With the exception of Ontario and Newfoundland and Labrador, securities regulatory authorities in other Canadian jurisdictions have published a draft prospectus exemption for comment. The exemption would make it easier – and less costly – for issuers listed on the TSX Venture Exchange to distribute securities to existing security holders.
TSX-V listed issuers would need to meet a number of conditions in order to take advantage of the proposed prospectus exemption, including:
• the issuer must have a class of equity securities listed on the TSXV;
• the issuer must have filed all timely and periodic disclosure documents as required under
applicable securities laws;
• the offering can consist only of the class of equity securities listed on the TSXV or units
consisting of the listed security and a warrant to acquire the listed security;
• the issuer must issue a news release disclosing the proposed offering, including details of
the use of proceeds;
• each investor must confirm in writing to the issuer that as at the “record date” the investor
held the type of listed security that the investor is acquiring under the proposed
• unless the investor has obtained advice regarding the suitability of the investment from a
registered investment dealer, the aggregate amount invested by the investor in the last 12
months under the proposed exemption is not more than $15,000;
• an investor must be provided with certain rights of action in the event of a
misrepresentation in the issuer’s continuous disclosure record; and
• although an offering document is not required, if an issuer voluntarily provides one, an
investor will have certain rights of action in the event of a misrepresentation in it.
Investors would require suitability advice from a registered investment dealer if they wished to invest more than $15,000 per year under the exemption.
Comments on the proposal are being accepted until January 20, 2014. See Multilateral CSA Notice 45-312 for more information.
If you have any questions about this proposed prospectus exemption, please do not hesitate to Contact Us.
The preceding content is informational only and does not constitute legal or professional advice. To obtain such advice, please communicate with our offices directly.