Last week, we alerted you to rule amendments proposed by the
Ontario Securities Commission that aim to eliminate the need to
prepare a Canadian "wrapper" for offerings of foreign
securities made in Ontario on a private placement basis to
sophisticated investors. A wrapper is usually a short separate
document that supplements a non-Canadian offering document. The
wrapper contains prescribed information required by Canadian law
for private placements of foreign securities into Canada.
On April 23, 2013, a discretionary exemption was granted by
Canadian securities regulators to a group of applicants involved in
private placements of foreign securities to Canada-based accredited
investors that qualify as "permitted clients" under
National Instrument 31-103 from the need to prepare separate
Canadian wrappers. The exemption order is not available to
investment fund offerings. The exemption order takes effect on June
22, 2013, and can be found on the Ontario Securities Commission
website or by clicking here.
A 60-day window of opportunity now exists to make
"tag-along" applications to obtain the same
The order permits applicants and their affiliates to participate
as underwriters in this category of private placement of foreign
securities without preparing a separate wrapper as long as:
prospective purchasers of the securities receive and
acknowledge a standard-form notice regarding the exemption;
the disclosure required for offerings registered under U.S.
federal securities laws is provided in each offering memorandum to
underwriter conflicts of interest between the
applicant/affiliates and the issuer/selling securityholder;
connected/related issuer relationships;
the applicant files the usual post-trade report of exempt
distribution (Form 45-106F1) in electronic form; and
each month, the applicant provides to the Ontario Securities
Commission a list of the distributions made by it or by its
affiliates in reliance on the order, together with certain details
regarding the offering that are largely duplicative of Form
Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
While most are well aware that the sale of a business is generally a complex process, even sophisticated business owners are surprised by just how much cost and effort is required to complete the sale.
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