Listed issuer financing exemption: NI 45-106 Part 5A

By Issuer Financing Published 10 September 2026 Last reviewed 10 September 2026

The listed issuer financing exemption, in Part 5A of National Instrument 45-106, lets a Canadian reporting issuer of 12 months' standing sell listed equity securities without a prospectus, off its continuous disclosure record and a short offering document on Form 45-106F19. The securities it issues are freely tradeable, which is what separates it from a private placement.

Key takeaways

Twelve months of reporting history, not a prospectus. Paragraph 5A.2(a) requires the issuer to have been a reporting issuer in at least one jurisdiction of Canada for the 12 months before it files the news release.
Listed equity only. Paragraph 5A.2(j) permits a listed equity security, or a unit of a listed equity security and a warrant convertible into one. A convertible debenture is outside it.
Appendix E, not Appendix D. National Instrument 45-102 lists section 5A.2 in Appendix E, so the first trade attracts the seasoning period in section 2.6 rather than the four-month restricted period and legend in section 2.5.
Higher limits by order, not by amendment. Paragraph 5A.2(g) still reads the greater of $5,000,000 and 10% of market value to a maximum of $10,000,000. Coordinated Blanket Order 45-935 varies it for issuers that opt in.
A bought deal is the opposite structure. It is a short form prospectus distribution bought outright by underwriters, and its point is the pre-marketing window Part 7 of National Instrument 44-101 opens before the preliminary prospectus is filed.
Statutory liability attaches to the offering document. Section 5A.6 makes a completed Form 45-106F19 a core document for the secondary market liability provisions.

What Part 5A permits

Section 5A.2 disapplies the prospectus requirement for a distribution by an issuer of a security of its own issue, provided every condition in the section is met. The gate conditions describe the issuer, not the deal. It must be a reporting issuer in at least one jurisdiction of Canada and must have been one for the 12 months immediately before the news release; it must have a class of equity securities listed on an exchange recognised by a securities regulatory authority in Canada; it must not be an investment fund; and it must be current in every periodic and timely disclosure document required of it.

Paragraph 5A.2(c) closes the obvious misuse. The exemption is shut to an issuer whose operations have ceased, or whose principal asset is cash, cash equivalents or its exchange listing — the instrument names capital pool companies, special purpose acquisition companies and growth acquisition corporations so the point cannot be argued. The test looks back 12 months and reaches any counterparty to a restructuring transaction, so a shell cannot be tidied up before the raise.

Two conditions govern the money. The issuer must reasonably expect available funds to meet its business objectives and liquidity requirements for the 12 months after the distribution. And the funds disclosed in the offering document may not be allocated to a significant acquisition under Part 8 of National Instrument 51-102, to a restructuring transaction, or to anything for which security holder approval is sought. Part 5A is working-capital and milestone money, not deal money.

The procedure is short. Before soliciting an offer to purchase, the issuer files a news release carrying the prescribed sentence pointing investors to the offering document on SEDAR+, and files a completed Form 45-106F19 no later than three business days after the date of the form. The distribution must close by the 45th day after that release, and a material change before completion stops it until an amendment and a further release are filed.

The size limit, and the 2025 blanket order

As drafted, paragraph 5A.2(g) caps the distribution, combined with every other LIFE distribution in the preceding 12 months, at the greater of $5,000,000 and 10% of the aggregate market value of the issuer's listed securities, to a maximum of $10,000,000. Aggregate market value is defined mechanically: listed equity securities outstanding multiplied by the market price. Paragraph 5A.2(h) adds a dilution cap of a 50% increase in the outstanding listed equity securities.

Those are still the figures in the instrument, and they are not the figures an issuer relying on the order works to. Coordinated Blanket Order 45-935, dated 14 May 2025 and effective the next day, varies paragraphs 5A.2(g) and (h) and the third bullet under section 3 of the form for an issuer that meets the order's conditions. The substituted ceiling is the greater of $25,000,000 and 20% of aggregate market value, to a maximum of $50,000,000.

The order is more careful than the headline. The 20% is fixed on the date of the release announcing the offering, or, where an earlier LIFE offering closed in the preceding 12 months, on the date of the first such release. The 50% test now counts shares issuable on warrants convertible within 60 days of closing. And two conditions have nothing to do with size: the distribution must not create a new control person, or put anyone in a position to elect a majority of the board.

Why the distinction matters when you size a raise

Relief by blanket order is not an amendment to the instrument. Each commission made its own order, and the term of such an order is a matter of local law. Read the order in force where the issuer reports before sizing a raise against the higher number.

The offering document: Form 45-106F19

The form is brief by prospectus standards and unforgiving in a different way. Its cover page must state in bold that no securities regulatory authority or regulator has assessed the merits of the securities or reviewed the document, and that the offering may not be suitable for the purchaser, who should only invest if willing to risk the loss of the entire investment. Beneath that sit the issuer's own representations about its operations, its filings and the offering limit.

The body is a use-of-proceeds document. Item 8 requires an available-funds table running from the amount raised through commissions, offering costs, working capital at the most recent month end and any other source of funding. Item 9 requires the intended use broken down in order of priority, with instructions that force disclosure where more than 10% repays debt, buys assets or funds research and development, or where any of it is paid to an insider. Item 10 asks how the last 12 months' money was actually spent against what was said at the time.

Then the liability apparatus. Paragraph 5A.2(m) requires the form, together with the issuer's filings over the preceding period, to disclose all material facts relating to the securities and to contain no misrepresentation; the item 15 certificate says exactly that, and item 16 requires it to be dated and signed by the chief executive officer and the chief financial officer. Item 13 tells purchasers that a misrepresentation gives them a right to rescind or to damages against the issuer, whether or not they relied on it. And section 5A.6 makes the filed form a core document for the secondary market liability provisions. A short document carries prospectus-grade exposure.

Why LIFE securities are freely tradeable

Resale in Canada turns on National Instrument 45-102, and on which appendix names the exemption used. Section 2.3 sends the first trade of a security distributed under a provision listed in Appendix D to section 2.5, the restricted period: four months must have elapsed from the distribution date, and the certificate or book-entry notice must carry the legend barring a trade before the date four months and a day after it. That is the hold every Canadian private placement by a public company lives with.

Section 5A.2 is not in Appendix D. It is in Appendix E, which section 2.4 sends to section 2.6, the seasoning period. Section 2.6 asks only that the issuer is and has been a reporting issuer in a jurisdiction of Canada for the four months immediately preceding the trade, that the trade is not a control distribution, that no unusual effort is made to prepare the market or create demand, that no extraordinary commission is paid, and that an insider or officer selling has no reasonable grounds to believe the issuer is in default.

That is the whole mechanism. Paragraph 5A.2(a) has already required 12 months of reporting history, so the only quantitative condition in section 2.6 is satisfied before the offering begins and the securities are saleable on closing. There is no elapsed-time condition on the security, and no legend. What survives are conduct conditions, and they bite: a control person selling into the market is still making a control distribution. The United States position is on free-trading shares, and satisfying one country's rule does nothing for the other's.

How a bought deal differs

A bought deal is not an exempt distribution at all. It is a prospectus offering, and the term describes who carries the risk. Section 7.1 of National Instrument 44-101 defines a bought deal agreement as a written agreement under which one or more underwriters has agreed to purchase all the securities to be offered under a short form prospectus on a firm commitment basis, with no market-out clause, no option to increase the size other than an over-allotment option, and no condition that other underwriters join beyond a confirmation clause.

What the definition buys is time. A solicitation made before a preliminary prospectus has been filed and receipted would otherwise run into the prospectus requirement. Section 7.2 disapplies it for a bought deal: interest may be solicited before the receipt, provided the agreement requires a preliminary short form prospectus to be filed not more than four business days after the agreement was entered into, the issuer files within that window, everyone solicited is either told that the preliminary prospectus is accessible on SEDAR+ or sent a copy once the receipt is issued, and no agreement of purchase and sale is entered into until the short form prospectus has been filed and receipted.

The consequences run both ways. A bought deal needs short form eligibility under Part 2 of NI 44-101 — current annual financial statements, a current annual information form, a listing on a short form eligible exchange — and an underwriter willing to take the book on its own balance sheet, which is paid for. In exchange the issuer gets certainty of proceeds on signing and a prospectus-qualified security. Part 5A gives neither, but needs no dealer and closes inside 45 days.

Four Canadian routes, side by side

Four ways a listed Canadian issuer sells newly issued equity
Feature	LIFE (Part 5A)	Private placement	Bought deal	At-the-market
Document the issuer files	News release, Form 45-106F19, report of exempt distribution	Subscription agreement; report of exempt distribution	Preliminary and final short form prospectus	Base shelf prospectus and a supplement
Reviewed or receipted by a regulator	No	No	Yes	Yes
Who may subscribe	Any purchaser, retail included	Only those within the exemption relied on	The public, through the syndicate	The market, through the dealer
Resale of the securities issued	Seasoning period, NI 45-102 s.2.6 (Appendix E)	Four-month restricted period and legend, s.2.5 (Appendix D)	Prospectus-qualified	Prospectus-qualified
Securities that may be used	Listed equity, or a unit with a warrant	Any security the exemption covers	Whatever the prospectus qualifies	Listed equity sold into the market
Ceiling set by securities law	Paragraph 5A.2(g), as varied by Order 45-935	None; exchange rules bind instead	The shelf or the prospectus	The shelf; see at-the-market offerings
Clock fixed by securities law	Close by the 45th day after the news release	No closing deadline; exchange price reservations bind instead	Preliminary prospectus within four business days	Drawn over the life of the shelf
Dealer's role	Optional; disclosed under item 11	Optional; agent or direct	Principal, on a firm commitment basis	Agent selling into the order book
General summary of NI 45-106 Part 5A, NI 45-102 and NI 44-101 Part 7. Exchange rules apply on top of all four routes. Not legal advice.

Where we sit in a Part 5A offering

We subscribe for newly issued securities with our own capital. In a LIFE offering that makes us one of the purchasers named in the subscription, reading the same Form 45-106F19 as everyone else and relying on the item 15 certificate. We are not the dealer, the finder or the underwriter, and nothing here is a view on whether Part 5A is the right route for any issuer or on the suitability of any security for any purchaser. Whether we subscribe at all turns on the issuer's float and traded volume rather than on the exemption it uses. The exchange-level constraints above all of it are on the Canada market page.

General information, not legal advice. This page summarises Part 5A of National Instrument 45-106, Form 45-106F19, National Instrument 45-102 and Part 7 of National Instrument 44-101 as published by the British Columbia Securities Commission and in the British Columbia consolidation, read on 10 September 2026. Blanket orders are local, and are varied and revoked; Part 5A itself is the subject of proposed amendments that the Canadian Securities Administrators published for comment on 23 July 2026. Whether an offering qualifies, what the current limit is in a given jurisdiction and what the offering document must say are questions for qualified Canadian securities counsel, who will want the filings rather than a summary.

Primary sources

The listed issuer financing exemption: frequently asked questions

What is the listed issuer financing exemption?

It is the prospectus exemption in Part 5A of National Instrument 45-106. A reporting issuer that has reported in at least one jurisdiction of Canada for 12 months, is current in its continuous disclosure and has listed equity securities may distribute listed equity securities, or units of shares and warrants, without a prospectus, on the basis of a news release and a completed Form 45-106F19.

How much can an issuer raise under the listed issuer financing exemption?

Paragraph 5A.2(g) of NI 45-106 sets the limit at the greater of $5,000,000 and 10% of the aggregate market value of the issuer's listed securities, to a maximum of $10,000,000, counting every LIFE distribution in the preceding 12 months. Coordinated Blanket Order 45-935, dated 14 May 2025, lifts that for an issuer relying on it to the greater of $25,000,000 and 20% of aggregate market value, to a maximum of $50,000,000.

Are securities issued under the listed issuer financing exemption free trading?

In substance, yes. National Instrument 45-102 lists section 5A.2 in Appendix E, so the first trade is subject to the seasoning period in section 2.6 rather than the four-month restricted period and legend in section 2.5. Because Part 5A already requires 12 months of reporting history, the seasoning condition is met by the time the distribution closes.

What is a bought deal?

A bought deal is a short form prospectus offering in which one or more underwriters agrees in writing to buy all of the securities on a firm commitment basis, with no market-out clause. Section 7.2 of National Instrument 44-101 then allows expressions of interest to be solicited before a preliminary short form prospectus is filed, provided the agreement requires that filing not more than four business days after it was entered into.

How is a bought deal different from a LIFE offering?

A bought deal is a prospectus distribution and a LIFE offering is not. In a bought deal an underwriter assumes the whole offering and is paid for doing so, a regulator issues a receipt for the prospectus, and the issuer must qualify for the short form system. Under Part 5A there is no receipted document, no underwriting commitment is required, and the issuer may sell to subscribers itself.

Does a LIFE offering need a dealer?

No. Part 5A does not require one. Item 11 of Form 45-106F19 asks for the name and compensation of any dealer or finder engaged in connection with the offering, and item 12 requires conflict disclosure under National Instrument 33-105 where a dealer is engaged, but the exemption works where an issuer deals with subscribers directly.

The listed issuer financing exemption: NI 45-106 Part 5A and the bought deal