Investment Funds


Exempt Distributions


Generally, securities distributed to the public must be offered under a prospectus and sold by registered dealers. In certain cases, investment funds can issue securities in reliance on an exemption from the registration or prospectus requirements. Distributions made under such circumstances are known as private placements, or exempt distributions. For example, registration and prospectus exemptions are available for investment funds that, subject to certain conditions, distribute securities pursuant to a reinvestment of distributions. 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).

For more information on registration exemptions, see 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, an investment fund 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 relied on and other factors.

For more information about registration and prospectus exemptions:

For more information about resale restrictions see: