British Columbia Securities Commission

British Columbia Securities Commission

September 09, 2010 12:56 ET

British Columbia Securities Commission: B.C. Securities Regulator Seeks to Shed More Light on Money Raising in Exempt Market

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 9, 2010) - The British Columbia Securities Commission is seeking public input on a proposal that would give investors valuable information about companies raising capital under exemptions from B.C. Securities Act requirements.

B.C.'s exempt market is an important source of financing for venture capital companies. Using capital-raising exemptions, companies can raise money from the public without providing a prospectus. In many cases, the investments are in start-up companies that are higher risk and often illiquid.

"We are proposing that companies raising capital in the exempt market be required to file a new form disclosing more information about the company and monies raised," says BCSC Chair Brenda Leong.

For non-reporting or private companies, investors would get disclosure about their insiders and the promoters who help market their securities, and in effect, who is running these companies. They would get access to information that is already publicly available for reporting or public companies.

Also under the new form, both reporting and non-reporting companies would be required to disclose more information about the purchasers of their securities, including purchaser names and any connection they have to the company (e.g. whether they are registrants or directors, officers or significant shareholders) and the securities purchased.

"This is the type of information that would strengthen investor protection and market integrity by providing more transparency about the exempt market," says Leong.

"This proposal is another step in the Commission's integrated strategy to protect investors from the risks of investing in the exempt market and to support legitimate venture capital companies raising money for their businesses. This additional disclosure in B.C. should help investors make more informed investment decisions."

The BCSC is requesting public comment on proposed form 45-106F6 British Columbia Report of Exemption Distribution. Commission staff will consider all comments received by November 9, 2010.

The B.C. Securities Commission is the independent provincial government agency responsible for regulating trading in securities within the province. If you have questions, contact Andrew Poon, media relations, 604-899-6880.

Learn how to avoid investment fraud at the BCSC's investor education website:

Contact Information

  • British Columbia Securities Commission
    Andrew Poon
    Media Relations
    604-899-6880 or (Canada) 1-800-373-6393