Today – amongst all the election noise – a little seen press release was issued from the Alberta Securities Commission … Notice of Publication and Request for Comment for a Proposed Multilateral Instrument 45-109 Prospectus Exemption for Start-up Businesses.
In short – it is the ASC’s answer to the recent Start-up Crowdfunding Exemption recently issued by six other jurisdictions – but better. I haven’t dug deep into the detail just yet, but from my first initial review, I have to say I like it. It has a lot of common sense rules to it – a $1 million capital raise, common sense disclosure, a $5,000 maximum investment from an ordinary investor and the ability to conduct concurrent raises, all through a registrant.
For those of you that remember my older post “The Trouble with the OSC’s Crowd” the ASC has solved many of the issues I have with the OSC’s yet to be implemented version. And, better yet, they don’t even call it a Crowdfunding Exemption – it is simply a Start-up Business Exemption that is directed principally at small and very early-stage businesses and is designed to allow them to raise a defined amount of money in a more cost effective way while still providing appropriate investor protection. It is after all, another tool in a company’s capital raising toolbox.
Our team is currently reviewing the proposed exemption in detail and will work with other stakeholders in providing comment. For now, we are pleased to see this initiative from the ASC. Although they stand on their own (with the Nunavut Securities Office), they have provided some solutions for multi-jurisdictional offerings. Stay tuned – we’ll provide more comments soon.