one in an order, or it is a company continuing after an amalgamation or similar exchange in which one of the amalgamating or merged companies, or the continuing company, had been a reporting issuer for the period the Act names. Read the full definition for the other routes.

What to check or ask

• Ask whether the issuer is a reporting issuer in any jurisdiction of Canada, and since when.
• Check how National Instrument 45-102 ties resale conditions to that status, including whether the issuer was one on the distribution date.
• Confirm the answer with the securities commission where the issuer or the holders are located.

This entry covers the Ontario definition only. Check the securities law of the province where you are. See should I accept shares instead of cash and the hold period.