On November 19, 2019, the Ontario Securities Commission ("OSC") published the "Reducing Regulatory Burden in Ontario's Capital Markets" report (the "Report"), which includes over 100 initiatives designed to reduce the regulatory burden for participants in Ontario's capital markets.
The 107 initiatives highlighted in the report address concerns of market participants identified by OSC staff during a consultation process, and come in addition to a number of burden reduction initiatives already implemented by the OSC during 2019. Special attention was paid to initiatives benefitting small and medium-sized businesses, which make up almost 70% of businesses regulated by the OSC.
The Report indicates that the OSC's burden reduction initiatives are expected to provide aggregate cost-savings to businesses of approximately $7.8 million per year, with businesses seeing enhanced service levels, clearer communication from OSC staff, and new tools and technology to assist with navigating the regulatory process. Of note, start-ups and other innovative businesses will receive more flexibility in regulatory requirements, including in relation to how OSC staff approach registration, which requests have been extremely difficult for start-ups utilizing new and evolving technologies to satisfy.
Highlights of the initiatives include:
- the ability, in some cases, for small and medium-sized businesses to hire a Chief Compliance Officer who also performs that role for other unaffiliated businesses;
- a confidential prospectus review process prior to announcing an IPO or other financing;
- the harmonization of crowdfunding rules across Canada; and
- the ability for public companies to conduct at-the-market offerings without seeking prior exemptive relief.
The Report indicates that initiatives entirely within the OSC's scope will be implemented within one year, with other changes being addressed over a longer period of time. These other changes may require legislative amendments, harmonization with other securities regulators or longer-term initiatives.
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