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ASC advances new capital-raising initiatives for start-up businesses

Jul 26 2016

The Alberta Securities Commission (ASC) announced today that it is moving forward with two initiatives designed to facilitate capital-raising for small and medium-sized enterprises while providing appropriate investor protection.

First, the ASC has adopted ASC Rule 45-517 Prospectus Exemption for Start-up Businesses (ASC Rule 45-517). The new rule is available immediately to help facilitate Alberta-based small or start-up issuers seeking to raise modest amounts of capital from Alberta investors. ASC Rule 45-517 provides a prospectus exemption that can be used with or without a funding portal or other registered dealer. It is designed to clearly explain and limit risks for investors.

Second, the ASC has today published for a 30-day comment period Multilateral Instrument 45-108 Crowdfunding (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.

“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,” said Stan Magidson, Chair and Chief Executive Officer. “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.”

“Small and medium-sized businesses are a crucial part of Alberta’s economy, driving the province forward thanks to their entrepreneurship and innovation,” said Alberta’s President of Treasury Board and Finance Minister Joe Ceci. “I am so pleased to see the ASC take these important steps to encourage the growth of capital for these job creators. Our government remains steadfast in our commitment to diversify our economy and ensure Alberta remains a resilient place to do business.”

The key elements of the two regimes are described briefly below. Details on ASC Rule 45-517 and MI 45-108 can be found on the ASC website at www.albertasecurities.com.

 
ASC Rule 45-517
(available for use immediately)
MI 45-108
(currently out for comment)
Investment Limits
(per investor)
·   $1,500/distribution
·   $5,000 with positive suitability advice from a registered dealer
·   $2,500/distribution
·   $25,000 for accredited investors
Offering Limits
·   $250,000 per offering
·   Maximum 2 offerings/year
·   Lifetime limit $1,000,000
·   $1,500,000/12 months
Online Funding Portals
·   Use of funding portal not required
·   Use of funding portal required

 

The ASC is the regulatory agency responsible for administering the province's securities laws. It is entrusted with fostering a fair and efficient capital market in Alberta and with protecting investors. As a member of the Canadian Securities Administrators, the ASC works to improve, coordinate and harmonize the regulation of Canada's capital markets.

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For more information:

For Media Inquiries:
Nicole Tuncay
Senior Communications Advisor
403-297-4008
For Investor Inquiries:
ASC Public Inquiries
Toll Free: 1-877-355-4488