On October 5, 2020 the Financial Services Regulatory Authority of Ontario (FSRA) announced that it is developing proposed guidance – Interpretation and Approach guidance that identifies higher risk offerings and sets out enhanced disclosures by co-operative corporations (co-ops) that are raising capital.

The Co-operative Corporations Act (CCA) requires that co-ops provide “full, true and plain disclosure” in their offering statements. This protects investors and helps them make informed investment decisions.

The proposed guidance will set out specific risk factors and information that co-ops must disclose when issuing securities to comply with FSRA’s interpretation of the requirements under the CCA. This non-exhaustive list includes debt repayment details, insolvency rankings and financial obligations. Potential investors will better understand the related risks before deciding whether to purchase these securities. The proposed guidance will apply to high-risk offerings by co-ops.

The proposed guidance if out for comments until November 18, 2020.

For a copy of the update, click here.

For more information, please call Barbara Hendrickson at BAX Securities Law (647) 403-4606.

This publication is not intended to constitute legal advice. No one should act on it or refrain from acting on it without consulting with a lawyer. BAX does not warrant or guarantee the accuracy or currency or completeness of the publication. No part of this publication may be reproduced without the prior written permission of BAX Securities Law.