Canada’s Securities Regulators Increase Capital-Raising Limit for Listed Issuer Financing Exemption
In a move aimed at boosting the competitiveness of Canadian capital markets, the Canadian Securities Administrators (CSA) has significantly increased the capital-raising limits for the listed issuer financing exemption. Effective as of May 15, 2025, this change is part of the CSA’s broader efforts to modernize capital-raising rules and support the growth of Canadian businesses.
Under the revised rules, listed issuers can now raise the greater of $25 million or 20 percent of the aggregate market value of their listed securities, up to a maximum of $50 million within a 12-month period. This represents a fivefold increase from the previous limits, which capped fundraising at $10 million over the same period. The higher limits are designed to give companies greater flexibility in accessing capital while maintaining strong investor protections.
The expanded exemption comes with certain conditions to ensure investor interests remain safeguarded. For instance, the distribution of securities under this exemption cannot result in an increase of more than 50 percent of the issuer’s outstanding listed equity securities within the specified period. Additionally, the CSA has refined how shareholder dilution limits are calculated, further balancing the needs of issuers and investors.
This initiative is part of a series of recent CSA actions to streamline capital-raising processes in Canada. Stan Magidson, CSA Chair and CEO of the Alberta Securities Commission, highlighted the importance of creating a regulatory environment that adapts to the evolving needs of market participants. “This change reflects our ongoing commitment to supporting Canadian capital markets and making it more efficient for companies to raise capital and grow,” Magidson stated.
Since its introduction in November 2022, the listed issuer financing exemption has been used by approximately 270 issuers to raise over $1 billion in capital. However, the initial limits were often seen as restrictive, prompting calls for expansion. By increasing the fundraising capacity while introducing additional safeguards, the CSA aims to address these concerns without compromising investor protections.
This development follows other recent CSA initiatives to simplify capital-raising rules, including blanket orders issued in April 2025 that streamlined filing requirements and made it easier for companies to go public. Together, these changes underscore the regulator’s focus on fostering a more dynamic and efficient capital market in Canada.
New Capital-Raising Limits and Enhanced Regulatory Framework
The Canadian Securities Administrators (CSA) has introduced revised capital-raising limits under the listed issuer financing exemption, effective May 15, 2025. These changes are part of the CSA’s broader strategy to modernize capital-raising rules and support the growth of Canadian businesses.
Under the updated rules, listed issuers can now raise the greater of $25 million or 20 percent of the aggregate market value of their listed securities, up to a maximum of $50 million within a 12-month period. This represents a significant increase from the previous limits, which allowed companies to raise only $5 million or 10 percent of their market capitalization, with a maximum of $10 million over a 12-month period. The higher limits are designed to provide companies with greater flexibility in accessing capital while maintaining strong investor protections.
The expanded exemption includes specific conditions to safeguard investor interests. Notably, the distribution of securities under this exemption cannot result in an increase of more than 50 percent of the issuer’s outstanding listed equity securities during the specified period. Additionally, the CSA has revised how shareholder dilution limits are calculated under the exemption, further balancing the needs of issuers and investors.
This initiative is part of a series of recent CSA actions to streamline capital-raising processes in Canada. Stan Magidson, CSA Chair and CEO of the Alberta Securities Commission, emphasized the importance of creating a regulatory environment that adapts to the evolving needs of market participants. “This change reflects our ongoing work to support Canadian capital markets and make it more efficient for companies to raise capital and grow in Canada,” Magidson stated.
Since its introduction in November 2022, the listed issuer financing exemption has been used by approximately 270 issuers to raise over $1 billion in capital. However, the initial limits were often seen as restrictive, prompting calls for expansion. By increasing the fundraising capacity while introducing additional safeguards, the CSA aims to address these concerns without compromising investor protections.
This development follows other recent CSA initiatives to simplify capital-raising rules, including blanket orders issued in April 2025 that streamlined certain filing requirements and made it easier for companies to go public. Together, these changes underscore the regulator’s focus on fostering a more dynamic and efficient capital market in Canada.
Conclusion
The Canadian Securities Administrators’ (CSA) revision of the listed issuer financing exemption represents a significant step forward in modernizing capital-raising rules in Canada. By increasing the fundraising limits to the greater of $25 million or 20 percent of the issuer’s market value, up to a maximum of $50 million annually, the CSA has provided companies with greater flexibility to access capital while maintaining robust investor protections. These changes, effective May 15, 2025, reflect the regulator’s commitment to adapting to the evolving needs of market participants and fostering a more dynamic and efficient capital market. The updated rules strike a balance between supporting business growth and safeguarding investor interests, ensuring that Canada remains an attractive destination for capital formation.
Frequently Asked Questions (FAQ)
What is the listed issuer financing exemption?
The listed issuer financing exemption is a regulatory provision that allows listed companies to raise capital without undergoing the full prospectus process, subject to specific conditions and limits.
What are the new capital-raising limits under the updated exemption?
Under the revised rules, listed issuers can raise the greater of $25 million or 20 percent of their aggregate market value of listed securities, up to a maximum of $50 million within a 12-month period.
Why did the CSA increase the capital-raising limits?
The CSA increased the limits to provide companies with greater flexibility in accessing capital, support business growth, and modernize Canada’s capital-raising rules to align with the needs of market participants.
How does the CSA protect investor interests under the updated exemption?
The CSA has introduced safeguards, including a 50 percent limit on the increase of outstanding listed equity securities during the specified period and revised dilution limits, to balance issuer and investor interests.
How does this change fit into the CSA’s broader regulatory strategy?
This initiative is part of the CSA’s efforts to streamline capital-raising processes, simplify filing requirements, and create a more efficient and dynamic capital market in Canada.
