Regulators Introduce Temporary Relief from OM Investment Limits for Reinvestments
Written By: Michael Holder, Kanchan Mehta, Rijja BaigEligible investors in Ontario can reinvest up to $100,000 per year in the same issuer without impacting the $100,000 annual investment limits that already apply. Similar blanket orders have been issued in Alberta, New Brunswick, Nova Scotia, Québec and Saskatchewan.
Background
On April 17, 2025, the Ontario Securities Commission (“OSC”) issued Coordinated Blanket Order 45-933 (the “Blanket Order”), which grants temporary relief from certain investment limits under the Offering Memorandum prospectus exemption (the “OM Exemption”) in section 2.9 of National Instrument 45-106 (“NI 45-106”). The relief, which remains in effect until October 16, 2026, was developed in coordination with other Canadian securities regulators and aims to make capital-raising more flexible for issuers, without compromising investor protection.
A Need for Flexibility
Under the current OM Exemption, individuals who qualify as” eligible investors” are limited to investing up to $100,000 over a 12-month period (the “Twelve Month Cap”) if they receive advice from a portfolio manager, investment dealer, or exempt market dealer that the investment is suitable.
However, industry stakeholders have recommended increasing the investment limit to better support issuers in raising capital and to enable investors to engage in a broader range of exempt market investments. In its 2021 report, the Capital Markets Modernization Taskforce recommended exempting such reinvestment amounts from the Twelve-Month Cap, provided that the investor continues to receive professional advice confirming the suitability of the investment.
What the Blanket Order Does
The Blanket Order allows eligible investors to reinvest up to $100,000 they received as dividends or distributions from the issuer into the same issuer without affecting the 12 12-month cap provided that:
The investor is an eligible investor;
The investor is advised by a registered portfolio manager, investment dealer, or exempt market dealer that the investment is suitable; and
The amount reinvested in the same issuer over the prior 12-month period does not exceed $100,000.
We applaud the increased flexibility introduced in NI 45-106 and hope that this temporary order will be formalized as a permanent rule through a multilateral instrument.
We encourage other jurisdictions to consider adopting the same relief.
For more information about this relief or to request similar relief in other jurisdictions, please contact us at info@northstarcompliance.com