13 Key Statistics About The Use Of The Offering Memorandum Exemption In Alberta

On March 20, 2014, the Alberta Securities Commission (the ASC) published statistics about the use of the offering memorandum exemption in s. 2.9 of National Instrument 45-106 Prospectus and Registration Exemptions (the OM Exemption) for the Province of Alberta.

Unfortunately, there is no national database where all this information exists for each Canadian jurisdiction. Not every Canadian jurisdiction publishes data on the use of the OM Exemption. Regardless, the 13 key statistics below are taken directly from Annex B Background – Local Experience with OM Exemption from Multilateral CSA Notice of Publication and Request for Comment Proposed Amendments to National Instrument 45-106 Prospectus and Registration Exemptions Relating to the Offering Memorandum Exemption and in Alberta, New Brunswick and Saskatchewan, Reports of Exempt Distribution.

I did not prepare this data but found it important enough to include in this blog since many capital market participants often seek data on the use of the OM Exemption. This provides useful data, albeit Alberta-only data.

The following summarizes some of the observations by ASC staff on use of the OM Exemption in Alberta.

  1. "The OM Exemption is the second most frequently used "capital-raising" prospectus exemption in Alberta (41% of distributions in 2012 were made under the OM Exemption) although the value of the securities distributed ($0.5 billion in 2012) was 3.8% of the total.

  2. The exemption is used almost exclusively by non-reporting issuers.

  3. 77% of the 287 issuers raising money in Alberta in 2011 and 2012 under the OM Exemption were Alberta-based.

  4. In 2011 and 2012, there was approximately $824 million raised by 223 Alberta-based issuers under the OM Exemption. Approximately 155 or 70% of issuers self-reported their industry category as real estate or mortgage-investment corporations (MIC). These real estate and MIC issuers raised 76% of the total amounts raised by Alberta-based issuers under the OM Exemption.

  5. Of the purchasers under the OM Exemption in 2011 and 2012:

    90.5% were individuals; 5.9% were corporations; 1.7% were limited partnerships; and 1.6% were trusts. 6. Approximately 61% of the individual investors made at least one purchase in an amount greater than $10,000, suggesting, assuming compliance, that they qualified as "eligible investors". These purchases represented approximately 90% of the total value of purchases by individuals.

  6. Approximately 39% of the individual...

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