Alberta businesses stand to gain greater access to funding through proposed new capital-raising rules announced by securities commissions in Alberta and British Columbia.

The Alberta Securities Commission and the B.C. Securities Commission last week revealed new rules developed as a response to industry concerns that the cost of raising money is too high, especially for small and medium-sized businesses.

“The new rules will make it easier and less expensive for issuers to raise capital in Alberta and British Columbia and should particularly benefit small business,” Alberta commission chairman Stephen Sibold said in a statement.

The proposed rules provide new and expanded exemptions from the current prospectus disclosure requirements, which usually apply to issuers who are raising money from the public.

“The current capital-raising costs can be particularly burdensome to the junior companies that make up a significant portion of the Alberta and BC capital markets,” the exchanges said.

The four proposed harmonized exemptions are:

* Offering Memorandum Exemption: Allows issuers to raise any amount of money from anyone provided that the investor acknowledges the risks of investing through an offering memorandum — a short, simple disclosure document.

Investor-protection provisions will also be added, giving purchasers almost identical rights to those they get under a prospectus.

* Accredited Investor Exemption: Allows issuers to raise any amount of money from various financial institutions, pensions, investment dealers, established companies and wealthy individuals without a disclosure document.

* Family, Friends and Business Associates Exemption: Allows issuers to raise any amount of money from family members, close friends and close business associates without a disclosure document.

* Private Issuer Exemption: Increases the ability of private companies to raise money while remaining private.

The proposals can be found online at the ASC and BCSC websites and public feedback is encouraged until Nov. 30.

Web Watch:
www.albertasecurities.com
www.bcsc.bc.ca