The Ontario Securities Commission (OSC) has announced
proposed rule amendments designed to remove
certain Canadian-specific disclosure requirements for offerings of
foreign securities in Ontario to sophisticated investors on a
private placement basis.
The intended purpose of the proposed amendments is to eliminate
the requirement for a "wrapper" that is normally included
with the offering document when foreign securities are offered to
sophisticated Ontario investors under a prospectus exemption.
Essentially, when a foreign offering document is used to distribute
securities in Ontario, it falls under the definition of an
"offering memorandum" under the Securities Act (Ontario).
Accordingly, certain Ontario-specific disclosure must be added to
the offering document before it can be provided to prospective
purchasers in Ontario. The offering document may either be amended
to include the necessary Ontario-specific language, or more
commonly, a supplemental document known as a "wrapper" is
attached to the face of the document, and the two combine to form
an Ontario offering memorandum for the purposes of offering
securities in Ontario.
Many institutional investors and other market participants have
expressed concern that the current requirements restrict investor
access to foreign investment opportunities, due to, among other
reasons, the time and expense associated with retaining counsel and
preparing a "wrapper" to meet Ontario disclosure
requirements. Market participants have also expressed that such
cost and delay may discourage some issuers/dealers from extending
foreign offerings into Ontario.
The OSC anticipates that the proposed amendments will facilitate
participation by sophisticated Ontario investors in foreign
securities offerings and provide them with a wider range of
The OSC's announcement was made in conjunction with the
publication of a decision on an application made in Ontario (and
certain other jurisdictions) by a group of dealers for exemptive
relief to address these issues. In order to ensure that dealers
outside of the applicant group are not disadvantaged, the OSC
decision will have a 60-day period of delayed effectiveness to
allow other parties sufficient time to apply for similar
The proposed rule amendments are subject to a 90-day comment
period. The document is available on the OSC's website: www.osc.gov.on.ca.
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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.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan 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.
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