The Ontario Securities Commission (OSC) has published new guidance meant to encourage firms’ compliance with the requirements to file exempt distribution reports.
In a new staff notice, the OSC says it aims to remind issuers, underwriters, and their advisors of: the importance of filing reports, and the required filing fees on time, and, recent changes to those fees. It notes that issuers, including investment funds, and underwriters are required to report exempt distributions made under certain prospectus exemptions, including the accredited investor exemption and the minimum investment exemption.
The OSC indicates that these reports are its primary source of information about activity in the exempt market.
“This information provides us with a more comprehensive understanding of activity in the exempt market, helps us to effectively oversee that market, and informs any future changes we may recommend to the exempt market regulatory regime,” it says.
Last month, it finalized a rule, which is scheduled to take effect on February 19, 2014, that will require electronic filing of certain documents, including exempt distribution reports.
The guidance also notes that a $500 activity fee is now required to be paid with each report that’s filed; all issuers (reporting and non-reporting) are subject to late fees; and, late fees of $100 per day, up to a maximum of $5,000 per year, now apply to reports, including exempt distribution reports, in addition to any other late fees that may be charged.