Multijurisdictional Disclosure System Mjds

Key Takeaways

• The Multijurisdictional Disclosure System (MJDS) enables Canadian firms to offer U.S. securities with prospectuses mainly following Canadian disclosure standards.
• MJDS simplifies the regulatory process for cross-border securities offerings, reducing both time and costs for large, publicly-traded companies.
• The system is designed to facilitate easier capital raising by Canadian firms in the U.S. by using Canadian regulatory filings with minor U.S. additions.
• Smaller companies and startups looking to commence an IPO do not qualify for the streamlined processes provided by MJDS.
• The program is reciprocally available to U.S. firms wanting to raise capital in Canada, but it is less commonly used.

What Is the Multijurisdictional Disclosure System (MJDS)?

The Multijurisdictional Disclosure System (MJDS) is a cooperative financial framework between the U.S. and Canada. It simplifies the cross-border securities offering process for eligible Canadian companies by allowing them to enter U.S. markets using Canadian disclosure documents. By harmonizing regulatory requirements, the MJDS reduces costs and administrative burdens for firms listing stock in both countries. Learn how the MJDS works, who qualifies to use it, and how it affects cross-border securities trading

How the Multijurisdictional Disclosure System Streamlines Cross-Border Listings

The MJDS also allows such eligible issuers to comply with U.S. continuous reporting requirements by filing their Canadian disclosure documents with the SEC, subject to certain additional U.S. requirements. The companies also can file the Canadian versions of their routine disclosure documents with the SEC, again with the addition of a few more U.S. requirements.1

A although the SEC retains the right to review filings made under MJDS, it generally defers to the Canadian jurisdiction review, unless it has reason to believe there is a problem with the filing. Effectively, the MJDS acknowledges that the Canadian regulatory requirements are sufficient to protect U.S. investors.

Benefits and Impact of the Multijurisdictional Disclosure System

The effect of the MJDS agreement is to make it significantly easier for Canadian companies to raise funding through securities offerings in the U.S. as well as in Canada. It reduces the cost, time, and administrative burdens associated with issuing a round of stock and reporting it under two separate disclosure regimes.

Canadian companies can raise such funding either in conjunction with issuing securities in Canada, or do it solely in the U.S. There is a reciprocal agreement that allows U.S. firms to raise funding through securities offerings in Canada, although it is used less frequently.

There are a number of requirements for Canadian companies to be eligible to use MJDS. These include a provision that the companies must already be publicly listed in Canada. The public float must also be a certain size.

Who Can Use the Multijurisdictional Disclosure System?

The MJDS is thus not an option for smaller Canadian companies and startups seeking to raise funds through initial public offerings. These companies can still raise funding in the U.S., but they are not eligible for the streamlined system available under MJDS.

The MJDS allows for companies to raise funds with any type of securities with the exception of certain derivative instruments.

Morrison and Foerster. "Frequently Asked Questions About the U.S.-Canadian Multijurisdictional Disclosure System." Accessed Jan. 31, 2021.

Morrison and Foerster. "Frequently Asked Questions About the U.S.-Canadian Multijurisdictional Disclosure System." Accessed Jan. 31, 2021.

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