BC investors get more information about private capital raising
VANCOUVER-- The British Columbia Securities Commission today announced steps it is taking to improve investor protection in the "exempt market". It will require more disclosure from companies that raise money in BC's securities markets under prospectus exemptions.
Following a review and consultations with investors and industry participants, the BCSC will require companies that raise money in the exempt market to disclose more about their directors, officers and other insiders, promoters, finders and purchasers. The new requirements will come into effect on October 3, 2011.
"Typically, if someone is buying shares in a private company in the exempt market, there is very little information available to them," said BCSC Chair Brenda Leong. "The new disclosure requirements are another step in our integrated strategy to protect investors from the risks associated with investing in the exempt market, and to support the integrity of legitimate venture companies raising capital in this market."
The BCSC plans to replace an existing disclosure form used by other Canadian jurisdictions with a new form that includes the increased disclosure requirements. The new form will require private companies to disclose information about their insiders and promoters and will require both public and private companies to disclose whether anyone who purchases their securities, or finds investors for them, is an insider or is registered under the Securities Act. All purchaser information will be available to the public, except for contact and financial information.
"The additional disclosure will help current and prospective investors make more informed investment decisions when considering exempt market securities, and support our increased regulatory scrutiny of this higher risk market," concluded Leong.