OSC proposes new rules for raising capital outside Ontario

The OSC is seeking comments on proposed new rules for issuers looking to raise capital outside of Ontario.

On Thursday the Ontario securities regulator published revised OSC Rule 72-503 Distributions Outside Canada, and proposed Companion Policy 72-503 Distributions Outside Canada.

“We have made certain revisions to the rule since its initial publication, including removing resale provisions, in the interests of harmonizing resale regimes across Canada for outbound securities,” Huston Loke, director of corporate finance at the OSC, says in a statement.

“The proposed rule would provide explicit prospectus and registration exemptions that would preserve current cross-border practices. It also responds to the challenges issuers and intermediaries face in determining whether a prospectus must be filed, or an exemption from the prospectus requirement must be relied upon, in connection with a distribution of securities to an investor outside Canada,” an OSC release says.

The revised rule would modernize and replace Interpretation Note 1 Distributions of Securities Outside of Ontario. Resale provisions would instead be covered by the Canadian Securities Administrators foreign issuer resale exemption, which at the same time is being published for comment in an amendment to National Instrument 45-102 Resale of Securities (NI 45-102).

Comments for both proceedings are open until September 27.

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