OSC publishes report on exempt market activity

TORONTO – The Ontario Securities Commission (OSC) today published Ontario Exempt Market Report 2018, which outlines capital raising activity by corporate (non-investment fund) issuers in Ontario’s exempt market during 2017. The report also provides a snapshot of key trends, particularly with respect to investors and issuers.

“The exempt market continues to be an important component of Ontario’s capital market,” said Paul Redman, Chief Economist at the OSC. “Capital raising in the exempt market has grown significantly, increasing 27 per cent in 2017 to $92 billion.”

Institutional investors account for approximately $89.4 billion (or 98%) while individual investors contributed $2.2 billion (or 2%) of the total capital invested in Ontario’s exempt market.

The report revealed increased activity in Ontario’s exempt market, especially among Canadian issuers and small businesses. In 2017, approximately $37.6 billion was raised from Ontario investors by about 1,890 Canadian issuers. Approximately 37% of Canadian issuers that participated in Ontario’s exempt market were small issuers with under $5 million in assets and having raised less than $1 million.

The report also found that, collectively, prospectus exemptions introduced since 2015 have continued to gain traction among issuers and investors. Total capital raised under the offering memorandum and family, friends and business associates exemptions doubled in the last year to $327 million.

The findings highlighted in this report will help the OSC in its ongoing efforts to monitor the effectiveness of the exempt market regime and oversee this growing market.

The mandate of the OSC is to provide protection to investors from unfair, improper or fraudulent practices, to foster fair and efficient capital markets and confidence in the capital markets, and to contribute to the stability of the financial system and the reduction of systemic risk. Investors are urged to check the registration of any persons or company offering an investment opportunity and to review the OSC investor materials available at www.osc.ca.

 

-30-