On June 7, 2012, the Ontario Securities Commission (the “OSC”) announced that it is broadening the scope of its exempt market review as a result of stakeholder feedback. The expanded review will consider whether the OSC should introduce new prospectus exemptions that may assist capital raising for business enterprises while protecting investors.
As discussed in a previous post, on November 10, 2011, the Canadian Securities Administrators published specific consultation questions with respect to its review of the $150,000 minimum amount and the accredited investor prospectus exemptions contained in National Instrument 45-106 – Prospectus and Registration Exemptions. As part of this consultation process, the OSC met with over 300 individuals and several interested stakeholder groups. Some stakeholders suggested that the OSC should consider prospectus exemptions based on a number of factors, such as the financial resources of a purchaser relative to the size of the investment and the availability of disclosure regarding the investment.
In addition to the introduction of new prospectus exemptions, the OSC will continue to assess whether the minimum amount and accredited investor prospectus exemptions are appropriate. The OSC will publish a second consultation note and seek further public feedback to determine whether new prospectus exemptions should be adopted, and if so, under what circumstances.
For more details, please see OSC Staff Notice 45-707.