The Ontario Securities Commission will host a series of consultation sessions to consider the review of exempt markets.
The OSC has scheduled three roundtable consultations for early February as part of the Canadian Securities Administrators’ review of a couple of the primary routes into the exempt market, the minimum amount (or $150,000) prospectus exemption, and the accredited investor prospectus exemption. Back in November, the CSA announced that it’s reviewing these key exemptions to determine whether any changes are necessary in an area which has seen numerous compliance problems in recent years, and which was also exposed by the global financial crisis.
In its original notice, the CSA noted that the minimum amount exemption could be left unchanged. It could alter the $150,000 threshold, or limit the exemption to certain investors, such as institutional investors and not individuals. Or, it could introduce alternative qualification criteria; impose other investment limitations; or repeal the exemption altogether.
In terms of the accredited investor exemption, the CSA indicated that some argue the current income and asset thresholds that define eligibility for the exemption are too low; and that income and asset thresholds are not adequate proxies for investor sophistication. As a result, it’s to consider: adjusting the income and asset thresholds; using alternative qualification criteria; limiting the exemption; or imposing other investment limitations. Or, it could decide to leave it as is.
Each of the sessions will be held at the OSC’s offices in Toronto, and they are slated for 90 minutes (between 9:00 ET and 10:30 ET). They will be held on February 2, 8 and 13. The OSC suggests attendees should include investors, both retail and institutional; investment dealers and advisors; issuers; and, market players such as legal counsel, auditors and other professional advisors.
The CSA’s formal public consultation on these exemptions is scheduled to conclude on February 29.