What Is SEC Form F-10?
SEC Form F-10 is a form the Securities and Exchange Commission (SEC) requires certain publicly traded Canadian foreign private issuers to complete to register and sell securities in the United States.
These issuers must have been subject to continuous disclosure by a Canadian authority over the 12 months preceding the filing in order to register any securities—except certain derivatives. A company filing SEC Form F-10 must also have an aggregate market value of the public float of its outstanding equity shares of at least $75 million.
- SEC Form F-10 is required from certain publicly traded Canadian firms to complete registration and sell securities in the United States.
- Canadian companies must disclose their financial statements in accordance with U.S. Generally Accepted Accounting Principles (GAAP).
- In order to file an SEC Form F-10, the company must meet requirements regarding the types of securities covered under the filing, the appropriate disclosures, and the market value of the offered securities.
Understanding SEC Form F-10
Certain Canadian companies looking to register and sell securities in the United States will complete SEC Form F-10 to register securities under the Securities Act of 1933. Enacted after the stock market crash of 1929, this U.S. legislation calls for companies to disclose their financial statements so that potential investors can review them and make informed investment decisions.
The Securities Act of 1933—often referred to as the "truth in securities" law—requires that companies complete registration forms that provide essential facts and disclosures regarding their securities and overall financial health. SEC Form F-10 is just one of many filings that helps the SEC achieve the act's objectives: that investors are able to receive significant information regarding securities offered and to prevent fraud in the sale of the offered securities.
Before purchasing an investment or security, investors should review the prospectus, which discloses important information about the investment's financial performance and potential risks.
Multijurisdictional Disclosure System (MJDS)
In July 1991, the SEC and the Canadian Securities Administrators approved the Multijurisdictional Disclosure System (MJDS). The goal of the MJDS was to streamline the filing process and make it easier for eligible Canadian companies to raise funding in the United States through the offering of securities.
Canadian companies that meet MJDS requirements can use the same prospectus when filing with the SEC that they prepared to meet Canadian disclosure requirements. This enables companies to save time and reduce the administrative burdens and costs associated with separate filings.
Thus, SEC Form F-10 is a wraparound form that enables companies eligible for MJDS to use the relevant offering documents required by Canadian securities regulation. However, unlike other SEC forms required of Canadian issuers (F-7, F-8, F-9, and F-80), SEC Form F-10 does demand that the issuer reconcile its financial statements to U.S. Generally Accepted Accounting Principles (GAAP).
Since 1991, certain Canadian companies can use the same prospectus when filing with the SEC that they prepared to meet Canadian disclosure requirements.
Requirements for SEC Form F-10
While the goal of the MJDS is to reduce roadblocks to Canadian companies in obtaining cross-border funding, companies must still comply with the requirements outlined in SEC Form F-10. Below we highlight some key stipulations, such as requirements regarding the types of securities covered under the filing, the appropriate disclosures, and the market value of the offered securities.
Types of Securities
Foreign private issuers incorporated or organized under Canadian laws can use SEC Form F-10 to register securities under the Securities Act of 1933. This includes securities issued in an exchange offer or connected with an amalgamation, merger, or other reorganization requiring a shareholder vote.
Companies cannot, however, use SEC Form F-10 to register derivative securities. Exceptions to this include the registration of certain warrants, options, rights, and convertible securities that meet the requirements specified by the SEC.
Prior to submitting SEC Form F-10, the issuing company must have been subject to and in compliance with the disclosure requirements of the Canadian securities commission or equivalent regulatory authority for at least 12 calendar months immediately preceding the filing. There are some exceptions and additional provisions to this reporting requirement for participating companies that are part of a business combination.
Market Value of Securities
The outstanding equity shares to be offered must have an aggregate market value of the public float of at least $75 million. There are additional provisions to this rule for business combinations, which under certain circumstances may be able to meet the public float requirement based on the outstanding equity shares of each participating company.