On March 31, 2018, the new rules from the Ontario Securities
Commission (OSC) on distributions of securities outside of Canada
came into force. OSC Rule 72-503 Distributions
Outside Canada (Rule 72-503) provides clarity on a
previously opaque subject in Canadian securities law: how do market
participants comply with securities law when selling securities to
buyers that reside in other countries? In response to this
ambiguity, Rule 72-503 creates four new exemptions from the Ontario
prospectus requirement for issuers distributing securities to
buyers residing in other countries.
Background
Since its publication in 1983, Interpretation Note 1
Distributions of Securities of Ontario (Interpretation
Note) governed OSC policy on distributions outside of Canada. As a
statement of principle, the Interpretation Note allows
distributions of securities effected outside of Ontario without
triggering Ontario's prospectus requirement where
"reasonable steps are taken by the
