More To Offer: Recent Changes To The Offering Memorandum Exemption In Canada

National Instrument 45-106 Prospectus Exemptions ("NI 45-106") provides that certain distributions of securities completed pursuant to an offering memorandum ("OM") are exempt from the general requirement that all distributions of securities be done pursuant to a prospectus. An OM, like a prospectus, constitutes a disclosure document related to a particular distribution of securities. This article provides an overview of OM offerings and compares the requirements of the OM exemption throughout various Canadian jurisdictions in light of certain recent amendments.

History of the Offering Memorandum Exemption Throughout Canada

Historically, there has been a perceived funding gap for small- and medium-sized enterprises that could not afford the high fixed costs of preparing a prospectus, but needed more capital than that available under current prospectus exemptions. The OM exemption was thereby created to permit distributions to a wide variety of potential investors