OSC launches self-certified investor prospectus exemption pilot

TORONTO – The Ontario Securities Commission (OSC) today announced an 18-month pilot that provides a prospectus exemption that gives Ontario investors with qualifying education or work experience access to increased investment opportunities. The exemption also gives businesses headquartered in Ontario access to a new source of capital.

In Ontario, most of the capital raised from individuals under prospectus exemptions is raised using the accredited investor exemption. While many investors have the proficiency, through education or relevant industry experience, to understand the risks and rewards of investing without a prospectus, some do not meet the accredited investor financial criteria. Additionally, they may not meet the criteria for other prospectus exemptions, such as the employee prospectus exemption.

“This pilot recognizes that there is a growing pool of sophisticated retail investors in Ontario, whose education and work experience have aptly prepared them to assess investment risks,” said Grant Vingoe, CEO of the OSC. “It also reflects the reality that many Ontarians have multiple freelance roles during their careers in which they utilize and develop specialized skills that can support their investment activities.”

To make use of this prospectus exemption, investors must certify that they have met at least one qualifying criteria and review and complete a risk acknowledgment form confirming they understand the risks of investing. Investors will also be subject to a $30,000 annual limit on all purchases and can choose to allocate that amount to one or multiple issuers. 

Issuers must report the use of the self-certified prospectus exemption by filing reports of exempt distribution. The OSC will use this data to monitor the use of the prospectus exemption and to inform future policymaking.

The prospectus exemption is set out in an interim class order on the OSC’s website.

The mandate of the OSC is to provide protection to investors from unfair, improper, or fraudulent practices, to foster fair, efficient, and competitive capital markets and confidence in the capital markets, to foster capital formation, and to contribute to the stability of the financial system and the reduction of systemic risk. Investors are urged to check the registration of any persons or company offering an investment opportunity and to review the OSC investor materials available at http://www.osc.ca.

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