Notice and Request for Comment –Proposed Rule 45-501 and Proposed Companion Policy 45-501CP –Statutory Liability for Misrepresentations in an Offering Memorandum under Certain Exemptions from the Prospectus Requirement (the “Proposed Rule”)
The CAC believes in the importance of harmonizing regulations that impact investor protection. To that end, we support the intent behind the Proposed Rule, which we understand is to better match the circumstances in which the statutory rights of action will apply to those of other jurisdictions. We thus agree with the proposals to provide that the rights will apply only with respect to the specified list of prospectus exemptions, and not with respect to the use of an offering memorandum with any prospect us exemption as is currently the case and which has broader application than elsewhere in Canada.
Overview of the Council’s Comments:
The CSA we support efforts to modernize securities legislation and rules in Ontario and were pleased to see that a number of recommendations made by the Taskforce have been addressed. While we appreciate the platform approach taken by the Consultation Draft and the myriad proposals embedded in the draft Act, we believe that additional investor-friendly defining principles for the Act, such as an expanded legislative best interest standard to registrants with discretionary authority over client assets, would make the proposed Act worth the immense prospective effort of implementation for capital markets participants, investors, and regulators