On January 14, 2016 the securities regulatory authorities of
British Columbia, Alberta, Saskatchewan, Manitoba and New Brunswick
(the Participating Jurisdictions) adopted a new prospectus
exemption (the Exemption) that will permit Canadian listed issuers
to distribute securities to investors who have obtained advice
about the suitability of the investment from an investment dealer.
The Exemption is subject to the following conditions:
the issuer must be a reporting issuer
in at least one Canadian jurisdiction and have a class of equity
securities listed on the Toronto Stock Exchange, the TSX Venture
Exchange, the Canadian Securities Exchange or Aequitas Neo Exchange
the issuer's public disclosure
must be up to date;
the offering can consist only of a
listed security, a unit consisting 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
the news release announcing the
offering must disclose all required information regarding the
distribution and any material fact not yet generally
the investor must obtain advice
regarding the suitability of the investment from an investment
in all Participating Jurisdictions
other than Alberta1, the investor must be provided with
a contractual right of action in the event of a misrepresentation
in the issuer's continuous disclosure record; and
although an offering document is not
required, if an issuer voluntarily provides one, an investor will
have certain rights of action in the event of a misrepresentation
Like most other capital raising prospectus exemptions, the first
trade of securities issued under the Exemption will be subject to
resale restrictions under section 2.5 of National Instrument 45-102
Resale of Securities.
The stated purpose of the Exemption is to facilitate capital
raising for listed issuers and foster participation of retail
investors in private placements while maintaining appropriate
1 In Alberta, purchasers are afforded a statutory right of action under Part 17.01 of the Securities Act (Alberta).
The foregoing provides only an overview and does not
constitute legal advice. Readers are cautioned against making any
decisions based on this material alone. Rather, specific legal
advice should be obtained.
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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