I. The Offering Memorandum Exemption – A Basic Primer
There are two existing models of the OM Exemption in
Canada: the ‘British Columbia model’ and the ‘Alberta model’.
The British Columbia model is currently in effect in the Provinces of
British Columbia, New Brunswick, Nova Scotia and Newfoundland
and Labrador. The Alberta model is currently in effect in the
Provinces of Alberta, Manitoba, Prince Edward Island, Québec,
Saskatchewan and the Northwest Territories, Nunavut and the
Yukon. Ontario does not currently have an OM Exemption but is
considering implementing a variant of the Alberta model.
The graphic below set out the availability of the OM Exemption
and different models across Canada today.
Under both of these existing models, a purchaser buys a
security as principal and at the same time, or before the purchaser
signs the purchase agreement, the issuer:
a. delivers a prescribed form of offering memorandum (OM) to
b. obtains a signed risk acknowledgement form from the
c. satisfies other requirements (as discussed below).
Under both models, issuers can sell securities to the public
with no limit on the amount of capital that can be raised by an issuer
or the amount invested by an investor. The key difference is that
under the Alberta model any investor who does not qualify as an
“eligible investor” is limited to a maximum of $10,000, while “eligible
investors” have no investment limits.