New Alberta law to give SROs greater powers

In an effort to fight the financial woes associated with the severe downturn in the oil patch, Alberta is moving forward with two initiatives to make capital raising easier for small businesses and start-ups. Both are designed to boost investment while preserving protections for investors.

In a statement, the Alberta Securities Commission (ASC) noted that it has adopted ASC Rule 45-517 Prospectus Exemption for Start-up Businesses. The new rule will provide “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,” the ASC statement says.

The second initiative is a multilateral instrument, MI 45-108 Crowdfunding, that will allow somewhat larger amounts to be raised across several jurisdictions in Canada. The crowdfunding initiative is out for a 30-day comment period.

“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,” says Stan Magidson, Chair and Chief Executive Officer in the ASC statement. “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 duringone of the most severe recessions our province has ever endured.”

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