New rule simplifies funding for young companies

The Ontario Securities Commission (OSC) has introduced a new rule to help recently listed companies raise capital more efficiently. As of October 16, 2026, OSC Rule 45-511 allows these companies to raise up to $100 million without requiring a full prospectus.

This rule is a formalized version of the Coordinated Blanket Order 45-930, which regulators have been using to provide a shortcut for new issuers. However, the new rule comes with stricter guidelines to protect investors.

To qualify for this exemption, companies must have gone public through an underwritten initial public offering (IPO) within the past year, be in good standing as a reporting issuer, and be current on their disclosure filings. They must also not be an investment fund or a company listed on certain over-the-counter markets.

Before approaching investors, the company must issue a news release and a detailed offering document that outlines the security type, price, and amount being raised. The document must also include a warning that no regulator has reviewed it and that investors should consult a registered dealer before buying.

If the offering document contains misleading information, the company can be held legally accountable, just like with a full prospectus. Investors are also protected, with the option to cancel their purchase within two business days or seek a refund within 180 days if the document contains inaccuracies.

Two ceilings keep the exemption from being a free-for-all. Added up with any other such raises in the past year, the company can’t pull in more than $100 million, and can’t raise more than 20 per cent of the total value of its publicly traded shares. The money also can’t go toward a restructuring, a deal needing shareholder sign-off, or, for smaller venture companies, a major acquisition. Company insiders, employees and consultants are locked out of buying in, and the whole raise has to wrap up within 45 days of that first news release, with a regulatory filing due 10 days after that.

For more information, the full text of OSC Rule 45-511 is available at the OSC website.