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The OSC published its Exempt Market Review on November 5, 2015. This review provides an overview of exempt market activity in Ontario in 2014, including the following statistics:

  • Non-investment fund issuers raised approximately $41 billion through prospectus-exempt distributions in Ontario from approximately 22,000 purchases made by Ontario residents.
  • The accredited investor exemption was the most widely used prospectus exemption in Ontario. In 2014 it represented 92% of the capital raised, 74% of filings and almost two-thirds of purchases.
  • The minimum amount investment exemption was the second most used prospectus exemption by number of filings and amount raised.
  • Although equity securities represented close to two-thirds of purchases and filings, debt-related securities raised a larger proportion of capital (approximately 68%).
  • Issuers in the energy and materials industry group were the most active group of non-financial issuers in the exempt market.
  • Only about a quarter of the capital raised was by reporting issuers.
  • Among filings by non-reporting issuers, only about half were from issuers that were headquartered in Canada.

Most of the prospectus exemptions are now in force in Ontario except for the offering memorandum (OM) and the crowdfunding exemptions, which are expected to come into force in January 2016 as set out in the below table:

Prospectus Exemption Status in Ontario
Existing security holder exemption In force since February 11, 2015
Friends, family and business associates exemption In force since May 5, 2015
Rights offering exemption In force on December 8, 2015
OM exemption Expected to come into force on January 13, 2016
Crowdfunding exemption Expected to come into force on January 25, 2016

The OSC is currently developing a compliance and oversight program to monitor distributions under the OM and crowdfunding exemptions.

This article contains general information only and is not intended to provide a legal opinion or advice. Please consult a lawyer or compliance advisor for matters related to your situation before relying on any of the statements made in this article.