Short-Form Prospectus Distribution System (SFPDS)

The Short-Form Prospectus Distribution System is a standard system Canadian regulators use to distribute changes to the prospectus for each issue of security. The short-form prospectus must contain any material changes not previously reported.

A short-form prospectus must contain any changes in the material that were not reported previously. Some issuers continuously disclose information. They have an opportunity to use the short-form prospectus distribution system. This system is quicker and more cost-effective compared with the conventional means of prospectus distribution.

This is a standard system used by Canadian regulators for distributing the changes to the prospectus for every issue of security. Firms can use the short-form prospectus distribution system if they continuously distribute the information to their investors and therefore do not want to go through the trouble of issuing a new prospectus for every new issue and change to an old issue. The short-form prospectus distribution system needs less information than a full prospectus.

A prospectus is a formal legal document that provides details about an investment offering for sale to the public. The preliminary prospectus is the first offering document provided by a security issuer and includes most of the details of the business and transaction in question; the final prospectus, containing finalized background information including such details as the exact number of shares/certificates issued and the precise offering price, is printed after the deal has been made effective. In the case of mutual funds, a fund prospectus contains details on its objectives, investment strategies, risks, performance, distribution policy, fees and expenses, and fund management.

A prospectus includes the name of the company issuing the stock or the mutual fund manager, the amount and type of securities being sold and, for stock offerings, the number of available shares. The prospectus also details whether an offering is public or private, how much the underwriters are earning per sale and names of the company’s principals. A summary of the company’s financial information, whether the prospectus was approved and other pertinent information is included as well.

Unlike any other major federation, Canada does not have a securities regulatory authority at the federal government level. Canadian securities regulation is managed through laws and agencies established by Canada's 13 provincial and territorial governments. Each province and territory has a securities commission or equivalent authority and its piece of provincial or territorial legislation.

The Canadian Securities Administrators is an umbrella organization of Canada’s provincial and territorial securities regulators whose objective is to improve, coordinate and harmonize regulation of the Canadian capital markets.