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Amendments to OSC Rule 45-501: Prospectus and Registration Exemptions – Family, Friends and Business Associates Exemption [Completed]

Issued: February 19, 2015.

Transitional provisions:

The amendments came into force on May 5, 2015.

Last updated:

February 2015


On February 19, 2015, the Ontario Securities Commission (OSC) adopted a family, friends and business associates prospectus exemption (the FFBA Exemption) which is expected to provide a cost-effective way for issuers (other than investment funds) to raise capital from their networks of family, close personal friends and close business associates. The prospectus exemption is being made by means of an amendment to OSC Rule 45-501, Ontario Prospectus and Registration Exemptions.

The FFBA Ex­emp­tion comes into ef­fect on May 5, 2015. The ex­emp­tion is largely har­mo­nized with an ex­emp­tion that is cur­rently avail­able in other Cana­dian ju­ris­dic­tions. It al­lows for the sale of se­cu­ri­ties by a sell­ing se­cu­rity holder or an is­suer to prin­ci­pals of the is­suer as well as cer­tain fam­ily mem­bers, close per­sonal friends and close busi­ness as­so­ci­ates. The ex­emp­tion is based on in­vestors hav­ing a suf­fi­ciently close re­la­tion­ship with a prin­ci­pal of the is­suer to as­sess the ca­pa­bil­i­ties and trust­wor­thi­ness of the prin­ci­pals and ac­cess in­for­ma­tion about their in­vest­ment.

The adoption of this FFBA Exemption fol­lows a com­pre­hen­sive re­view by the OSC of the ex­empt mar­ket. In finalizing the exemption, OSC Staff have co­or­di­nated their ef­forts to achieve sub­stan­tial har­mo­niza­tion with the cur­rent ini­tia­tives and ex­ist­ing ex­emp­tions of other mem­bers of the CSA.

Recent activities

Feb­ru­ary 2015

On Feb­ru­ary 19, 2015, the OSC adopted a fam­ily, friends and busi­ness as­so­ci­ates prospec­tus ex­emp­tion which is ex­pected to pro­vide a cost-ef­fec­tive way for is­suers (other than in­vest­ment funds) to raise cap­i­tal from their net­works of fam­ily, close per­sonal friends and close busi­ness as­so­ci­ates.

March 2014

On March 20, 2014, the OSC pub­lished for pub­lic com­ment pro­pos­als for four prospec­tus ex­emp­tions, including one in respect of family, friends and business associates.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.