Reshaping the financing landscape for Canadian public companies, the CSA outlines a major new exemption.
HALIFAX, NS (MINEWEB) – It is just got a whole lot easier for Canadian companies – juniors most notably – to raise money issuing new shares to existing shareholders.
Today the Canadian Securities Administrators (CSA) outlined a new exemption – effective immediately in most provinces in Canada – that lets any shareholder, regardless of net worth or professional background, individually commit up to $15,000 a year to a financing.
Prior exemptions that let people take part in financings were more stringent and limited to people, for example, with net worths over a C$1 million. The new exemption was proposed last year by the TSX Venture Exchange largely in response to tight financing markets for smaller junior exploration companies which mostly depend on financings to fund their activities.
The new exemption will widen the pool of potential investors for juniors and other public companies in Canada.
Indeed, in this, the rule, published Thursday, went further than a proposal floated last year which was limited to TSX Venture companies.The CSA said it would open door for all companies on the TSX Venture, TSX and CSE to use the exemption. Further, it said that in using it, companies were required to allow all its existing shareholders to consider taking part in a proposed financings under the exemption.
“The purpose of the exemption is to facilitate capital raising for listed issuers and foster participation of retail investors in private placements, while maintaining appropriate investor protection,” said the CSA, an organization which represents provincial and territorial securities commissions, in an outline of the new rule.
The exemption is going ahead in British Columbia, Alberta, Saskatchewan, Manitoba, Québec, New Brunswick, Nova Scotia, Prince Edward Island, Yukon, Northwest Territories and Nunavut. Ontario is expected to follow with its own, similar rule, later this month, the CSA has said.
For the rest of this article, click here: http://www.mineweb.com/mineweb/content/en/mineweb-exploration?oid=232890&sn=Detail