Multijurisdictional Disclosure System (MJDS)

What Is the Multijurisdictional Disclosure System (MJDS)?

The Multijurisdictional Disclosure System (MJDS) was adopted jointly in July 1991 by the U.S. Securities and Exchange Commission (SEC) and the Canadian Securities Administrators. The agreement makes it simpler for companies on the two sides of the border to list their stocks on exchanges in the two countries.

The SEC notes that the MJDS permits eligible Canadian issuers to register securities under the Securities Act and to register securities and report under the Exchange Act by utilization of archives prepared to a great extent as per Canadian requirements.

The Multijurisdictional Disclosure System permits eligible Canadian companies to offer securities in the U.S. utilizing a prospectus that is to a great extent prepared to meet Canadian disclosure requirements.

Figuring out the Multijurisdictional Disclosure System (MJDS)

The MJDS additionally permits such eligible issuers to follow U.S. continuous reporting requirements by filing their Canadian disclosure records with the SEC, subject to certain extra U.S. requirements. The companies likewise can file the Canadian variants of their normal disclosure reports with the SEC, again with the expansion of a couple of more U.S. requirements.

An albeit the SEC holds the right to survey filings made under MJDS, it generally concedes to the Canadian jurisdiction audit, except if it has motivation to accept there is a problem with the filing. Effectively, the MJDS recognizes that the Canadian regulatory requirements are adequate to safeguard U.S. investors.

Effect of the Multijurisdictional Disclosure System

The effect of the MJDS agreement is to make it fundamentally more straightforward for Canadian companies to raise funding through securities offerings in the U.S. as well as in Canada. It decreases the cost, time, and administrative burdens associated with giving a round of stock and reporting it under two separate disclosure systems.

Canadian companies can raise such funding either related to giving securities in Canada, or do it exclusively in the U.S. There is a reciprocal agreement that permits U.S. firms to raise funding through securities offerings in Canada, in spite of the fact that it is utilized less regularly.

There are a number of requirements for Canadian companies to be eligible to utilize MJDS. These incorporate a provision that the companies must as of now be publicly listed in Canada. The public float must likewise be a certain size.

Qualification Rules for Multijurisdictional Disclosure System

The MJDS is in this manner impossible for smaller Canadian companies and startups seeking to raise funds through initial public offerings. These companies can in any case bring funding up in the U.S., yet they are not eligible for the streamlined system accessible under MJDS.

The MJDS considers companies to raise funds with a securities with the exception of certain derivative instruments.

Features

• The agreement cuts down on the cost and administrative burden of filing on the two sides of the border.
• Under the MJDS, the U.S. Securities and Exchange Commission acknowledges reports prepared for its Canadian partner for audit of applications to sell securities in the U.S. markets, with minor augmentations.
• The cycle is open to bigger publicly-listed companies, as opposed to small companies or startups planning to send off an initial public offering (IPO).