On October 8, 2025, the Ontario Securities Commission (OSC) announced recent steps to further transparency and compliance in the exempt market. The exempt market is a segment of the Canadian capital markets where securities are bought and sold without the protections typically associated with a prospectus.
The OSC described these steps as an effort to enhance awareness of its requirements, monitor the use of the offering memorandum prospectus exemption (the OM Exemption) under section 2.9 of National Instrument 45-106 – Prospectus Exemptions (NI 45-106), and increase transparency for retail investors participating in the exempt market.
The announcement outlined two concrete measures being implemented by the OSC:
Annual Financial Statement Non-Delivery List
The OSC’s Corporate Finance Division will introduce a public list of non-reporting issuers in Ontario that have relied on the OM Exemption but failed to deliver the required annual financial statements for one or both of their two most recently completed financial years. This will also include non-reporting issuers whose filings are not accompanied by a notice disclosing the issuer’s use of the proceeds raised under the OM Exemption, in accordance with Form 45-106F16.
Non-reporting issuers will be placed on the list no earlier than 30 days after the prescribed deadline under subsection 2.9(17.5) of NI 45-106. After delivering the outstanding financial statements to the OSC and remitting the applicable fee, a listed issuer will be removed from the list as soon as practicable.
Compliance Examinations of Exempt Market Dealers (EMDs)
The OSC’s Registration, Investigation and Examinations Division will examine EMDs involved in the distribution of securities issued by non-reporting issuers that have not submitted their required annual financial statements. These examinations will assess the know-your-product practices of registrants distributing such securities.
Implications for Market Participants
Non-reporting issuers in Ontario should ensure their reporting obligations with the OSC are up to date. EMDs should also evaluate how their current practices align with their regulatory responsibilities.
For more information on how these measures may impact you or your organization, we encourage you to reach out to members of our Capital Markets Group.