Statutory Rights

@@ -0,0 +1,76 @@
---
schema: foundry-doc-v1
title: "Statutory Rights"
slug: statutory-rights
category: governance
type: topic
content_type: topic
quality: complete
short_description: "Statutory investor rights under Canadian securities law: rescission, damages, and the rights that attach to different distribution channels."
status: active
audience: public
bcsc_class: public-disclosure-safe
language_protocol: PROSE-TOPIC
last_edited: 2026-07-03
editor: pointsav-engineering
paired_with: statutory-rights.es.md
---

Canadian securities legislation gives investors certain statutory rights intended to protect
against misrepresentation in offering documents. Which rights apply, and how they operate,
depends on the distribution channel through which units were acquired. This article is a
plain-language explainer of the general framework; it is not a legal opinion, and it does not
describe the specific rights applicable to any particular offering. An investor should consult
the risk acknowledgement or offering document received at the time of subscription, and
qualified legal counsel, for the rights applicable to their own investment.

## Rights attached to a prospectus offering

Where units are distributed under a prospectus, applicable provincial securities legislation —
for example, section 131 of the British Columbia Securities Act and equivalent provisions in
other provinces — generally gives a purchaser a statutory right of rescission or a right of
action for damages against the issuer, its directors, and certain other parties, if the
prospectus contains a misrepresentation. This right typically must be exercised within a
prescribed limitation period following the purchase, and the specific procedural requirements
vary by province. The purpose of the right is to give an investor a remedy where the disclosure
document they relied on turns out to have been materially inaccurate.

## Rights attached to the accredited investor exemption

Units distributed under the accredited investor exemption of NI 45-106 — described in detail in
[[accredited-investor-eligibility|Accredited Investor Eligibility]] — are not accompanied by an offering document that
carries the same statutory misrepresentation liability as a prospectus, because the exemption
is premised on the purchaser's financial sophistication rather than on a regulator-reviewed
disclosure document. A purchaser under this exemption generally does not receive an automatic
statutory right of rescission equivalent to the prospectus right described above. This is a
structural feature of the exemption, not an oversight, and it is the reason accredited investor
purchasers complete a risk acknowledgement confirming their understanding of the reduced
disclosure protection at the time of subscription. Contractual remedies for actual fraud or
misrepresentation outside the statutory framework may still be available under general
principles of law, independent of securities-specific statutory rights.

## Rights attached to the offering memorandum exemption

A separate exemption available under Canadian securities law, the offering memorandum exemption
of NI 45-106, is generally accompanied by a mandated statutory right of action for damages or
rescission if the offering memorandum contains a misrepresentation — a protection built into
that specific exemption because it can be used to distribute securities to purchasers who are
not required to meet the accredited investor threshold. See [[exemptions|Exemptions]] for the specific
exemptions the Direct-Hold Solutions rely upon; the offering memorandum exemption is described
here for comparison and is not the exemption used for the distributions described elsewhere in
this wiki.

## Rights across jurisdictions

The United States, Spain, and Mexico each apply their own statutory investor protection
framework to securities distributions in their jurisdiction, and the mechanics of those
protections differ from the Canadian framework described above. An investor acquiring units in
a jurisdiction other than Canada should not assume that the rights described in this article
apply; the applicable offering document for that jurisdiction's vehicle sets out the rights
that do apply.

## See also

- [[exemptions|Exemptions]] — the specific prospectus exemptions relied upon in each jurisdiction
- [[accredited-investor-eligibility|Accredited Investor Eligibility]] — the exemption most commonly used for private placements
- [[legal-proceedings|Legal Proceedings]] — disclosure of proceedings that could affect these rights