February 27, 2015
On February 19, 2015, the Ontario Securities Commission (OSC) and the Canadian Securities Administrators (CSA) each announced amendments to the rules governing prospectus exempt distributions.
Family, Friends and Business Associates Prospectus Exemption
The OSC published a family, friends and business associates prospectus exemption (the Exemption) in an effort to provide a cost-effective way for issuers (other than investment funds) to raise capital from their networks of family, close personal friends and close business associates.
The Exemption is largely harmonized with an exemption that is currently available in other Canadian jurisdictions, and allows for the sale of securities by a selling security holder or an issuer to principals of the issuer as well as certain family members, close personal friends and close business associates.
With the introduction of the Exemption, the OSC is repealing the existing founder, control person and family...
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