Material Change
Practical Law Canada Glossary 8-574-9428 (Approx. 3 pages)
Glossary
Material Change
When used in relation to an issuer other than an investment fund, defined in section 1.1(1) of National Instrument 51-102 - Continuous Disclosure Obligations (NI 51-102) as one of:
- A change in the business, operations or capital of the issuer that would reasonably be expected to have a significant effect on the market price or value of any of the securities of the issuer.
- A decision to implement a change referred to in the first bullet made by the board of directors or other persons acting in a similar capacity or by senior management of the issuer who believe that confirmation of the decision by the board of directors or such other persons acting in a similar capacity is probable.
When used in relation to an issuer that is an investment fund, defined in section 1.1 of National Instrument 81-106 - Investment Fund Continuous Disclosure (NI 81-106) as one of:
- A change in the business, operations or affairs of the issuer that would be considered important by a reasonable investor in determining whether to purchase or continue to hold securities of the issuer.
- A decision to implement a change referred to in the first bullet made:
- by the board of directors of the issuer or the board of directors of the investment fund manager of the issuer or other persons acting in a similar capacity;
- by senior management of the issuer who believe that confirmation of the decision by the board of directors or such other persons acting in a similar capacity is probable; or
- by senior management of the investment fund manager of the issuer who believe that confirmation of the decision by the board of directors of the investment fund manager of the issuer or such other persons acting in a similar capacity is probable.
Under section 7.1 of NI 51-102, reporting issuers must issue and file on SEDAR+ a press release and a material change report must be filed on SEDAR+. For more information on material change reports, including filing deadlines and requirements, see Practice Note, Material Change Reports. There are corresponding but different provisions applicable to investment funds in section 11.2 of NI 81-106.
If, after a receipt for a final prospectus is issued but before completion of the distribution under the final prospectus, a material change occurs, Ontario Securities Act, R.S.O. 1990, c. S.5, section 57(1), and section 6.6 of National Instrument 41-101 General Prospectus Requirements require an amendment to a final prospectus to be prepared and filed on SEDAR+ as soon as practicable, but in any event within ten days after the day the change occurs.
For more information, see Practice Note, Prospectus Offerings in Canada: Overview.
For more information on materiality and the disclosure of material changes and other material information, see:
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