The Ontario Securities Commission (“OSC”) recently announced certain amendments to the dealer registration exemptions for not-for-profit angel investor groups and eligible early-stage businesses that had been developed to support capital raising in Ontario through the OSC TestLab program.
Background
As we discussed in a previous post, in May 2024 the OSC announced three time-limited exemptions designed to support capital raising for early-stage businesses in Ontario. These include exemptions from the dealer registration requirement for not-for-profit angel investor groups that meet certain conditions under Ontario Instrument 32-508 Not-for-Profit Angel Investor Group Registration Exemption (Interim Class Order) (“OI 32-508”) and eligible early-stage businesses under Ontario Instrument 32-509 Early-Stage Business Registration Exemption (Interim Class Order) (“OI 32-509”). In addition, Ontario Instrument 45-509 Report of Distributions under the Self-Certified Investor Prospectus Exemption (Interim Class Order) introduced an exemption from the requirement to file a report of exempt distribution on Form 45-106F1 Report of Exempt Distribution within 10 days of a distribution for businesses that raise capital under the self-certified investor prospectus exemption, provided that distributions are reported on a quarterly basis using Form 45-509F1 Alternative Report of Exempt Distribution.
Variation Orders
As a result of market feedback and data that the OSC collected on the use of these exemptions, the OSC has issued variation orders to OI 32-508 and OI 32-509 (the “Variation Orders”).
The OI 32-508 Variation Order: (i) expands the scope of the exemption to permit angel investor groups to support early-stage businesses in any jurisdiction of Canada, rather than in Ontario alone; (ii) permits angel investor groups to refer early-stage businesses to other angel investor groups; (iii) removes the requirement for angel investor groups to provide the OSC with information relating to early-stage businesses introduced to and funded by members of the angel investor group and the number of investments exited; and (iv) removes the reference to Ontario Instrument 45-507 Self-Certified Investor Prospectus Exemption (Interim Class Order) (“OI 45-507”) from the definition of “self-certified investor”.
The OI 32-509 Variation Order also removes the reference to OI 45-507 from the definition of “self-certified investor” and replaces references to “reporting period” with “calendar quarter”.
The Variation Orders came into effect on June 17, 2025, and OI 32-508 and OI 32-509, as varied, will remain in effect until October 25, 2025, unless extended by the OSC.
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