Offering Memorandum Exemption
An Offering Memorandum (OM) is a document that provides information about an entity and the securities offered under the prospectus exemption under New Brunswick securities laws. It is a complex legal document that gives rise to significant legal obligations on the part of the issuer, as well as any individual agent who certifies the document on behalf of the issuer.
Because it is an important legal document, we recommend consulting with an experienced securities lawyer who has a thorough understanding of the business of the issuer.
The prospectus exemption can be used by an issuer to:
- raise money for a community venture
- raise money to finance the development of an existing business
- raise money for operations
- finance a new project
There are two types of offering memoranda specified under the prospectus exemption. To determine which type to use, please refer to National Instrument 45-106 Prospectus Exemptions.
The OM and supporting financial statements must be given to each potential investor. To facilitate capital raising, we published Blanket Order 45-507 In the Matter of Exemptions from Certain Financial Statement Requirements of Form 45-106F2 Offering Memorandum for Non-Qualifying Issuers.
This relief allows certain issuers relying on the prospectus exemption to be exempt from the requirement to obtain an audit on financial statements or other financial information.
In addition, Blanket Order 52-502 In the Matter of an Exemption from the Requirement to Include Financial Statements Prepared in Accordance with Canadian GAAP Applicable to Publicly Accountable Enterprises in Form 45-106F2 Offering Memorandum for Non-Qualifying Issuers, provides relief from the requirement for financial statements to be prepared in accordance with using Canadian GAAP applicable to publicly accountable enterprises (IFRS). Issuers may use Canadian GAAP for private enterprises.
New Brunswick-based issuers may voluntarily pre-file a draft OM with FCNB pursuant to Local Staff Notice 45-701 Voluntary Pre-Filing of Draft Offering Memoranda under NI 45-106. The scope of FCNB staff’s participation and what an issuer can expect when pre-filing a draft OM are set out in the local staff notice.
Prior to filing an OM with FCNB, issuers should ensure that they have reviewed Multilateral CSA Staff Notice 45-309 Guidance for Preparing and Filing an Offering Memorandum. The staff notice provides guidance to issuers that intend to rely on the prospectus exemption and also summarizes the common deficiencies staff have observed in offering memoranda prepared in accordance with Form 45-106F2 Offering Memorandum for Non-Qualifying Issuers.
Please refer to our Guide to Offering Memorandum Exemption for more information.