On November 5, 2015, the Ontario Securities Commission (OSC) published its Exempt Market Review to provide background on the status of various new prospectus exemptions that it has proposed.  The table below provides an overview of the status of these prospectus exemptions in Ontario as set out in the Exempt Market Review.

Prospectus Exemption

Status

Existing security holder exemption

In force in Ontario since February 11, 2015

Friends, family and business associates exemption

In force in Ontario since May 5, 2015

Rights offering exemption

Expected to come into force in Ontario on December 8, 2015

Offering memorandum exemption

Expected to come into force in Ontario on January 13, 2016

Crowdfunding exemption

Expected to come into force in Ontario on January 25, 2016

The Exempt Market Review provides notice of some other interesting developments:

  • The OSC noted that they have received a number of applications from intermediaries that plan to register as dealers in order to operate online platforms.  The OSC reminds these intermediaries that the availability of a prospectus exemption to distribute securities is separate and apart from registration requirements and a prospectus exemption does not mean that there is a corresponding registration exemption.
  • The OSC is developing a compliance and oversight program to monitor distributions under the OM and crowdfunding exemptions.  The program will assess compliance, enhance awareness and gather data to support these activities.

Finally, the Exempt Market Review provides an overview of exempt market activity in Ontario in 2014.  Notably, $41 billion was raised by non-investment fund issuers in Ontario in 2014 through approximately 22,000 purchased by Ontario residents.  The accredited investor exemption and the minimum amount exemption were the most commonly used prospectus exemptions.  Debt-related securities accounted for approximately 68% of the capital raised.

For further information, please consult the OSC’s Exempt Market Review.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.