The British Columbia Securities Commission (BCSC) recently
announced that it is proposing to revoke the dealer registration
exemptions contained in BC Instrument 32-513 Registration
Exemption for Trades in Connection with Certain
Prospectus–Exempt Distributions (BCI 32-513) and BC
Instrument 32-517 Exemption from Dealer Registration
Requirement for Trades in Securities of Mortgage Investment
Entities (BCI 32-517).
In 2009, the Canadian Securities Administrators changed the
dealer registration trigger requirements and removed the vast
majority of the dealer registration exemptions available.
They also created a new category of registration for exempt market
dealers. At that time, the BCSC along with a number of other
securities regulators, provided an exemption from the requirement
to register as a dealer for persons that only sell private
placement securities under certain capital raising
These capital raising exemptions cover prospectus exemptions
contained in section 2.3 (accredited investor), section
2.5 (family, friends and business associates), section 2.9
(offering memorandum) and section 2.10 (minimum
investment amount) prospectus exemptions (together, the
capital raising exemptions) in National Instrument 45-106
Prospectus and Registration Exemptions. The dealer
registration exemption for persons that only sell private placement
securities under the capital raising exemptions is contained in
BCI 32-513 and is subject to compliance with certain
conditions detailed therein.
In the BCSC notice of the proposed revocation, the BCSC noted
that at the time the exemptions were adopted the BCSC did not have
the information to understand the impact that the new registration
requirements would have on private enterprise financing or
investors. The BCSC also noted that the securities regulators
in Alberta, Manitoba, Saskatchewan, Northwest Territories, Nunavut,
and Yukon have similar exemptions.
The BCSC also issued similar dealer registration relief
specifically for trades in securities of mortgage investment
entities under BCI 32-517.
In the BCSC notice and request for comment, the BCSC set out the
following reasons for revoking the registration exemptions
contained in BCI 32-513 and BCI 32-517:
the BCSC believes that the impact on capital raising will be
based on the BCSC's compliance review, the BCSC is of the
view that those relying on the exemptions are not complying with
its investor protection conditions; and
the BCSC believes that private placement market investors will
be better protected if they purchase securities through
Deadline for Comments
The deadline for the submission of comments on the proposed
revocation is February 4, 2013.
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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