in a standardized form (with any disclosure required by Canadian securities law being provided in a supplement or amendment to the offering document that is provided only to Canadian investors) so that all investors are given the same information about their investment. Managers of foreign private funds, either directly or through a registered dealer, will most often furnish Canadian investors with their standard form of offering document that is “wrapped” with a short supplement containing the requisite additional Canadian disclosure, or, less often, one omnibus offering memorandum drafted explicitly for global use, including for the Canadian market. Although certain disclosure requirements that apply to Canadian registrants are not required for foreign funds, many foreign funds offering their securities in Canada subscribe to best practices and include much of the disclosure provided by Canadian registrants.
Managers of foreign private funds, either
directly or through a registered dealer, will most often furnish Canadian
investors with their standard form of offering
Additional Canadian-specific disclosure in an offering document for the Canadian market may include the following:
document that is “wrapped” with a short supplement containing the requisite additional
– Statutory Rights of Action. Information to the effect that purchasers in certain provinces may have statutory rights of action for rescission or damages where an offering memorandum contains a misrepresentation. – Resale Restrictions. Details of applicable resale restrictions for securities purchased under an offering document in a prospectus-exempt offering. – Collection of Information. Notice must be given that the personal information of each purchaser will be collected and provided to the applicable Canadian securities regulators and, under certain freedom of information laws, potentially to the public. – Registration Exemptions. The disclosure required to rely on certain dealer, adviser and investment fund manager exemptions, as described below. – Tax Disclosure. Where the tax treatment of the securities in the hands of Canadian holders differs materially from the tax treatment in the hands of non-Canadian resident investors, Canadian tax disclosure is often included. – Deemed Representations. The fund may also include “deemed representations” from purchasers to support the issuer’s reliance on the relevant private placement and registration exemptions as well as in respect of the indirect collection of personal information through mandatory sales reports; unless the fund’s Canadian investors are well-known institutional investors, the fund should also obtain accredited investor and permitted client representations from its Canadian investors in the subscription agreement (or a supplement to the subscription agreement).
Canadian disclosure.
6
Go North, Young Fund!
Powered by FlippingBook