Post Script - the OM Exemption not in Ontario, but Coming Soon?
As readers know, the OM Exemption is not available in Ontario. Since the securities regulators
do not review, comment or receipt OMs as they do in a prospectus, a primary concern for Ontario
has always been the quality of OM disclosure. This is another reason why the industry needs to
review the quality of its OMs if Ontario is to consider adopting the OM Exemption.
The EMDA, in its comment letter involving CSA Staff Consultation Note 45-401 – Review of the
Minimum Amount and Accredited Investor Exemptions – Public Consultations, has recommended
that Ontario adopt a form of OM exemption. We refer readers to the EMDA comment letter that is
available on the EMDA web site.
On June 7, 2012, the Ontario Securities Commission (the OSC) announced that it is broadening
the scope of its exempt market review as a result of stakeholder feedback. The expanded review
will consider whether the OSC should introduce new prospectus exemptions that may assist capital
raising for business enterprises, while protecting the interests of investors. This means that the OM
Exemption is back on the OSC’s regulatory agenda, which is great news for all market participants.
users of this service have been first-time issuers, and that issuers
have regularly made use of this service since its inception in 2008.
(b) New Brunswick Securities Commission
In New Brunswick, issuers may provide a draft OM on a
voluntary basis for staff review to identify any significant issues
before it is used. The availability of this service was disclosed
in January 2011 in the NBSC’s “Guide to Raising Money Using
an Offering Memorandum”, but the practice has been informally
encouraged by the NBSC prior to that date. The NBSC reports
that is has been regularly used by issuers in the province.
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.
The content of this article is not intended to be used as a substitute for
specific legal advice or opinions.
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1. “qualifying issuer” means a reporting issuer in a jurisdiction of Canada
that: (a) is a SEDAR filer, (b) has filed all documents required to be filed
under the securities legislation of that jurisdiction, and (c) if not required
to file an annual information form (AIF), has filed in the jurisdiction, (i)
an AIF for its most recently completed financial year for which annual
statements are required to be filed, and (ii) copies of all material
incorporated by reference in the AIF not previously filed.
2. Note that certain jurisdictions such as Alberta and British Columbia
have separate and specific form requirements involving certain types of
real estate offerings.
3. SFSC Staff Notice 45-704, “Review of Offering Memoranda under NI
45-106 Prospectus and Registration Exemptions” available at: http://
4. This exemption is available in all Canadian jurisdictions except Ontario.
5. See: http://www.sfsc.gov.sk.ca/adx/aspx/ adxGetMedia.aspx?DocID=1
6. See http://www.nbsc-cvmnb.ca/nbsc/docs/OM-Brochure-(
7. See: EMDA comment letter involving CSA Staff Consultation Note
45-401 – Review of the Minimum Amount and Accredited Investor
Exemptions – Public Consultations at: http://www.emdacanada.
8. OSC Staff Notice 45-707 – OSC Broadening Scope of Review Of
Prospectus Exemptions at http://www.osc.gov. on.ca/en/SecuritiesLaw_