Proposed new guidance from the Financial Services Regulatory Authority of Ontario (FSRA) calls for “high risk” offerings from financial co-operatives to provide investors with enhanced disclosure.
FSRA launched a consultation on guidance that will identify riskier offerings by co-ops that are raising capital, and will require added disclosures by those issuers.
The proposed disclosure requirements include detailing debt repayment, insolvency rankings and financial obligations.
“The enhanced disclosure requirement is intended to ensure that investors better understand the risks involved before purchasing securities in high-risk offerings,” it said.
Additionally, the regulator said the guidance will promote transparency “by helping co-ops better understand the additional disclosures that FSRA requires before it will issue a receipt for an offering statement involving a high-risk offering.”
FSRA also said that it expects these measures to help bolster public confidence in the co-op sector, and to deter fraud and other misconduct.
The deadline for providing feedback on the proposals is Nov. 18.