Canada: Ontario Prospectus And Registration Exemptions — Amendments To National Instrument 45-106 And OSC Rule 45-501 Arising From Ontario Budget Bill 162: Other Changes To National Instrument 45-106

OSC Notice

In its May 22, 2009 Notice (Notice), the Ontario Securities Commission published for comment proposed changes (Proposed Modifications) to proposed amendments to National Instrument 45-106 Prospectus and Registration Exemptions (NI 45-106), National Instrument 45-102 Resale of Securities (NI 45-102) and OSC Rule 45-501 Ontario Prospectus and Registration Exemptions (OSC Rule 45-501) that were originally published for comment on February 29, 2008 (Proposed Rule Amendments). The Proposed Rule Amendments, in turn, are related to proposed changes to National Instrument 31-103 Registration Requirements (NI 31-103) and to the registration reform initiative of the Canadian Securities Administrators (CSA), first published on February 23, 2007. Following a comment period, NI 31-103 was republished on July 17, 2009 and will come into force on September 28, 2009. We are also reporting on changed NI 31-103 in this issue of the Business Law Quarterly.

The Proposed Rule Amendments affect prospectus and registration exemptions, and resale provisions for securities distributed under the prospectus exemptions, while the Proposed Modifications address the application in Ontario of certain of those provisions.

Ontario Budget Bill 162

The Notice was published as a result of the Ontario budget bill, the Budget Measures Act, 2009, (Bill 162) that was introduced on March 26, 2009. Bill 162 includes amendments to the Securities Act (Ontario) (OSA), found in Schedule 26 to Bill 162 (Proposed OSA Amendments). Schedule 26 received Royal Assent on June 5, 2009 but most of its provisions will come into force by proclamation at a later date. The Proposed OSA Amendments amend statutory provisions for registration requirements for dealers, advisors and others, for exemptions from the registration requirements and from the prospectus requirements, and for the resale of securities previously distributed under an exemption from the prospectus requirement. A consultative draft of the proposed amendments to the registration requirements and registration exemptions (Consultative Draft) was published by the Ontario Ministry of Finance on April 24, 2008. The Proposed OSA Amendments will require amendments to NI 31-103 in order to reflect the fact that the Ontario government proposes to maintain in the OSA, rather than in NI 31-103, certain of the registration requirements, and certain of the registration exemptions.

Ontario — Stage 1 OSA Amendments

The Proposed Modifications published by the OSC with its Notice relate only to certain of the Proposed OSA Amendments, namely, the Stage 1 OSA Prospectus Exemption Amendments, such that prospectus exemptions for which there is a corresponding registration exemption in the OSA, rather than in a rule, will be maintained in the OSA and not in a rule. The OSC notes that it is intended that the Proposed Modifications will come into effect when the changed NI 31-303 becomes effective.

Ontario — Stage 2 OSA Amendments

The OSC has advised that if certain additional second stage Proposed OSA Amendments in Bill 162 come into force at a date later than the date when the changed NI 31-103 and the Stage 1 OSA Prospectus Exemption Amendments come into force, further modifications will be required to NI 45-106 and OSC Rule 45-501. The Stage 2 OSA Prospectus Exemption Amendments would maintain in the OSA, rather than in a rule, an additional limited number of prospectus exemptions including the "accredited investor" exemption, the "private issuer" exemption, and the "government incentive security" exemption. These amendments to the prospectus exemption provisions were not included in the Consultative Draft. The language of these statutory prospectus exemptions in Bill 162 does not faithfully track the corresponding language in NI 45-106.

The Unique Ontario Approach

Bill 162 reflects an approach by the Ontario government that is similar to the approach it took in connection with changes adopted by the CSA to the takeover bid and issuer bid rules, which came into force on February 1, 2008. These rules were created so that there would be a harmonized set of rules applicable in all Canadian jurisdictions. At that time, Ontario elected to keep certain takeover bid and issuer bid provisions in the OSA while all other Canadian jurisdictions moved them to the rules. As a result, and as reported by us earlier, the takeover bid and issuer bid rules are now found in Multilateral Instrument 62-104 Takeover Bids and Issuer Bids for jurisdictions other than Ontario and in Part XX of the OSA and OSC Rule 62-504 Takeover Bids and Issuer Bids for Ontario. In that case, Ontario used its March 2007 budget bill to introduce the amendments to the OSA.

In the case of the rules for prospectus and registration exemptions, Ontario earlier adopted both NI 45-106 and OSC Rule 45-501, so it has an instrument, apart from the OSA, in which to embed the Ontario-only rules that may flow from Bill 162.

Other Changes to NI 45-106

In an initiative unrelated to Bill 162, the CSA announced on July 17, 2009, following a comment period, that it has approved amendments and a restatement of NI 45-106 and amendments to National Instrument 45-102 Resale of Securities (NI 45 102) and their related Forms and Companion Policies and that these restated and amended instruments and policies are expected to come into effect on September 28, 2009, being the same date on which the changed NI 31-103 is expected to come into force.

The restated NI 45-106 reflects substantive changes designed to improve its effectiveness, including:

  • clarification of certain provisions of the NI 45-106 and its companion policy;
  • changes that reflect policy decisions the CSA has made in the course of granting exemptive relief;
  • provision of additional guidance to market participants on the applicability of the exemptions contained in NI 45-106; and
  • harmonization of exemptions previously found in local instruments.

In addition, NI 45-106 has been restructured to support the implementation of the changed NI 31 -103 by setting out the registration exemptions in separate parts, with the part containing the registration exemptions to be phased out six months after the coming into force of the changed NI 31-103.

The amendments to NI 45-102 and its companion policy are designed to:

  • clarify certain of their provisions; and
  • update the legending requirements where an electronic book-entry system is used, or where the purchasers of securities do not receive a paper certificate from the issuer.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.