LAW REPORTER

A proposal to loosen rules in Ontario for what is known as the "exempt market" could mean billions in new financing for small companies, proponents say. But critics warn the move could see more investors sucked into unsuitably risky businesses or frauds.

In the exempt market, companies can raise capital without using a prospectus, the detailed disclosure document that is normally required reading for anyone buying shares. Under Ontario's current rules, investors in this riskier market must meet high thresholds for minimum income or assets.

The Ontario Securities Commission is now proposing to allow any investor to buy up to $10,000 worth of equity a year after seeing less-detailed disclosure documents known as "offering memorandums."

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