After British Columbia revised its crowdfunding rules to permit B.C. issuers to raise funds from Alberta residents – as we reported a few weeks ago – it was only a matter of time before Alberta reciprocated. On October 3, 2017, the Alberta Securities Commission announced amendments to Companion Policy 45-517 Prospectus Exemption for Start-up Businesses (see a blackline of the changes, which were effective when issued).
The amendments clarify how cross-border financings from Alberta into British Columbia (and vice versa) will work and, more broadly, how ASC Rule 45-517 Prospectus Exemption for Start-up Businesses and BC Instrument 45-535 Start-up Crowdfunding Registration and Prospectus Exemptions will work together. Issuers undertaking offerings in both Alberta and British Columbia will be subject to the requirements of each provincial rule, even where one rule is more restrictive than the other. However, limited accommodations have been made in the Alberta Rule to facilitate cross-border offerings, including, for example, the ability to provide the B.C. form of risk acknowledgement to investors not resident in Alberta where the offering is made under the B.C. Instrument.
Could Eventually Apply to Other Jurisdictions
The amendments allow an issuer from a jurisdiction outside Alberta to take advantage of ASC Rule 45-517 if the issuer is permitted to do so by the securities legislation of that other jurisdiction. While British Columbia is currently the only jurisdiction that will permit a cross-border offering with Alberta, there is no reason in principle that other jurisdictions could not also become involved.
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