On June 22, 2013, an exemption order issued by the Canadian securities regulators came into effect granting limited relief from most of the requirements that called for a Canadian private placement supplement, or wrapper, for selling securities of non-Canadian issuers into Canada. The exemption will apply to sales of securities in Canada that are made by one of the dealers named in the exemption order or one of its affiliates. The securities regulators expect that the relief will facilitate foreign securities offerings being made in Canada on a private placement basis to certain institutional investors. It will improve access to foreign securities for the benefit of Canadian institutional investors.

On April 23, 2013, the Ontario Securities Commission, on behalf of all Canadian securities regulators, issued an exemptive relief order and provided an additional permission as well as an advisory letter (collectively, the Order) exempting named Canadian and foreign broker-dealers (and their affiliates) from having to provide wrapper disclosure in connection with certain private placements. Normally an offering of securities to Canadian purchasers under an exemption from local prospectus requirements obligates certain prescribed Canadian disclosure to be included in the offering document or provided as a separate wrapper to the offering document. The Order provides that this disclosure is no longer required provided certain conditions are fulfilled. If the conditions are satisfied, securities may be distributed in Canada with no Canadian required disclosure. The Order did not come into effect until June 22, 2013 to allow other broker-dealers an opportunity to apply for equivalent relief.

The Order provides:

The Order applies to offerings where the following conditions have been fulfilled:

If the applicable conditions are met and the offering complies with other applicable Canadian securities law requirements, the US offering document does not need to be wrapped to include the Canadian-mandated disclosure described above.

The relief from Canadian connected issuer/related issuer disclosure obligations requires that the offering document provided to prospective Canadian purchasers comply with US law regarding disclosure of underwriting conflicts of interest applicable to registered offerings in the US (whether or not the offering is registered). A US prospectus will fulfill this requirement but the US offering does not need to be a registered offering. A US or other foreign private placement circular will fulfill this requirement provided its disclosure regarding underwriting conflicts of interest meets the same standard as for a US registered offering. Rule 144A offerings in the US will only be eligible to rely on the Order if the Rule 144A offering memorandum voluntarily contains all of the relationship disclosure that would have been required by SEC and FINRA rules if the offering had been registered under the Securities Act. A broader exemption is available for offerings of securities issued or guaranteed by a foreign government, which may require no underwriter conflicts relationship disclosure at all, unless there are certain ownership relationships between the foreign government and the dealers. In that case, compliance with SEC and FINRA disclosure requirements would still be compulsory.

Before any of the dealers covered by the Order may rely on the Order for sales to a particular Canadian purchaser for the first time, that purchaser must be given a notice containing prescribed information, including a warning that it will no longer be receiving the statutory rights of action disclosure and certain other information traditionally contained in wrappers. The Canadian purchaser must sign and return a consent form agreeing to the use of the wrapper exemption for sales made to it.

The Order will expire on June 22, 2016, or earlier if rule amendments come into force in each jurisdiction of Canada providing substantially the same relief as the Order.