The Alberta Securities Commission (ASC) has
proposed a new prospectus exemption that would allow issuers listed
on a Canadian exchange to distribute securities to investors who
have obtained advice about the suitability of the investment from
an investment dealer.
The proposed exemption is similar to the prospectus exemption
proposed by securities regulators in British Columbia, New
Brunswick and Saskatchewan in April 2015. Certain conditions have to
be met for a distribution to be made under the proposed
The issuer must be a reporting issuer in Canada, have a class
of securities listed on a Canadian stock exchange and be current in
its continuous disclosure obligations.
The offering can only consist of a listed security or a unit
comprised of a listed security and a warrant to acquire another
listed security, or another security convertible into a listed
security at the security holder's sole discretion.
The news release announcing the offering must disclose
reasonable details of the distribution, including the use of
proceeds, and a statement that there is no material fact or
material change that has not been generally disclosed.
If an issuer voluntarily provides an offering document
investors will have certain rights of action in the event of a
misrepresentation in the offering document.
The investor must obtain advice regarding the suitability of the
investment from an investment dealer.
According to the ASC, retail investors that are neither
accredited investors nor existing security holders have limited
access to private placements. The prospectus exemptions that
would generally be available to such investors require an offering
document. The ASC argues that few issuers use these
prospectus exemptions because of the time and cost involved in
preparing an offering document. As a result, issuers are left
with a limited ability to reach retail investors and retail
investors are excluded from the price discounts and deal sweeteners
available to private placement investors. In the ASC's
view, the proposed exemption addresses these concerns.
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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