Alberta Securities Commission adopts small business finder’s exemption | Proposes Corporate Opportunity Waivers | National Crowdfunding & Fintech Association of Canada

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Alberta Securities Commission adopts small business finder’s exemption | Proposes Corporate Opportunity Waivers

Investment Executive | Nov 10, 2021

Alberta - Alberta Securities Commission adopts small business finder’s exemption | Proposes Corporate Opportunity Waivers The Alberta Securities Commission (ASC) has adopted a new registration exemption for finders to help startups and other small businesses in the province raise capital, the regulator said in a release on Wednesday.

The small business finder’s exemption — proposed in March of this year by the ASC, and effective Nov. 10, 2021 until Nov. 11, 2024 — is intended to help small businesses use finders to raise money. Finders can be individuals or wholly owned companies owned by individuals, the regulator said in its notice, citing feedback it received from commenters.

See:

ASC and FCAA adopt new prospectus exemption to support small business capital raising

ASC Updates Raising Capital for Small Businesses Resource: Fostering Alberta’s New Economy

The new rule replaces the so-called Northwestern exemption, providing a more targeted exemption from the dealer registration requirement for finders.

The new exemption also includes a number of conditions and better integrates with prospectus exemptions that small businesses in Alberta can rely on, the release said. And, it specifically targets businesses raising less than $5 million.

“We recognize that it can be very difficult to find a registered dealer that is willing to help raise money for financings under $5 million,” Stan Magidson, Chair and CEO of the ASC, so this exemption “allows small businesses to use finders to help them identify potential investors, as long as they adhere to specific conditions.”

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Edmonton Journal | Ashley Joannou | Nov 15, 2021

Alberta could become the first province in Canada to offer corporate opportunity waivers as part of new proposed amendment

Proposed amendments to Alberta’s Business Corporations Act would make it easier for directors of private corporations to be involved with multiple related businesses and investments at the same time.

Under the proposed amendments, tabled in the legislature on Monday, Alberta would become the first jurisdiction in Canada to allow corporations to create “corporate opportunity waivers” which set out rules for when directors can be involved in multiple related projects.

See: With $73 million CAD, Symend closes one of the largest Series B rounds in recent Alberta history

Service Alberta Minister Nate Glubish said that often when private equity funds make a large investment in a company they will request a seat or two on the board. At the same time, it is not uncommon for members of these funds to be involved in multiple related businesses that they have an expertise in, he said.

Under the status quo, directors would need permission from the original company they invested in before they could take on another project.

“What the concept of a corporate opportunity waiver would do is it would allow for that company who’s raising that capital to say … we can give you a very narrow and well defined waiver that says in what circumstances you could go in and make these other investments,” Glubish said.

Speeding up the process is a way to attract more business and investment to Alberta, Glubish said.

“The key thing for me is to say, well, as a government we want to try and give Alberta companies as many tools as possible to attract as much capital as possible, especially if they’re attracting it from outside of Alberta. If not having access to corporate opportunity waivers puts certain private equity or venture capital funds out of reach for them, then we’d like to give them this tool,” he said.

While Alberta would become the first jurisdiction in Canada to offer these kind of waivers, similar legislation exists in some parts of the United States.

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NCFA Jan 2018 resize - Alberta Securities Commission adopts small business finder’s exemption | Proposes Corporate Opportunity Waivers The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org