Provincial Regulators Propose Existing Security Holder Prospectus Exemption For TSX-Venture Issuers

Canadian securities regulators in all provinces and territories except Ontario and Newfoundland and Labrador (the "Regulators") have published for comment a proposed prospectus exemption that would permit certain TSX Venture Exchange ("TSXV") listed issuers to distribute securities to existing security holders without a prospectus (the "proposed exemption"). A copy of the Regulators' notice is available here. The prospectus exemption is being considered by the Ontario Securities Commission in the commission's suite of proposed capital raising prospectus exemption reforms (see our Cassels Brock e-LERT on this topic here).

Research conducted by the Regulators reveals that TSXV issuers generally do not use prospectus offerings or avail themselves of prospectus exemptions to distribute securities to existing non-accredited retail investors. This is because of the time and cost associated with preparing the necessary documents. As a result, retail investors are