The great North Securities Commission (NSC), we can do better

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By Ted Liu

You are a private company and have successfully closed a round of financing for much needed expansion capital. Congratulation.

If you rely on exemption for your fundraising, do you know how to file or you will have to spend hard-raised capital to hire a corporate service firm or a law firm to help you?

We are the North, proudly, however, our great North Securities Commission (NSC), comprised of all provincial securities commissions, is nothing to be proud.

Example in illustration. Company/Issuer A raised capital from BC, Ontario, Alberta, Quebec and US and other foreign investors.

Issuer A is required to file separately three times with BCSC, OSC, and SEDAR (for all other provincial commissions other than BCSC and OSC).

To file for the US/Foreign investment other than accredited investors exemption, Issuer A will have to file:

Under BCSC (options)

  1. Distributions to purchasers outside of local jurisdiction (BC, AB, NB)
  2. BCI 72-503 Distribution of securities outside British Columbia
  3. Other exempt types

Under OSC (options)

  1. OSC Rule 72-503 Distributions outside Canada
  2. Other exempt types

Under SEDAR – This is supposedly national. But Alberta, Saskatchewan have their own types for foreign investors. (options)

  1. BCI 72-501 Distribution of securities outside Alberta
  2. SKFSC Rule 72-901 Trades to Purchasers Outside of Saskatchewan
  3. Other exempt types

Which is which?

With so many regulations and emphasis on foreign investments, the sad truth is that provincial regulators are not tracking this value information on foreign money inflows.  How do you deal with large amount of money from Russia, China, Iran, Venezuela, North Korea and other regimes?  Yes, that is right, North Korea! We seriously hope it was an honest filling error.  One fund had just raised large sum from a North Korean investor, according to that firm’s regulatory filing. Should the regulators be aware of this?

Venture capital (VC) financing has always been glamourized and policy devised and emphasized by various levels of governments.  2021 fundraising results are telling a different story.

In 2021, non-fund operating private issuers (excluding VC-backed companies also relying on exemption) raised $39.7 billion, almost three times (2.90) of the record $13.7 billion VC disbursements. Publicly listed issuers raised $151.9 billion in 2021, including $63.3 billion by way of prospectus exemptions. (Source:, CPE Analytics).

To encourage capital formation by private operating companies and investments in junior public companies and support innovations, securities regulators play important roles.  Provincial securities regulators please set aside your differences and work toward a national standardized set of exemption financing types and made easier for issuers to raise and report their fundraising.

Burden reduction must be matched with action.

A NSC – protecting investors while encouraging capital formation for SME growth and innovation – should make Canada proud.

Will you be on board?

Image by Anna from Pixabay