As of July 1, 2016, a new subsection came into force in the Securities Act (Ontario) (the Act) prohibiting a person in a “special relationship” with an issuer, with knowledge of material non-public information (MNPI), from recommending or encouraging a trade in that issuer’s securities. The new subsection 3.1 reads as follows: Recommendation (3.1) No…
On July 26, 2016, the Alberta Securities Commission (ASC) adopted ASC Rule 45-517 Prospectus Exemption for Start-Up Businesses. This Rule permits Alberta issuers to raise funds from Alberta investors through an online funding portal that is a registered dealer, a registered dealer, or the network of contacts of the issuer’s principals. The main conditions of…
The Financial Post recently published an article called, “Stock exchange cracks down after stream of ‘shell’ companies make it to market” by Barbara Shecter and Peter Koven. This is a follow-up article to their previous one published in February 2016 called, “Caught in a web of spinoffs: Inside Canada’s expanding universe of ‘shell’ companies”. Shell…
The following article was published in the Globe and Mail on January 18, 2016. It discusses the BC Securities Commission’s computer program that it introduced in 2014 to read regulatory filings. This program uses a computerized “predictive risk model” to find companies that sell securities to unqualified people in the exempt market. According to the…
Ontario is expected to adopt the offering memorandum (OM) exemption on January 13, 2016. Alberta, Saskatchewan, Quebec, New Brunswick and Nova Scotia (together with Ontario, the Participating Jurisdictions) are amending their existing OM exemptions so that they are substantially harmonized with Ontario’s OM exemption. The other Participating Jurisdictions expect to adopt their amendments on April…
The OSC published its Exempt Market Review on November 5, 2015. This review provides an overview of exempt market activity in Ontario in 2014, including the following statistics: Non-investment fund issuers raised approximately $41 billion through prospectus-exempt distributions in Ontario from approximately 22,000 purchases made by Ontario residents. The accredited investor exemption was the most…
The Ontario Securities Commission (OSC) is now posting summaries of reported exempt distributions on its website and will do so regularly. The summaries are based on information contained in reports of exempt distribution (Form 45-106F1) indicating Ontario purchasers. The summaries include the following information about the distribution: • the submission date of the report; •…
On March 31, 2015, the Ontario Securities Commission (OSC) issued an Order approving a settlement agreement between OSC staff and Anand Hariharan (Hariharan) who traded in securities of a non-reporting issuer while in possession of material non-public information (MNPI). Background Hariharan’s close childhood friend, Satish Talawdekar (Talawdekar) was a manager in the IT department of…
The Government of Canada proclaimed the Extractive Sector Transparency Measures Act, S.C. 2014, c. 39, s. 376 (the “Act”) into force on June 1 2015. Section 6 sets out the purpose of this Act as follows: 6. The purpose of this Act is to implement Canada’s international commitments to participate in the fight against corruption…
An avid racetrack fan decides that she would like to own her own race horses, but the problem is she doesn’t have enough money to pay for their training and boarding as well as all of the entrance fees. As she contemplates how to fulfill her dream of owning horses, it strikes her that if…