Today's update provides a short overview of some of the
comments received in response to the consultation paper, including
with respect to the impact that any changes to the exemptions would
have on capital raising and investment opportunities. As expected,
the CSA received mixed feedback. With respect to the accredited
investor exemption, some respondents urged the CSA to keep the
status quo, while others suggested a broader exemption to provide
better access to capital for business and investment opportunities
for the exempt market. Some of the suggestions included lowering
the prescribed income and asset thresholds or adding new categories
based on an investor's education, work experience or investment
Respondents also gave mixed feedback on the $150,000 minimum
investment amount exemption, ranging from criticism of it being a
flawed basis on which to measure investor sophistication to support
on the basis of its simplicity and usefulness when no other
exemption is available. As we discussed back in January of this
year, the SEC undertook a similar review of exemptions available
under the Securities Act of 1933,
adopting an amended "accredited investor" net worth
Moving forward, the CSA also intend to analyze information from
exempt distribution reports before making any further
recommendations and expect to publish their conclusions later this
year. Of particular note, the notice suggests that some CSA
jurisdictions are also considering expanding their review to
include other capital raising exemptions, including the
"offering memorandum" exemption, which we note is not
universally available throughout Canada. The OSC also announced
today that it is broadening the scope of its
exempt market review to consider the introduction of new prospectus
exemptions, and intends to publish a second consultation notice
seeking additional public feedback.
While it is unclear whether any specific exemptions will be
formally considered, as we noted in a post last month, a
"crowdsourcing" exemption in the U.S. has recently
garnered much publicity. Whether any additional exemptions are
ultimately adopted, however, remains to be seen.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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