OSC Introduces Self-Certified Investor Prospectus Exemption
Overview
The Ontario Securities Commission (OSC) has adopted a new prospectus exemption (the “Self-Certified Investor Prospectus Exemption”) applicable to prospective investors that meet certain proficiency requirements but may not meet the financial thresholds required to invest through the “accredited investor exemption” (referred to as “Self-Certified Investors”). The Self-Certified Investor Prospectus Exemption is being made available pursuant to Ontario Instrument 45-507 – Self-Certified Investor Prospectus Exemption (Interim Class Order) (the “Interim Order”). The exemption is similar to exemptions adopted in Alberta and Saskatchewan in March 2021.
The Interim Order came into effect on October 25, 2022 and expires on April 25, 2024, subject to extension or permanent adoption.
Self-Certified Investor Prospectus Exemption
Under the Self-Certified Prospectus Exemption, non-investment fund issuers with a head office in Ontario may conduct sales of securities to Self-Certified Investors. An issuer relying on the exemption does not have to be a reporting issuer under Canadian securities laws and the exemption will be available to private issuers raising capital. Self-Certified Investors are generally individuals who:
- hold certain designations or credentials (such as Chartered Financial Analyst);
- hold certain degrees (such as a Masters of Business Administration with a focus on finance or undergraduate degree in finance);
- have passed certain courses or exams (such as the Canadian Securities Course or Exempt Market Products Exam); or
- have management, policy-making, engineering, product or other relevant operational experience at a business that operates in the same industry or sector as the issuer and who, as a result of this experience, are able to adequately assess and understand the risk of investment in the issuer.
The maximum amount that a Self-Certified Investor (and any permitted designate) is permitted to invest is $30,000 per calendar year.
Issuers relying on the Self-Certified Investor Prospectus Exemption are required to file a completed Form 45-106F1 Report of Exempt Distribution (an existing requirement for other prospectus exemptions) and a “Confirmation of Qualifying Criteria” completed by the Self-Certified Investor, confirming they meet one or more of the criteria identified in the Interim Order (similar to the confirmation already required for accredited investors). Additionally, the Self-Certified Investor must provide a detailed risk acknowledgement statement.
The Self-Certified Prospectus Exemption should be a positive addition to the Ontario exempt distribution market, enhancing the ability of issuers to raise capital while at the same time providing qualified investors with increased access to investment opportunities.
To discuss the Self-Certified Investor Prospectus Exemption or for any further information, please contact any member of our Capital Markets Group.
Expertise
Authors
Insights
-
REITS and Income Securities
The Legal Industry Reviews Edition 8 - REITs Chapter
Bill Gorman, Brenda Gosselin, and Stephen Pincus have co-authored The Canadian REIT Structure in the eighth edition of The Legal Industry Reviews Canada.To view the… -
Capital Markets
Canadian Securities Regulators Announce New Measures to Promote Competitiveness of Canada’s Capital Markets
In response to ongoing uncertainty in global capital markets, the Canadian Securities Administrators (CSA) recently published three coordinated blanket orders (the “Blanket Orders”) intended to reduce… -
Capital Markets
Canada’s stock market is broken and we must fix it, The Globe and Mail
In an article published in the The Globe and Mail, co-authors Stephen Pincus and Brad Ross share their insights on revitalizing Canada’s capital markets.“The trade war with the U.S. has drawn… -
Banking and Financial Services
Canadian Securities Regulators Publish Temporary Exemptions For Derivatives Data Reporting Requirements
On February 20, 2025, the Canadian Securities Administrators (CSA) introduced temporary exemptions from certain derivative data reporting requirements relating to unique product identifiers for… -
REITS and Income Securities
The Legal Industry Reviews Edition 7 - REITs Chapter
Stephen Pincus, Brenda Gosselin, and Bill Gorman have co-authored The Canadian REIT Structure in the seventh edition of The Legal Industry Reviews Canada.To view the… -
Capital Markets
Proxy Advisors Update Canadian Voting Guidelines for 2025
In late 2024, Institutional Shareholder Services (ISS) and Glass Lewis, two leading North American proxy advisory firms, updated their benchmark proxy voting guidelines ahead of the 2025 proxy season…
Featured Work
-
Mergers and Acquisitions
Onex to sell WestJet stakes to Delta and Korean Air
Goodmans LLP is advising WestJet Airlines Ltd. and its controlling shareholder, Onex Corporation, in the sale of Onex’s minority stakes in WestJet to Delta Air Lines and Korean Air… -
Capital Markets
Zodiac Gold closes non-brokered private placement
Goodmans LLP advised Zodiac Gold Inc. in connection with the closing of the second and final tranche of its non-brokered private placement… -
Capital Markets
Brookfield announces offering of First Mortgage Bonds for Bay Adelaide Centre East and West
Goodmans LLP advised CIBC Capital Markets, as Structuring Agent and Lead Left Joint Bookrunner, for Brookfield on its $433.2 million offering of First Mortgage Bonds for Bay Adelaide Centre East and… -
REITS and Income Securities
BSR REIT completes strategic asset sale with Avalon Bay Communities Inc.
Goodmans LLP advised BSR REIT in connection with the sale of an aggregate of nine properties, consisting of 2,701 apartment units, to AvalonBay Communities, Inc. for gross consideration valued at… -
Mining
Paulson and NOVAGOLD RESOURCES INC. to acquire Barrick Gold Corp.’s 50% stake in Donlin Gold LLC for US$1 billion
Goodmans LLP is advising Paulson & Co Inc. in connection with a backstop financing commitment entered into as part of its agreement to jointly acquire with NOVAGOLD RESOURCES INC. a 50% interest… -
REITS and Income Securities
NexPoint Hospitality Trust acquired by NexPoint Diversified Real Estate Trust
Goodmans LLP advised NexPoint Hospitality Trust in connection with its going private transaction with NexPoint Diversified Real Estate Trust…
News & Events
-
Banking and Financial Services
Goodmans Lawyers Once Again Recognized in the Lexpert Special Editions: Finance 2025 and Mergers and Acquisitions 2025
We are proud to announce the Lexpert Special Editions: Finance 2025 and Mergers and Acquisitions 2025 once again feature Goodmans lawyers among Canada's experts.Congratulations to… -
Aging and Health Care
The Canadian Legal Lexpert Directory 2025 Once Again Recognizes Goodmans
We are proud to announce Goodmans LLP continues to be recognized in the 2025 edition of The Canadian Legal Lexpert Directory.Congratulations to the 96 Goodmans lawyers recognized as leaders across… -
Banking and Financial Services
Chambers and Partners Once Again Honours Goodmans with Global Recognition
We are proud to announce Goodmans LLP continues to receive top-tier recognition from Chambers and Partners in the Chambers Global 2025 Guide released today.Recognition from Chambers and Partners is…