SEC Form F-7

SEC Form F-7 is a filing with the Securities and Exchange Commission (SEC) that publicly-traded Canadian foreign private issuers are required to use for rights offerings to U.S. investors. The SEC requires that if an issuer is registered using SEC Form F-7, then the rights must be granted to U.S. shareholders on terms no less favorable than those extended to the foreign shareholders. This form is a wraparound form for the relevant Canadian offering documents required by securities regulation in Canada.

SEC Form F-7 is also known as the Registration Statement for Securities of Certain Canadian Issuers Offered for Cash upon the Exercise of Rights Granted to Existing Security Holders under the Securities Act of 1933. It is used if a Canadian entity is: 1) incorporated or organized under the laws of Canada or any Canadian province or territory; 2) is a foreign private issuer; and 3) has had a class of its securities listed on The Montreal Exchange, The Toronto Stock Exchange or the Senior Board of the Vancouver Stock Exchange for the 12 calendar months immediately preceding the filing of the form, has been subject to the continuous disclosure requirements of any securities commission or equivalent regulatory authority in Canada for a period of at least 36 calendar months immediately preceding the filing of the form, and is currently in compliance with obligations arising from such listing and reporting, according to SEC guidelines.

In December 2015, the Canadian Securities Administrators (CSA), the functional equivalent of the SEC in the country, made certain amendments to filing requirements for rights offerings. The purpose of the amendments was to lighten up regulatory burden for companies that wished to raise fresh capital in a way that provided investors an opportunity to protect themselves from equity dilution. It was important that the SEC in the U.S. did not object to the amendments because U.S.-based investors can be a significant source of investment capital for Canadian companies. In February 2017, the SEC did in fact publish a no-action letter, confirming its continued consent for the use of Form F-7 with the basic condition that "an issuer would need to assure that the registration statement and the prospectus satisfied the antifraud and liability provisions under the U.S. Securities Act."