If there are adequate safeguards in place, an issuer may distribute its securities to investors without a prospectus. Such offerings are most often referred to as exempt market offerings or private placements.
Private placements are completed pursuant to an exemption from the prospectus requirement under applicable securities laws. Exemptions are available in circumstances where the investor is deemed to have the requisite financial wherewithal, as is the case with the accredited investor exemption, where the investor has the ability to withstand the loss of the investment, as is the case with the minimum amount exemption, and where there is disclosure that can stand in the place of a prospectus, as is the case with the offering memorandum exemption.
(See securities regulation in Canada and Canadian capital markets)