On April 26, 2012, the Canadian Securities Administrators
("CSA") published two staff notices addressing disclosure
requirements related to the prospectus exemptions found under
National Instrument 45-106 – Prospectus and Registration
Exemptions ("NI 45-106"). The notices are aimed at
improving compliance by issuers, underwriters and their advisors
and assisting market participants in avoiding deficiencies in their
NI 45-106-related filings.
In CSA Staff Notice 45-308 – Guidance for
Preparing and Filing Reports of Exempt Distribution, the CSA
provides guidance relating to reports of exempt distribution filed
in accordance with Form 45-106F1. Specifically, the notice
highlights a number of issues observed by the CSA and clarifies
requirements in respect of such topics as filing deadlines, filing
fees, improper reliance on unavailable exemptions, failure to
include a complete list of purchasers and failure to disclose all
commissions and finder's fees.
In Multilateral CSA Staff Notice 45-309 –
Guidance for Preparing and Filing an Offering Memorandum, the
CSA addresses compliance with the rules relating to offering
memoranda ("OM"). The CSA highlights that issuers must
ensure that an OM is in the correct form, does not contain any
misrepresentations and provides sufficient information to enable a
prospective purchaser to make an informed investment decision.
Issues identified by the CSA include the failure to update the OM
when distributions are ongoing, using an incorrect form of update
and inadequately disclosing the issuer's business. While the OM
exemption is not available in Ontario, the guidance in Staff Notice
45-309 applies to Ontario-based issuers distributing securities in
other jurisdictions under the OM exemption.
Each Notice confirms that responsibility for compliance with NI
45-106 rests with the issuer, that the use of a prospectus
exemption under NI 45-106 is subject to regulatory oversight and
monitoring and that identified non-compliance may result in
corrective action where appropriate.
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