VANCOUVER, Nov. 21, 2013 /CNW/ - The securities regulatory authorities
in British Columbia, Alberta, Saskatchewan, Manitoba, Québec, New
Brunswick, Nova Scotia, Yukon, Northwest Territories, Nunavut, and
Prince Edward Island today published for comment a proposed prospectus
exemption that would, subject to certain conditions, allow issuers
listed on the TSX Venture Exchange (TSX-V) to raise money by
distributing securities to their existing security holders.
Currently, if a TSX-V issuer wants to distribute securities to its
existing security holders who are not accredited investors, they must
use a prospectus or a prospectus exemption that requires a disclosure
document, such as an offering memorandum or a rights offering circular.
Data shows that TSX-V issuers rarely use prospectus offerings or
prospectus exemptions that require disclosure documents. This means
that retail security holders who want to make an additional investment
in a TSX-V issuer must generally buy securities on the secondary market
at the market price and pay brokerage fees. This also means that the
TSX-V issuers do not have access to a potential source of capital.
"The proposed exemption would allow TSX-V issuers to distribute
securities to existing security holders, relying on their continuous
disclosure record, thereby reducing the cost for investors and
providing issuers with access to an additional source of financing,"
said Bill Rice, Chair of the CSA and Chair and Chief Executive Officer
of the Alberta Securities Commission.
In order to acquire securities under this exemption, an existing
security holder would have to confirm in writing that they were a
security holder as of the record date for the offering. This limits
use of the exemption to investors that have already made an investment
decision in the issuer. Other key conditions designed for investor
unless the investor has obtained advice regarding the suitability of the
investment from a registered investment dealer, the aggregate amount
invested by the investor in the last 12 months under the exemption must
not be more than $15,000, and
the investor must be provided with rights of action in the event of a
misrepresentation in the issuer's continuous disclosure record.
All participating CSA jurisdictions are inviting comments until January
A copy of the CSA notice and proposed exemption is available on
participating CSA member websites.
The CSA, the council of the securities regulators of Canada's provinces
and territories, co-ordinates and harmonizes regulation for the
Canadian capital markets.
SOURCE: Canadian Securities Administrators
For further information:
British Columbia Securities Commission
Autorité des marchés financiers
Manitoba Securities Commission
Nova Scotia Securities Commission
Nunavut Securities Office
Financial and Consumer Affairs
Authority of Saskatchewan
Alberta Securities Commission
Financial and Consumer Services Commission
PEI Securities Office
Office of the Attorney General
Office of the Yukon Superintendent of securities