Purpose of consultation:

FSRA had sought feedback on its proposed Guidance, which would require co-operative corporations (“co-ops”) that issue “high-risk offerings” of securities to provide enhanced disclosure to investors in the offering statement required under section 34 of the Co-operative Corporations Act (the “Co-op Act”). If enhanced disclosure is not provided, FSRA will not issue a receipt for the offering statement.

FSRA’s principal objective in issuing this Guidance is to protect investors, by helping them make more informed investment decisions. In addition, the Guidance is intended to help co-ops understand what additional disclosures FSRA requires, promote high standards of business conduct, improve the transparency of FSRA’s decision-making process, and reduce the risk of deceptive or fraudulent conduct relating to high-risk offerings.  

This Guidance provides FSRA’s:

  • Interpretation of the requirement for co-ops to provide “full, true and plain disclosure of all material facts relating to the securities proposed to be issued”, pursuant to subsection 35(1) of the Co-op Act, in the context of “high-risk offerings”; and
  • Approach to exercising its discretion to issue a receipt for an offering statement for a “high-risk offering” of securities, if enhanced disclosure has been provided.

FSRA received three submissions regarding the proposed Guidance during the consultation period (i.e. from October 5, 2020 to November 18, 2020).

Our response

FSRA would like to thank all commenters for the views expressed. FSRA carefully considered all comments received before finalizing and issuing the Guidance.

List of contributors

The following stakeholders took the time to share their perspectives with FSRA:

  1. Julien Geremie (Conseil de la coopération de l’Ontario)
  2. Erin Morgan (Ontario Co-operative Association)
  3. Canadian Advocacy Council of CFA Societies Canada