The Saskatchewan Financial Services Commission (SFSC) has issued a notice inviting issuers that intend to make use of the offering memorandum exemption to submit a draft of the documents they intend to use, thereby ensuring they are complying with their obligations.

The SFSC reports that its’ reviews of a sample of OMs identified material disclosure deficiencies in all of the filings it reviewed. “In general, the OMs were poorly prepared and did not provide the disclosure required,” it reports.

And, it suggests that issuers aren’t getting any better at it. “During the period that we reviewed the OMs, we observed no noticeable improvement in the quality of disclosure provided by first time users of the Offering Memorandum Exemption,” it says, adding, that it did observe significant improvement in subsequent OMs filed by those subjected to a review.

Failing to comply with the OM disclosure requirements can lead to being forced to suspend the offering, provide remedial information to investors, and refunding investors money. It reports having imposed these requirements on some issuers because of major deficiencies in the OMs that they filed.

To avoid these consequences, issuers who intend to use the exemption may file a draft OM, which SFSC staff will review and provide comments on.