The Alberta Securities Commission (ASC) in Canada has published two initiatives designed to facilitate capital-raising for SMEs.
First, the ASC has adopted ASC Rule 45-517 Prospectus Exemption for Start-up Businesses (ASC Rule 45-517). Immediately available, the new rule provides a prospectus exemption for small Alberta companies seeking to raise capital either with a funding portal or other registered dealer. The rule may be described as a micro-exemption as the funding limit is just CAD $250,000.
The second policy shift is regarding crowdfunding. The ASC has opened a 30 day comment period on a proposal to increase the limits for both investors and issuers across multiple jurisdictions.
Second, the ASC has today published for a 30-day comment period Multilateral Instrument 45-108Crowdfunding (MI 45-108). If adopted, MI 45-108 would allow Alberta issuers to raise somewhat larger amounts through crowdfunding offerings across multiple jurisdictions in Canada. A funding portal would be required but the maximum would be for an issuer to raise CAD $1.5 million in a 12 month period.
Stan Magidson, Chair and Chief Executive Officer of the ASC stated;
“This solution is tailored to the unique needs and challenges of Alberta’s small and medium-sized businesses, which are a big part of our province’s economic engine. Based on feedback from market participants we’re immediately implementing a lower-cost, straightforward way to raise modest amounts of capital. At the same time, we propose that Alberta joins a multi-jurisdictional crowdfunding initiative that would provide even greater access to capital. We believe these are important steps to support Alberta’s economy during one of the most severe recessions our province has ever endured.”
Alberta’s President of Treasury Board and Finance Minister Joe Ceci said he was “so pleased to see the ASC take these important steps to encourage the growth of capital for these job creators.”
“Small and medium-sized businesses are a crucial part of Alberta’s economy, driving the province forward thanks to their entrepreneurship and innovation,” stated Ceci.
Investment crowdfunding has been slow to gain traction in some of the Canadian provinces with some industry participants believing existing rules are far too strict.
Details on ASC Rule 45-517 and MI 45-108 may be found on the ASC website at www.albertasecurities.com.
