News Release
New Rules in Alberta and British Columbia Give Businesses Greater Access to Capital
-
Date:
2001-09-27 -
Number:
2001/44
Released: 09/27/01 Contact: Andrew Poon
NR 01-44 (604) 899-6880 or
(BC & Alberta) 1-800-373-6393
Calgary -- The Alberta and British Columbia Securities Commissions announced today proposed new capital raising rules which will make it easier for businesses to raise money from investors in the two provinces.
The new rules are the product of a joint project of the two commissions undertaken in response to industry comments that the cost of raising money is too high, especially for small and medium-sized businesses.
"The new rules will make it easier and less expensive for issuers to raise capital in Alberta and British Columbia and should particularly benefit small business," said ASC Chair Stephen Sibold.
"This joint BC/Alberta initiative is important as it will harmonize the rules in the two provinces and will provide greater investment opportunities for investors without compromising investor protection," added BCSC Chair Doug Hyndman.
The proposed rules provide new and expanded exemptions from the current prospectus disclosure requirements that typically apply to issuers raising money from the public. The current capital raising costs can be particularly burdensome to the junior companies that make up a significant portion of the Alberta and BC capital markets.
The four proposed harmonized exemptions are:
The new capital raising rule and accompanying documents have been published on the websites of the ASC (www.albertasecurities.com) and BCSC (www.bcsc.bc.ca). Public comments are invited until November 30, 2001.
Direct links to proposed rule and accompanying documents:
For further information please contact:
Joni Delaurier Andrew Poon
Alberta Securities Commission BC Securities Commission
(403) 297-4481 (604) 899-6880
1-800-373-6393 (BC & Alberta)
NR 01-44 (604) 899-6880 or
(BC & Alberta) 1-800-373-6393
Calgary -- The Alberta and British Columbia Securities Commissions announced today proposed new capital raising rules which will make it easier for businesses to raise money from investors in the two provinces.
The new rules are the product of a joint project of the two commissions undertaken in response to industry comments that the cost of raising money is too high, especially for small and medium-sized businesses.
"The new rules will make it easier and less expensive for issuers to raise capital in Alberta and British Columbia and should particularly benefit small business," said ASC Chair Stephen Sibold.
"This joint BC/Alberta initiative is important as it will harmonize the rules in the two provinces and will provide greater investment opportunities for investors without compromising investor protection," added BCSC Chair Doug Hyndman.
The proposed rules provide new and expanded exemptions from the current prospectus disclosure requirements that typically apply to issuers raising money from the public. The current capital raising costs can be particularly burdensome to the junior companies that make up a significant portion of the Alberta and BC capital markets.
The four proposed harmonized exemptions are:
- Offering Memorandum Exemption - allows issuers to raise any amount of money from anyone provided that the investor acknowledges the risks of investing and receives an offering memorandum - a short, simple disclosure document. Investor protection provisions will also be added giving purchasers almost identical rights to those they get under a prospectus. The rights include a two-day right to cancel the purchase and broader rights to cancel or sue for damages if there is a misrepresentation in the offering memorandum.
- Accredited Investor Exemption - allows issuers to raise any amount of money from various financial institutions, pensions, investment dealers, established companies and wealthy individuals without a disclosure document.
- Family, Friends and Business Associates Exemption - allows issuers to raise any amount of money from family members, close friends and close business associates without a disclosure document.
- Private Issuer Exemption - increases the ability of private companies to raise money while remaining private.
The new capital raising rule and accompanying documents have been published on the websites of the ASC (www.albertasecurities.com) and BCSC (www.bcsc.bc.ca). Public comments are invited until November 30, 2001.
Direct links to proposed rule and accompanying documents:
- BC Notice 2001/67 Publication for Comment of Proposed Capital Raising Exemptions
- Multilateral Instrument 45-103 Capital Raising Exemptions
- Companion Policy 45-103CP
- Form 45-103F1Offering Memorandum for Non-Qualifying Issuers
- Form 45-103F2 Offering Memorandum for Qualifying Issuers
- Form 45-103F3 Risk Acknowledgement
- Text of contractual rights of action for possible inclusion in MI 45-103
- Consequential amendments to the Securities Rules
- Sample Offering Memorandum
- Sample Risk Acknowledgement
The Alberta Securities Commission is the industry funded regulatory agency responsible for administering the Alberta Securities Act. Its mission is to foster a fair and efficient capital market in Alberta and, together with the other members of the Canadian Securities Administrators, develop and operate the Canadian Securities Regulatory System.
The B.C. Securities Commission is the independent provincial government agency responsible for regulating trading in securities and exchange contracts within British Columbia.
- 30 -
For further information please contact:
Joni Delaurier Andrew Poon
Alberta Securities Commission BC Securities Commission
(403) 297-4481 (604) 899-6880