Summary of Steps Creating the Preliminary Prospectus

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  1. Summary of Steps
  2. Complete prelim (certified, signed, red herring) (although requires material facts, does not require price, maturity date, interest rate or dividend amount);
  3. File with Administrator along with supporting docs (eg. auditor’s comfort letter, tech reports, consent letters, underwriting agreement, material contracts, resolution of BOD approving prelim, financial statements);
  4. Administrator gives receipt for the prelim if there has been substantial compliance with filing requirements of the OSA and regulations (s.54-55)
  • Section 54: prelim must be in compliance with all requirements of ON Securities law, respecting form/content, and
  • Section 55: Director SHALL issue receipt if doc is in substantial compliance (very little discretion with giving receipt for prelim as long as it appears to have all the things required)

Waiting period begins: time between receipt for prelim and receipt for final (if anything material changes during this period, make amendments)

  • Limits on advertising during this time (policy^ to protect public)
  1. Print/Deliver the document to those who expressed interest
  2. Staff vet the prospectus
  • Vetting is not a passing on the merits of the securities offered, nor is it a representation that it contains full disclosure ^ it is a determination of:

o (a) whether the required items of disclosure have been provided and

o (b) whether there are any gaps in the information that are apparent from the material filed (can take several weeks)

  1. Staff provide a comment letter
  2. Clear up deficiencies, once they’re cleared…
  3. Final prospectus/supporting docs can be filed and a receipt obtained (at discretion of securities commission whether it is in the public interest to do so – even if you met all requirements)

It is only upon the receiving of a receipt for a final prospectus that the actual sales of securities can begin

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