For the first time since 2014, the Ontario Securities Commission (OSC) will send Ontario registrants a risk assessment questionnaire (RAQ) that must be completed by portfolio managers, investment fund managers, exempt market dealers, restricted portfolio managers and restricted dealers registered in Ontario. Registrants will receive the 2016 RAQ tomorrow, May 18.
The OSC uses data gathered through the RAQ to apply a risk ranking to firms. Firms with higher risk rankings are more likely to be targeted by the OSC for compliance reviews. As a result, it is important that the RAQ answers be considered carefully.
The 2016 RAQ will be similar to the 2014 version, but will also include questions intended to assess how registrants, issuers and portals are using newly developed capital-raising prospectus exemptions such as the crowdfunding exemption, offering memorandum exemption and the modernized prospectus-exempt rights offering regime. As we recently reported, the OSC is increasing oversight of market participants who rely on these newly expanded capital-raising exemptions in Ontario and the 2016 RAQ is a key element of this heightened regulatory scrutiny of the exempt market.
Registrants must complete and submit the RAQ online by June 29, 2016.