OSC Rule 41-503: prospectus and disclosure requirements eased

Investment dealers get a break too. During the “waiting period” between a preliminary prospectus and the final version, dealers can now share pricing details – price, dollar amounts raised, post-offering ownership – in a standard term sheet, as long as the issuer has already put that same pricing information out in a news release. The same goes for marketing materials, with one extra perk: dealers can drop in comparables without tripping the disclosure rule, so long as the pricing was pre-released and everything else still lines up with the preliminary prospectus.

There’s also a fix for a small but persistent headache: the promoter’s certificate. Under the old rules, a promoter sometimes had to sign twice – once as a promoter, once in whatever other role they held. Now, if that person already certifies the prospectus in another capacity, they can skip the separate promoter signature. A related exemption applies to companies that have been reporting issuers in Canada for at least two years, as long as the deal isn’t for asset-backed securities and the promoter isn’t a control person, director or officer at the time of filing.

For wealth and fund management firms working the distribution side of a deal, it adds up to a few fewer forms between a pitch and a prospectus.

The full text of OSC Rule 41-503 Exemptions from Certain Prospectus and Disclosure Requirements is available at https://www.osc.ca/en/securities-law/instruments-rules-policies/4/41-503/osc-rule-41-503-exemptions-certain-prospectus-and-disclosure-requirements.