Companies
Private Placements
In certain cases, companies can issue securities in reliance on an exemption from the registration or prospectus requirements. For example, registration and prospectus exemptions are available for companies that, subject to certain conditions, distribute securities to “accredited investors” or their own employees, or in connection with a business combination or reorganization. The majority of prospectus exemptions are set out in National Instrument 45-106 Prospectus and Registration Exemptions. Exemptions available in Ontario only are contained in OSC Rule 45-501 Ontario Prospectus and Registration Exemptions and other rules and regulations under the Securities Act (Ontario).Distributions made under such circumstances are known as private placements, or exempt distributions. However, changes to the registration and prospectus exemption regimes in Ontario are expected to come into force shortly. For more information on the proposed registration regime see "New Registration Regime" under "Information for Dealers, Advisers and Investment Fund Managers".
Certain exempt distributions may have to be reported to the OSC under a report of exempt distribution, such as Form 45-106F1 or Form 45-501F1. For example, a company must file this report if it distributes its securities to accredited investors.
Securities initially sold under a prospectus exemption may be subject to restrictions the first time they are resold, such as a requirement to hold the securities for a specified period of time. The resale restrictions imposed depend on the prospectus exemption originally relied on and other factors.
For more information about registration and prospectus exemptions:
- National Instrument 45-106 Prospectus and Registration Exemptions
- CSA Staff Notice 45-304 Notice of Local Exemptions Related to NI 45-106
- OSC Rule 45-501 Ontario Prospectus and Registration Exemptions
