In May, the Ontario Securities Commission (OSC) announced a set of initiatives it is testing to support early-stage capital raising for Ontario businesses. The initiatives include an extension of Ontario Instrument 45-507 Self-Certified Investor Prospectus Exemption (Interim Class Order) (the Self-Certified Investor Prospectus Exemption), which permits Ontario investors who may not meet the accredited investor financial criteria, but have qualifying education or work experience, to invest in private Ontario businesses.
Individuals admitted to practice law in a jurisdiction of Canada where at least 1/3 of their practice has involved providing advice in respect of financings involving private or public distributions of securities or mergers and acquisition transactions, qualify as investors under the Self-Certified Investor Prospectus Exemption.
To make use of the Self-Certified Investor Prospectus Exemption, investors must provide the issuer with a confirmation that they meet at least one qualifying criterion, and a risk acknowledgment form confirming they understand the risks of investing. Investors are subject to a $30,000 annual limit on all purchases and can choose to allocate that amount to one or multiple issuers.
The Self-Certified Investor Prospectus Exemption is part of a broader set of initiatives to improve access to early-stage capital for Ontario businesses while maintaining appropriate investor protections. You can learn more about the OSC initiatives here: OSC TestLab: Early-stage Capital and Resources for Investors.
You can also share ideas or feedback with the OSC on capital raising for startups and small to medium-sized businesses in Ontario here: OSC IdeaHub.
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