On December 7, 2020 the Ontario Securities Commission (OSC) announced that they are making amendments to OSC Rule 45- 501 Ontario Prospectus and Registration Exemptions (OSC Rule 45-501) relating to syndicated mortgages (the Amendments). The Amendments were originally published for comment on March 15, 2019 (2019 Proposal) and revised proposals were published for a second comment period on August 6, 2020 (2020 Proposal). In the same notice as the 2020 Proposal, the Canadian Securities Administrators (the CSA) published final amendments and changes (CSA Amendments) to:
- National Instrument 45-106 Prospectus Exemptions and National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations; and
- Companion Policy 45-106CP Prospectus Exemptions and Companion Policy 31-103CP Registration Requirements, Exemptions and Ongoing Registrant Obligations.
The purpose of the Amendments and the CSA Amendments is to introduce additional investor protections related to the distribution of syndicated mortgages and to increase harmonization regarding the regulatory framework for syndicated mortgages across all CSA jurisdictions. In Ontario, this will result in the transfer of primary oversight of syndicated mortgages other than qualified syndicated mortgages and syndicated mortgages distributed to permitted clients from the Financial Services Regulatory Authority of Ontario (FSRA) to the OSC.
The Amendments, the CSA Amendments and other required materials were delivered to the Minister of Finance on December 7, 2020. If the Minister approves the Amendments, the Amendments and the CSA Amendments will come into force in Ontario on the later of March 1, 2021 and the date that the amendments to the Securities Act (Ontario) that repeal subsections 35(4) and 73.2(3) are proclaimed in force.
According to the notice, there will be no change from the current regime respect to the exemptions for qualified syndicated mortgages or syndicated mortgages sold to permitted clients as a result of the Amendments. FRSA will continue to exercise primary oversight of the distribution of qualified syndicated mortgages and syndicated mortgage transactions that involve only institutional or high-net-worth investors that fall within the definition of a permitted client.
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.
