The OSC has published for comment proposed OSC Rule 72-503 – Distributions Outside of Canada and proposed Companion Policy 72-503CP to OSC Rule 72-503 Distributions Outside of Canada. The comment period closes on September 28, 2016.
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“The proposal and exemptions will provide Ontario participants with greater certainty in their cross-border activities, particularly regarding capital raising,” said Huston Loke, Director, Corporate Finance.
The Commission’s approach to distributions outside Canada has evolved over time, as has case law on provincial jurisdiction over activities outside the province. The proposal would replace existing OSC guidance, to bring it in line with the current OSC Staff practice.
The proposed rule would generally provide exemptions from prospectus requirements for distributions of securities outside of Canada and only restrict resale to individuals or companies in Canada in limited circumstances. The proposed rule would also provide an exemption from the dealer and underwriter registration requirement in respect of a distribution of securities to individuals or companies outside of Canada subject to certain conditions.
Issuers relying on most of the exemptions will be required to file a report of the exempt distribution through the OSC’s Electronic Filing Portal.
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