Effective February 11, 2015, the Ontario Securities Commission amended OSC Rule 45-501 to introduce a new prospectus exemption that allows issuers listed on the TSX, the TSXV, the CSE or the Aequitas NEO Exchange to raise capital from existing shareholders. The introduction of the existing security holder exemption in Ontario follows the introduction of a similar exemption in the rest of Canada in March of 2014 (See “New Prospectus Exemption for Distributions to Existing Security Holders” March 13, 2014)
The Ontario exemption differs from the exemption in place outside of Ontario in that the Ontario exemption is not available to investment funds. In addition, the Ontario exemption imposes a dilution limit not found in the other jurisdictions. The Ontario exemption imposes an anti-dilution provision that prohibits an issuer from making a distribution that would increase the number of listed securities by more than 100%. In addition only the Ontario exemption includes the Aequtas NEO Exchange.
