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Amendments to OSC Rule 45-501: Prospectus and Registration Exemptions - Existing Security Holder Exemption [Completed]

Issued: November 27, 2014

Transitional provisions:

The ex­emp­tion came into ef­fect on Feb­ru­ary 11, 2015.

Last updated:

November 2014


On November 27, 2014, the Ontario Securities Commission (OSC) adopted an existing security holder prospectus exemption for reporting issuers listed on the Toronto Stock Exchange, TSX Venture Exchange, Canadian Securities Exchange or Aequitas NEO Exchange (upon the effective date of its recognition order). The prospectus exemption is being made by means of an amendment to OSC Rule 45-501, Ontario Prospectus and Registration Exemptions.

The ex­emp­tion al­lows listed re­port­ing is­suers (ex­clud­ing in­vest­ment funds) to raise cap­i­tal from ex­ist­ing se­cu­rity hold­ers on a more cost ef­fec­tive ba­sis. The ex­emp­tion also en­ables ex­ist­ing re­tail se­cu­rity hold­ers to ac­quire se­cu­ri­ties of the is­suer di­rectly, rather than through the sec­ondary mar­ket. A sim­i­lar ex­emp­tion has recently been adopted in other Cana­dian ju­ris­dic­tions. For further details, refer to this CSA Project.

The ex­emp­tion in­cludes a num­ber of in­vestor pro­tec­tion mea­sures, in­clud­ing that is­suers re­ly­ing on the ex­emp­tion must make the of­fer to all ex­ist­ing se­cu­rity hold­ers as of the record date and in­vestors will be sub­ject to in­vest­ment lim­its un­less they ob­tain ad­vice re­gard­ing the suit­abil­ity of the in­vest­ment. Fur­ther, is­suers will be sub­ject to li­a­bil­ity for, among other things, a mis­rep­re­sen­ta­tion in their dis­clo­sure record.

Recent activities

No­vem­ber 2014

On No­vem­ber 27, 2014, the OSC is­sued Amend­ments to OSC Rule 45-501, On­tario Prospec­tus and Reg­is­tra­tion Ex­emp­tions: Ex­ist­ing Se­cu­rity Holder.

March 2014

On March 20, 2014, the OSC pub­lished for pub­lic com­ment pro­pos­als for four prospec­tus ex­emp­tions, including one that would allow public companies listed on the Toronto Stock Exchange, TSX Venture Exchange or Canadian Securities Exchange to raise capital from their existing security holders based on their public disclosure record.



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