Do you have comments on Multilateral CSA Notice 45-315
Proposed Prospectus Exemption for Certain Distributions through
an Investment Dealer? If so, comments on the questions listed
below are due by June 15, 2015!
On April 16, 2015, the securities regulatory authorities in
British Columbia, New Brunswick and Saskatchewan published for
comment a proposed prospectus exemption that would, subject to
certain conditions, allow issuers listed on a Canadian exchange
to raise money by distributing securities to investors who have
obtained advice about the suitability of the investment from an
One of the main requirements of securities legislation is that
an issuer distributing a security must file and obtain a receipt
for a prospectus. However, securities legislation provides
exemptions from the prospectus requirement in circumstances where a
prospectus is not necessary (because of the investor's
knowledge, sophistication or relationship with principals of the
issuer). The most commonly used prospectus exemption is the
accredited investor exemption.
If an issuer wants to raise capital from investors that do not
qualify for an existing exemption from the prospectus requirement,
the principal prospectus exemptions available require an offering
document. However, data from the regulatory authorities proposing
the foregoing exemption indicates that Canadian issuers (because of
the time and cost to prepare the required offering document) do not
generally use these exemptions to raise capital from retail
investors. Therefore, retail investors have limited opportunity to
invest directly in issuers and participate in more favorable terms
generally offered through private placements.
For more details of the proposed exemption allowing retail
investors to invest if they obtain investment dealer advice, and
the proposed exemption's key conditions, please click
The regulatory authorities specifically want comments/feedback
in respect of the following questions:
If you are an issuer listed on one of the proposed exchanges,
will you use the proposed exemption?
One of the conditions of the proposed exemption is that the
investor must receive suitability advice from a registered
investment dealer. Should the regulatory authorities consider
expanding this provision so that investors could also receive
suitability advice from a registered exempt market dealer?
The regulatory authorities are currently proposing that the
exemption be subject to the same resale restrictions as most other
capital raising exemptions (i.e., a four month restricted period).
Do you agree that a four month hold period is appropriate for this
exemption? If not, please explain.
Do you agree that the removal of the prospectus requirement for
offerings under the proposed exemption maintains sufficient
investor protection? If not, please explain.
Send your responses to:
Senior Legal Counsel, Corporate Finance
British Columbia Securities Commission
P.O. Box 10142, Pacific Centre
701 West Georgia Street
Vancouver, British Columbia V7Y 1L2
Fax: 604-899-6581 Email: firstname.lastname@example.org
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