Canada's Exempt Market – Growing, Growing, Growing

Despite a small dip in 2020, the OSC's recently published Exempt Market Report shows that the Ontario exempt market continues to expand, with increases to both the number of issuers raising prospectus exempt capital and the amount of capital raised.

Takeaways

• The accredited investor exemption remains the most popular tool for Ontario investors to access the exempt market, with 97 per cent of the gross proceeds being raised under, and 9/10 issuers relying on, this exemption; however, we expect that the new "listed issuer financing exemption" will add significant exempt market capital in 2023.
• The majority of the approximately $175 billion invested by Ontario investors in 2021 came from institutional investors (97.8 per cent) and went to issuers headquartered outside of Canada (70 per cent). Moving forward, retail participation in the exempt market may increase given the recent popularity of new exemptions available to individual and institutional investors.