OSC considers four new exemptions

OSC considers four new exemptions

OSC considers four new exemptions

The Ontario Securities Commission wants your feedback on four new capital raising prospectus exemptions proposed by the Canadian Securities Administrators.

The exemptions, announced Wednesday, include: an offering memorandum exemption; family, friends and business associates exemption; existing security holder exemption, and a crowdfunding exemption, together with a registration framework for online funding portals.

“The OSC has a responsibility to consider whether our regulatory framework supports efficient capital formation and contributes to Ontario’s economic growth,” said Howard Wetston, Q.C., Chair and CEO of the OSC. “It is important that our continued work in this area promotes an innovative and competitive exempt market that facilitates capital raising while protecting investors.”

On Aug. 28, 2013, the OSC published OSC Notice 45-712 Progress Report on Review of Prospectus Exemptions to Facilitate Capital Raising, which sets out the next steps in the OSC’s exempt market review and consideration of these possible new prospectus exemptions.

The objective of this work is to facilitate capital raising for start-ups and small and medium-sized enterprises and to modernize Ontario’s exempt market regulatory regime.

On Nov. 21, 2013, the securities regulatory authorities in British Columbia, Alberta, Saskatchewan, Manitoba, Québec, New Brunswick, Nova Scotia, Yukon, Northwest Territories, Nunavut and Prince Edward Island published for comment a proposed prospectus exemption that would, subject to certain conditions, allow issuers listed on the TSX Venture Exchange (TSX-V) to raise money by distributing securities to their existing security holders.

The proposed exemption would allow TSX-V-listed issuers to distribute securities to existing security holders, relying on their continuous disclosure record, thereby providing issuers with access to an additional source of financing and potentially reducing costs for investors.

The 90-day comment period on the CSA proposal closes on Jan. 20, 2014. Commenters can email their feedback on the CSA proposal with the OSC to comments@osc.gov.on.ca. All comments will be posted to the OSC website to ensure transparency in the policy-making process.