The Ontario Securities Commission has launched a review of its prospectus-exempt distribution framework, following industry calls to open the exempt market to more investors. The review will look for inspiration to this year's U.S. JOBS Act legislation on small-business capital raising, the commission said.
The regime allows small- and medium-sized businesses to issue securities without the time and expense associated with preparing a prospectus. Small issuers struggling to raise capital in the aftermath of the 2008 market crash have increasingly turned to the private exempt markets and they raise billions of dollars that way. Industry stakeholders have called on Canadian regulators to revise the exemption criteria to expand the market and improve companies' ability to raise capital.
Under Ontario's current regime, exempt distributions are only available for purchase by individuals if they are employees of the issuer or investors that meet certain financial criteria. The Ontario Securities
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