OSC Provides Update on Capital Raising Initiatives

December has just arrived and the year is almost over. Many capital market participants are waiting for the Ontario Securities Commission (the OSC) to publish a draft of the proposed prospectus exemptions it is considering as previously published on August 28, 2013 (See OSC Notice 45-712 Progress Report on Review of Prospectus Exemptions to Facilitate Capital Raising). The proposed capital raising exemptions are:

• the offering memorandum exemption;

• the family, friends and business associates exemption;

• the existing security holder exemption; and

• the crowdfunding exemption, together with a registration framework for online funding portals,

(the Capital Raising Proposals).

Unfortunately, there will be no present under the Christmas tree this year for those waiting these long anticipated Capital Raising Proposals.

The OSC announced today that it intends to publish its Capital Raising Proposals in the first quarter of 2014 for a 90-day public comment period.

Many were anticipating that the OSC would publish its Capital Raising Proposals before Christmas since it was in August of this year that the OSC published its progress report.  With the current funding gap faced by many public and private issuers, there is an urgency to have the Capital Raising Proposals finalized as soon as possible.

Hopefully, the Capital Raising Proposals will be published in early, as opposed to late, Q1.  I will keep you posted.

Update on CSA proposal regarding distributions to existing securityholders

The OSC press release also stated that Ontario is not a party to Multilateral CSA Notice 45-312 Proposed Prospectus Exemption for Distributions to Existing Security Holders (the CSA proposal) since it is considering its own form of exemption and whether such an exemption should be available to issuers listed on other exchanges (e.g., the CNSX). The OSC stated: (a) it supports the CSA proposal and would like to achieve substantial harmonization; and (b) asked those submitting comment letters to also submit them to the OSC. The comment period on the CSA proposal closes on January 20, 2014.

A copy of the OSC press release can be found here.