The Ontario Securities Commission will publish new capital raising prospectus exemptions in in the first quarter of 2014.

Read: EMDs must fix regulatory deficiencies, says OSC

Advisors will be able to comment over a 90-day period on:

  • an offering memorandum exemption;
  • a family, friends and business associates exemption;
  • an existing security holder exemption; and
  • a crowd funding exemption, which would be combined with a registration framework for online funding portals

“The OSC has…to consider whether [its] regulatory framework supports efficient capital formation and contributes to Ontario’s economic growth,” says Howard Wetston, chair and CEO of the OSC.

Background


The OSC published OSC Notice 45-712 on August 28, 2013. That notice was a progress report on its review of prospectus exemptions that support capital raising. The objective of the commission’s work is to facilitate capital raising for start-ups and small companies.

Read: OSC reveals next step in exempt market review

Further, regulatory authorities in all other provinces, besides Newfoundland, published for comment a proposed prospectus exemption that would allow issuers listed on the TSX Venture Exchange 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 and rely on their continuous disclosure record, thereby providing issuers with access to an additional source of financing and potentially reducing costs for investors.

Read: Regulators propose exemption for venture issuers

The comment period on the CSA proposal closes on January 20, 2014. The OSC supports the CSA proposal and will consider the comments on that proposal in developing its proposed existing security holder exemption. Commenters are being encouraged to share their comments on the CSA proposal with the OSC.

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