On October 29, 2015, certain members of the Canadian Securities Administrators (CSA) announced that amendments would be made to National Instrument 45-106 Prospectus Exemptions to bring into force an offering memorandum prospectus exemption (the OM Exemption) in Ontario and to amend the OM Exemption in section 2.9 of NI 45-106 in Alberta, New Brunswick, Nova Scotia, Quebec and Saskatchewan.  The OM Exemption is expected to come into force in Ontario on January 13, 2016 and the amendments in the other provinces are expected to come into force on April 30, 2016.

The OM Exemption in Ontario will be broadly harmonized with the amended OM Exemption in the other participating jurisdictions: Alberta, New Brunswick, Nova Scotia, Quebec and Saskatchewan.  Prior to the amendments, Ontario was the only jurisdiction in Canada not to have an OM Exemption.  As a result of the amendments, the OM Exemption is expected to be available in every jurisdiction in Canada. 

In these provinces, the OM Exemption will feature several new investor protection mechanisms, according to the CSA.  Notably, investment limits will be imposed that range from $10,000 to $100,000 based on the acquisition cost of securities purchased over the preceding 12 months.  However, these investment limits do not apply to accredited investors, among others.  In addition, the required Risk Acknowledgement Form that investors must complete will have two additional schedules that must be completed by investors who are individuals.  Additional requirements will apply in respect of audited financial statement disclosure and marketing materials.

Importantly, the OM Exemption cannot be used to distribute specified derivatives or structured finance products.  In addition, in Alberta, Nova Scotia and Saskatchewan, the OM Exemption will continue to be available to investment funds only if they are non-redeemable investment funds or mutual funds that are reporting issuers.  The OM Exemption is not available to investment funds in New Brunswick, Ontario and Quebec.

For details, please consult the Multilateral CSA Notice of Amendments to NI 45-106.