obtaining information and/or due diligence regarding the issuer (e.g.,
• Investors will be required to enter into an investor agreement with the
Portal acknowledging, among other things, the high risk nature of their
investments, the illiquidity in the securities to be acquired and that the
Portal is not responsible for any misrepresentations by an issuer in any
materials provided to investors through the Private Portal.
The Order sets out a list of activities the Portal cannot do,
• participating in the creation of offering documents, other than
providing assistance to issuers with respect to their pitch information
prior to it being made available to investors, handling funds, or
assisting in the completion of an issuer’s subscription documentation.
• participating in a “referral arrangement” (as defined in section 13. 7
of NI 31-103), issuing any securities of any related for connected
issuer, or lending money or extending credit to investors to finance
any purchase of a security.
The OSC will complete background checks on current and
prospective employees of the Portal that meet the definition of
“registered individual” or “permitted individual” in section 1.1 of
NI 33-109. The Portal cannot refer to itself as an ‘exchange’ or
‘trading system’, will comply with applicable securities legislation
in relation to any advertising and can charge access fees to
issuers on a per offering basis; investors will not be charged any
fees. The Portal is required maintain books and records, and must
provide a quarterly report to the OSC regarding its activities. The
Portal has agreed to remove any issuer from the Portal or prohibit
any person from accessing the Portal at the request of the OSC.
Portal Due Diligence
• The Portal will require issuers to provide copies of constating
documents indicating the location of such issuer’s registered office
and an officer’s certificate with respect to the issuer’s primary place
of business in order to verify the Ontario residence of social impact
issuers and/or environmental impact issuers.
• The Portal will require directors and officers of the issuer at the
time of initial application to complete a personal information form
and consent to criminal record and other background checks. In
addition, each issuer will be required to provide at least two business
references in order to help establish the reputation of the issuer’s
leadership. Based on the results of such investigations, the Portal is
required to observe certain procedures as set out in the Order.
Issuers will be required to make available to investors certain
general disclosure about the issuer including, a description of the
business and terms of the offering so that an AI can independently
evaluate and assess the merits of an offering. No secondary
trading of securities is permitted through the Portal. The Portal
will require each issuer to enter into an issuer agreement that
requires, among other things, that issuers must prepare and send
to security holders:
• annual audited financial statements prepared in accordance with
Canadian GAAP within 120 days of year-end; and
• six-month interim financial statements prepared in accordance with
Canadian GAAP within 60 days after the end of its six-month interim
In addition, in each case, together with those financial
statements, an issuer must prepare and send to securityholders
an update on the issuer’s business activities, including with
respect to the use of proceeds received by the issuer from its
investors; in each case, for so long as the issuer has outstanding
securities in respect of which offerings were posted on the Portal.
• Issuers that have access to the Portal can undertake supplementary
marketing activities, as approved by the Portal, including webinars,
meetings, presentations, investor breakfasts and other forms
of marketing targeted exclusively to AIs that have satisfied the
requirements for accessing the Portal and their financial advisors.
However, only AIs who have signed an investor agreement with
the Portal will be invited to the marketing events. Any additional
information about issuers or offerings, beyond information already
available on the Portal provided at these supplementary marketing
events will be filed on the Portal shortly after each such event.
• The Portal will require each issuer to confirm that it is responsible
for compliance with applicable securities laws, including those
pertaining to prospectus exemptions, the drafting/delivery/filing of
offering memoranda, the filing of reports of exempt distributions and
the payment of private placement fees.
A copy of the Order is available at http://www.osc.gov. on.ca/en/
For more information contact:
firstname.lastname@example.org | 416.860.2955
The contents of this article do not constitute legal advice and is provided for information purposes
only. This article does not necessarily reflect the opinions of Cassels Brock & Blackwell LLP or any
of its lawyers or clients or those of the Exempt Market Dealers Association of Canada. The content
of this article is not intended to be used as a substitute for specific legal advice or opinions.
1. A “restricted dealer” is a special type of dealer that is permitted under NI
31-103 for dealers that do not squarely fit within any existing dealer category
under NI 31-103 such as ‘exempt market dealer’ or ‘investment dealer’.
2. “social impact issuer” means an issuer that focuses on creating
opportunities and/or breaking the cycle of poverty in subsectors
including, but not limited to, affordable housing, employment services,
food security, education, First Nations and new Canadians.
3. “environmental impact issuer” means an issuer that focuses on building
environmental sustainability in subsectors including, but not limited to, renewable
energy, sustainable agriculture, consumer products, water and transportation.
4. “permitted client” is defined in section 1.1 of NI 31-103.
5. “NI 33-109” means National Instrument 33-109
Registration Information Requirements.