Review process for substantive changes made subsequent to filing or “clear for final” of preliminary or pro forma prospectuses
Staff remind investment fund managers that substantive changes to prospectus disclosure made after a preliminary or pro forma prospectus has been filed or cleared for final may cause delays in receiving a receipt for the final prospectus. Delays may occur as staff need to conduct a new review of those changes, and depending on the outcome of that review, may need to reverse the “clear for final” status and issue additional comments. Situations like this may potentially cause lapse date-related issues.
For preliminary prospectuses, consideration will also be given to whether an amended and restated preliminary prospectus will need to be filed. Staff note that such substantive changes to prospectus disclosure will be subject to the same level of review as the disclosure included in the filed preliminary or pro forma prospectus.
For example, staff have recently observed a number of prospectuses in which environmental, social and governance (ESG) related disclosure was added after a preliminary or pro forma prospectus was filed or cleared for final. In each case, the additional disclosure was not prompted by comments raised by staff. In staff’s view, the addition of, or revisions to, ESG-related disclosure are substantive changes.
Staff encourage investment fund managers to file their prospectus amendments and preliminary and pro forma prospectuses as early as possible and, if applicable, in advance of their filing deadlines, in order to avoid delays in the prospectus review process.
Further to the IFSP eNews article that was published on January 26, 2022, we remind investment fund managers that, during the prospectus review process, staff are reviewing the regulatory documents of funds whose investment objectives reference ESG factors and other funds that use ESG strategies in accordance with the guidance provided in CSA Staff Notice 81-334 ESG-Related Investment Fund Disclosure. This review is intended to assist investment fund managers in improving the disclosure of such funds.
If there are any questions about this process, please contact any of the following staff of the Investment Funds and Structured Products Branch:
- Ritu Kalra, Senior Accountant at [email protected]
- Bryana Lee, Senior Legal Counsel at [email protected]
- Sovener Yu, Senior Accountant at [email protected]
- Sean Costen, Legal Counsel at [email protected]