Canadian Securities Administrators issues updated guidance on virtual shareholder meetings

The Canadian Securities Administrators has provided reporting issuers with updated guidance concerning virtual shareholder meetings conducted during COVID-19.

According to the CSA, many reporting issuers have adopted virtual shareholder meetings since the outset of the pandemic. It, therefore, consulted with market participants and stakeholders to better understand their experience with virtual shareholder meetings.

On Feb. 25, the CSA issued the updated guidance to assist reporting issuers in fulfilling their disclosure obligations under securities legislation and encourage procedures facilitating shareholder participation.

In particular, the CSA encouraged reporting issuers to provide clear and comprehensive disclosure in meeting circulars and materials regarding logistical matters, such as how to access, participate in and vote at a virtual shareholder meeting.

“Reporting issuers can do this by providing full explanations of the registration, authentication and voting process for both registered and beneficial shareholders,” the CSA said.

The CSA also encouraged reporting issuers to disclose their procedures for receiving and addressing shareholder questions and accommodating and managing shareholder participation at a virtual meeting.

The CSA urged reporting issuers to afford shareholders a level of shareholder participation comparable to what they could reasonably expect at an in-person meeting. This level means that they should be able to make motions, raise questions and submit feedback during question-and-answer periods.

“We recognize that, like in-person meetings, reporting issuers and meeting chairs will necessarily have to apply some level of discretion in fielding questions and managing the meeting,” the CSA said.

In the case of a contested virtual shareholder meeting, the CSA advised reporting issuers to seek assistance from their legal advisors and consider creating protocol agreement with the dissident before the meeting.