OSC reveals next steps in exempt market review

By Staff | August 28, 2013 | Last updated on August 28, 2013
2 min read

The Ontario Securities Commission has outlined the next steps of its current exempt market review.

The commission says it wants to facilitate capital raising for start-ups, as well as small and medium-sized enterprises. Ensuing rules changes will help modernize Ontario’s exempt market regulatory regime and also protect investors.

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After reviewing feedback from a broad range of stakeholders, the OSC will consider the following capital raising prospectus exemptions:

  • a crowd funding exemption, which aims to develop a crowd funding regulatory framework (focused most on investing through online funding portals);
  • a family, friends and business associates exemption, given versions of this exemption are currently available in other Canadian jurisdictions;
  • an offering memorandum exemption that would be substantially harmonized with the existing model in Alberta and other Canadian jurisdictions; and
  • a streamlined version of the existing rights offering exemption currently available across Canada.

“The exempt market plays an important role in Ontario’s capital markets, especially for start-ups and SMEs,” says Howard Wetston, chair and CEO of OSC. “Our continued work in this area promotes an exempt market that is innovative and globally competitive.”

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Any resulting rules proposals brought forward by OSC will be released for comment. The commission says the work completed to date regarding its exempt market review includes:

  • A consultation paper that considered concept ideas for new capital raising prospectus exemptions. It garnered more than 100 comment letters;
  • An investor survey that examined retail investors’ interest in start-ups and SMEs; and
  • The forming of an ad hoc committee that advises on exempt market issues.

Quick facts about the 2012 exempt market:

  • The total amount of capital raised in Ontario increased by 20% to approximately $104 billion, compared to $87 billion in 2011
  • Of that amount, approximately $37 billion was raised by issuers other than investment funds
  • The accredited investor exemption accounted for approximately $94 billion, or 90% of the total capital raised in Ontario’s exempt market. That compares to $73 billion in 2011, or about 83%.

Nearly $7 billion was raised under the minimum amount prospectus exemption, compared to $4 billion in 2011.

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Advisor.ca staff


The staff of Advisor.ca have been covering news for financial advisors since 1998.