FAIR Canada
FAIR Canada Newsletter

March 2013

FAIR Canada Opposes Equity Crowdfunding

Strong Investor Protection leads to True Capital Formation

 

FAIR Canada has submitted its comments to the OSC on its exempt market review opposing the proposed equity crowdfunding exemption and offering memorandum exemption concepts. Crowdfunding and the OM exemption will undermine investor protection, make markets less efficient, undermine investor confidence in markets and ultimately result in less "real" capital formation for small and medium enterprises ("SMEs"). We suggest that the regulatory resources needed to introduce these concepts and properly police the exemptions in order to prevent widespread fraud would be better spent elsewhere. In particular, regulators should focus on the needs of the hundreds of SMEs listed on the exchanges in Canada that have gone to the effort and cost of complying with regulatory requirements and that are in need of equity financing.

 

Please click here for the full summary of FAIR Canada's comments.

 

Offering Memorandum Exemptions in Participating Jurisdictions

 

FAIR Canada does not believe that investors have the requisite information to make an informed decision in the absence of audited financial statements and recommends that the OM exemption orders issued in Yukon, Alberta, Saskatchewan, Northwest Territories, Nunavut, Manitoba, Quebec, Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland and Labrador be revoked and encourages the CSA to undertake a more critical review of the level of investor protection afforded under the OM exemption, given the serious compliance issues observed.

 

Please click here for the FAIR Canada submission to regulators in response to their Request for Comments.

 

CSA Must Provide Better Registration Check System for Investors

 

In conjunction with national "Check Registration Day", FAIR Canada has written an open letter to the Canadian Securities Administrators ("CSA") calling for a simplified, comprehensive national database to assist Canadian consumers in checking the registration of any person or firm who sells securities or offers investment advice.

 

We fully support national Check Registration Day which encourages investors to check the registration of any person or firm who sells securities or offers investment advice.

 

Please click here to read the rest of the article.

 

IIROC Initiative on Titles and Designations

 

FAIR Canada made a submission to the Investment Industry Regulatory Organization of Canada ("IIROC") supporting guidance regarding the use of business titles and financial designations. The submission stressed the importance of ensuring that titles and designations do not mislead Canadian consumers. We are also writing to the members of the Canadian Securities Administrators recommending that they to follow IIROC's lead in ensuring that titles are not misleading and requiring firms to have policies and procedures in place with respect to business titles and financial designations.

 

Ultimately, what is required is a statutory best interest requirement. For those who are currently not required to act in the best interest of the client, they should be required to use the title "salesperson" (or its equivalent) and not use titles and financial designations that imply that the person is holding him or herself out as a professional providing advice.

 

Emerging Market Issuers: One Step Forward by Exchanges

 

FAIR Canada fully supports the TSX and TSX-V in conducting an Emerging Market Issuers review. FAIR Canada encourages Canadian securities regulators to work together with the exchanges toward ensuring that the appropriate safeguards are in place to protect Canadian investors. We are of the view that the consultation did not provide adequate information or reflect necessary research.

 

Please click here for the full story.

 

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