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Ontario’s new exempt market rules has supporters and detractors

Under new exempt market rules that went into effect in Ontario this week, investors are allowed to participate in private capital investment opportunities previously only available for high net worth investors.

Don’t count Jerome Hass, a portfolio manager at Toronto-based Lightwater Partners Ltd., among the supporters of the new exempt market rules that went into effect in Ontario this week.

One of the key changes is an offering memorandum (OM) exemption that will allow investors to participate in private capital investment opportunities previously only available for high net worth investors.

The new rules –  they include exemptions for capital raisings through crowdfunding and through friends, family and business associates – will also harmonize the rules across the country.

Hass agrees with the decision to open up the exempt market through the offering memorandum exemption, which because of the lower income thresholds will allow more investors to participate. But he doesn’t like the second part of that decision, namely the exclusion of investment funds from the new rules.

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