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Letter Summary:
As a general comment, the CAC is supportive of the efforts of the Nova Scotia Securities Commission to facilitate reinvestment into the local economy by retail investors who want to invest in businesses within their own communities. However, it is important that the interests of local businesses in accessing capital more quickly and easily do not overshadow the importance of investor protection and transparency in the capital markets. We have a number of investor protection concerns with respect to an exemption available solely to Community Economic Development Investment Funds (“CEDIFs”) from the investment fund manager requirement, as outlined below.
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