While we appreciate the efforts of the British Columbia Securities Commission to quickly examine alternatives to the existing prospectus exemption regime, it is important that the conditions of the proposed start-up exemption do not favour small issuers over investor protection and transparency in the capital markets. We have serious investor protection concerns with respect to the proposed exemption, particularly as a result of the lack of registration for the portals. Absent registration, we believe it will be difficult for regulators to monitor abuse of the exemption before investor harm occurs, and difficult to enforce the remaining proposed requirements.
Overview of the Council’s Comments:
At a minimum, we would suggest that all of the above-proposed conditions should be required in order for CEDIFs to be exempted from the investment fund manager registration requirements. We would recommend that the limit per beneficial investor be tied to that investor’s net worth or net assets and should be imposed on the purchase of any CEDIF in a calendar year