Proposed Amendments to NI 45-106 Prospectus and Registration Exemptions

July 12, 2014

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Proposed Amendments to NI 45-106 Prospectus and Registration Exemptions

Letter Summary:

While we support the platform legislation approach of the Consultation Draft in order to promote regulatory flexibility to create and amend rules quickly, in the era of burden reduction we would appreciate additional information with respect to the need for an entirely new statute in lieu of substantively equivalent targeted amendments amending the existing Securties Act and consolidating the Commodity Futures Act. Given that a new Act in form of the Consultation Draft was the chosen course of action, publishing of the cost-benefit analysis prepared in connection with this decision would also likely be of interest for stakeholder review. Given the Consultation Draft, and given the length of time one would anticipate the resulting final Act to be force, we believe there may be room for additional forward-thinking policy innovation (particularly given that ‘facilitating innovation’ is one of the stated principles of the Consultation Draft) and additional legislative provisions with regard to topical issues in securities regulation such as sustainability and diversity. We believe consideration should be given to enshrining.

Overview of the Council’s Comments:

We support regulatory measures designed to assist the capital-raising needs of Canadian issuers while strongly emphasizing investor protection. 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.