BCSC ADOPTS NEW PROSPECTUS EXEMPTION

Effective January 14, 2016, the British Columbia Securities Commission (the "Commission") adopted BC Instrument 45-536 - Exemption from prospectus requirement for certain distributions through an investment dealer. Securities regulators in Alberta, Manitoba, New Brunswick and Saskatchewan have adopted similar instruments.

Under this exemption, an issuer may sell securities to retail investors without providing an offering document so long as investors obtain advice regarding the suitability of the investment from a registered investment dealer.

Eligible issuers will be able to use this exemption to sell securities to investors that would not otherwise qualify for commonly used private placement exemptions such as the "accredited investor" exemption or the "family, friends and business associates" exemption.

Other key requirements of the exemption are as follows:

(1) The issuer must be a reporting issuer in a jurisdiction of Canada and have its securities listed on the Toronto Stock Exchange, the TSX Venture Exchange, the Canadian Securities Exchange or Aequitas Neo Exchange Inc.;

(2) The Issuer needs to have filed all of its periodic disclosure and timely disclosure documents as required under applicable Canadian continuous disclosure requirements;

(3) The issuer must issue a news release discussing the proposed offering and how the proceeds of the offering will be spent. The news release must also include a statement that there is no material fact or material change about the issuer that has not been generally disclosed;

(4) Offering materials other than the subscription agreement must be filed with the Commission prior to being provided to investors; and

(5) Investors must be provided with a contractual right of action for rescission or damages in the event of a misrepresentation in the issuer’s continuous disclosure record.

The full text of BC Instrument 45-536 is available here.

For additional information, contact any member of O'Neill Law Corporation. Contact information can be found here.

About O'Neill Law Corporation

O'Neill Law Corporation is a boutique law firm located in Vancouver, British Columbia that focuses on Canadian and U.S. securities law, mergers and acquisitions, corporate law and commercial law. O'Neill Law Corporation has a particularly strong focus on U.S. and Canadian cross-border transactions and issues. Each lawyer at O'Neill Law Corporation is licensed to practice law in British Columbia and at least one jurisdiction in the United States.

The information and links in this post should not be treated by readers as legal advice and should not be relied upon without seeking detailed legal advice.

#BCSC #Exemptions #PrivatePlacement

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