Investor protection in the exempt market is best enhanced by providing clear risk disclosures, taking some steps to verify eligibility to participate in the market, and implementing a best interest standard on all registrants. We remain of the view that it is
important, to the extent possible, to harmonize the capital raising exemptions across all Canadian jurisdictions. It is becoming increasingly confusing for issuers, advisors, dealers and investors to determine whether or not a prospectus exemption is available to an issuer or purchaser in a particular province or territory, which has a negative impact on the efficiency of our markets. If the Proposed Amendments were to proceed, we would support the adoption of a similar exemption across Canada.
Overview of the Council’s Comments:
We support the efforts made by the securities regulatory authorities across Canada to streamline access to capital by issuers of all market capitalizations at a lower cost while endeavouring to ensure that investor protection remains a high priority. The exemption
may provide issuers with the ability to raise capital through a broader potential group of investors, albeit initially only in three provinces. We understand from the notice accompanying the Proposed Amendments that the proposed exemption is intended to
reflect the fact that retail investors are permitted to invest in listed securities on the secondary market without the benefit of any specific disclosure document and to allow such investors to benefit from the ability to participate in primary offerings where there
may be a discount to the market price or equity sweeteners offered.