Une nouvelle dispense de l'obligation d'information sur les conflits chez les placeurs a été adoptée par la Commission des valeurs mobilières de l'Ontario (« CVMO ») et dispense les émetteurs et autres personnes de l'obligation de fournir cette information dans le cadre de placements dispensés des obligations de prospectus de « titres étrangers admissibles » auprès de clients autorisés en Ontario.

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A new exemption from underwriting conflicts disclosure has been adopted by the Ontario Securities Commission (OSC) which exempts issuers and others from providing such disclosure in prospectus-exempt distributions of "eligible foreign securities" to permitted clients in Ontario.

  • Ontario Instrument 33-507 Exemption From Underwriting Conflicts Disclosure Requirements (the Instrument) exempts issuers from the underwriting conflicts of interest disclosure requirements in National Instrument 33-105 Underwriting Conflicts (NI 33-105) where:
    • the distribution is exempt from the prospectus requirement;
    • the securities distributed are "eligible foreign securities"; and
    • each purchaser in Ontario is a permitted client.
  • The Instrument came into effect on February 18, 2021 and will remain in force for 18 months, unless a substantially similar amendment is made to NI 33-105 first.

Underwriter Conflicts of Interest

NI 33-105 requires that certain disclosures be made in specified circumstances where there is a direct or indirect relationship between the issuer or selling securityholder and underwriter that might give rise to the perception that they are not independent of each other in connection with a distribution. As part of the "wrapper relief" amendments adopted in 2015 (Wrapper Relief), the Canadian Securities Administrators (CSA) provided an exemption to this requirement for "eligible foreign securities" where the distribution is made to a "permitted client" through a "registered dealer" or an "international dealer" (each as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations). In order to rely on Wrapper Relief, the following conditions must be met:

  • An exempt offering document (in Ontario, an offering memorandum) must be prepared and delivered to the permitted client.
  • The exempt offering document must include a prescribed written notice to the permitted clients.
  • A concurrent distribution of the securities is made by the issuer to investors in the U.S.;
  • If applicable, the disclosure provided in the exempt offering document is made in compliance with FINRA rule 5121; and
  • The distribution is made in compliance with applicable U.S. federal securities laws.

A Streamlined Exemption

The Instrument further streamlines a foreign issuer's ability to offer securities in Ontario by providing an exemption from the underwriting conflicts disclosure requirement that is significantly simpler than Wrapper Relief. Namely, a person or company is exempt from the underwriting conflicts of interest disclosure provided that:

  • The distribution is made under an exemption from the prospectus requirement (for example, the accredited investor exemption);
  • The distribution is of an "eligible foreign security" (as defined in NI 33-105); and
  • Each purchaser in Ontario that purchases a security under the distribution through such person or company is a permitted client.

The Instrument was adopted as a result of a number of institutional investors in Ontario advising the OSC that the underwriting conflicts of interest disclosure requirement serves as a barrier to Ontario investors participating in global offerings on a timely basis. This concern was further bolstered by the recently published Final Report of the Ontario Capital Markets Modernization Taskforce which recommended that the OSC adopt an exemption from this disclosure requirement for private placements with institutional investors (see Recommendation No. 33).

The Instrument came into effect on February 18, 2021 and will remain effective until the earlier of August 18, 2022 (18 months from the date of the Instrument) and the effective date of a substantively similar amendment to NI 33-105.

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.