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Alberta and Saskatchewan securities regulators adopt new small business financing prospectus exemption

ASC and FCAA | Aug 31, 2021

Raising capital new exemption - Alberta and Saskatchewan securities regulators adopt new small business financing prospectus exemption

Calgary – The Alberta Securities Commission (ASC) and the Financial and Consumer Affairs Authority of Saskatchewan (FCAA) today adopted a new prospectus exemption designed to facilitate greater access to capital for Alberta and Saskatchewan businesses.

“This exemption joins the self-certified investor prospectus exemption adopted in March 2021, and is the next step in our broader efforts to support innovation and diversification in our provinces,” said Stan Magidson, Chair and CEO of the ASC. “This initiative is intended to address challenges faced by small and early stage businesses in accessing capital, while still addressing investor protection,” added Roger Sobotkiewicz, Chair and CEO of the FCAA.

The new small business financing prospectus exemption allows Alberta and Saskatchewan businesses to raise up to $5 million from the public using a simple, streamlined offering document. The exemption has tiered offering limits depending on whether financial statements are provided to investors.

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To mitigate the risks to investors, investments are limited, with higher limits possible if financial statements are provided or if the investor either has a certain minimum income or has received investment advice from a registered dealer. The investment limits do not apply to investors who qualify to invest under certain other common prospectus exemptions.

The exemption is being implemented on a three-year pilot basis. Details of the new exemption are set out in CSA Multilateral Notice of Implementation 45-539 Small Business Financing available on the websites of the ASC and the FCAA.

The CSA, the council of the securities regulators of Canada’s provinces and territories, co-ordinates and harmonizes regulation for the Canadian capital markets.

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