Prospectus/Distribution Process – Securities Regulation

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• 1. Prospectus/ Distribution Process (After making the decision to go public)
  2. Have to create the prospectus ^ hire a lawyer, accountant, and registrant underwriter to sell securities on your behalf (underwriter also hires lawyer), management team, and start the process

• Is not just up to the client what goes in the prospectus, it’s for public/investor to decide what needs to be in there ^ you as the UW can’t just say you followed client’s instructions if they don’t allow you to read a k, do due diligence, etc. ^ Integrity of capital markets dictates that this must be highly regulated.

1. Put all of the correct things in the prospectus (NI 41-101 and Rule 45-501)
2. Ensure it contains full, true and plain disclosure of all material facts related to the securities issued or proposed to be distributed, and comply with requirements of Ontario Securities Law (Section 56(1)) (FTPD is a judgment call)
3. Vet the Preliminary Prospectus (forward looking information, underwriter does due diligence, etc.)
4. Certify the prospectus (issuer certificate under Section 58 and underwriter certificate under Section 59)
5. File Preliminary Prospectus and get a receipt, then deliver it.
6. Waiting Period
7. Comment Letter and Clearing Period
8. Respond to deficiencies/file final prospectus (administrator can refuse receipt on broader grounds than for the prelim)
9. Distribution
10. If there is a misrepresentation in the prospectus, there is liability for it

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