The Ontario Securities Commission (OSC) recently published OSC Consultation Paper 81-737 Opportunity to Improve Retail Investor Access to Long-Term Assets through Investment Fund Product Structures (The Consultation Paper).
The Consultation Paper sets out a framework proposal (the Proposal) to facilitate investment opportunities in long-term illiquid assets, which will be referred to as Long-Term Assets, through an investment fund product structure.
The purpose of the Proposal is to enhance the experience of individual investors and to foster conditions for capital formation and innovation in both public and private markets. The Proposal offers potential benefits to investors and businesses, and could lead to increased investment in capital-intensive assets, such as infrastructure, natural resource projects, and other long-term interests.
“Long-Term Assets” fall within the definition of “illiquid assets” in section 1.1 of National Instrument 81-102 Investment Funds (NI 81-102) are illiquid assets that cannot be readily disposed of, may be difficult to value, and generally have longer investment time horizons than other assets. They include venture capital, private equity, private debt, mortgages, real estate, infrastructure, and natural resource projects. While this would include capital-intensive assets in Ontario, we do not propose to limit our Proposal to assets that are located within Ontario.
The OSC is publishing the Consultation Paper to seek feedback from stakeholders to identify the key success factors, as well as areas of concern with the Proposal. Stakeholder feedback will be considered in the next phase, when the regulator anticipates publishing the proposed rule amendments for comment.
OSC Consultation Paper 81-737 Opportunity to Improve Retail Investor Access to Long-Term Assets through Investment Fund Product Structures is available for download from the website of the Ontario Securities Commission.
For more information, please call Barbara Hendrickson at BAX Securities Law (647) 403-4606.
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