CSA Multilateral Consultation Paper 51-403 – Tailoring Venture Issuer Regulation

September 19, 2010

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CSA Multilateral Consultation Paper 51-403 – Tailoring Venture Issuer Regulation

Letter Summary:

The CAC believes that facilitating access to the capital markets is in the public interest but that it is important to ensure that investor confidence and trust in the capital markets is maintained. We do not believe that the proposed changes will meet these criteria. The principles and guidance found within the CFA Institute’s Code of Ethics and Standards of Professional Conduct require that our members should only invest once they have done proper due diligence with respect to investment recommendations. The proposed changes, due to their reduced disclosure requirements, will not provide sufficient information to permit a user to formulate an informed recommendation. Our comments to your specific questions appear in italics as follows.

Overview of the Council’s Comments:

We believe that good corporate governance is necessary to increase investor confidence. While venture issuers represent a very small percentage of the market capitalization of all listed issuers, they do attract unsophisticated investors due to the potential for significant capital appreciation if successful and who may not understand the associated risks. These investors need the protection hat proper governance standards may provide. Standards designed to protect investors, particularly retail investors, should not be diluted simply because an issuer is small.