Is This Exemption Suitable? Proposed Suitability Prospectus Exemption

The securities regulatory authorities in British Columbia, New Brunswick and Saskatchewan (the Jurisdictions) have recently proposed a new exemption (the Proposed Exemption) from the prospectus requirements under securities laws that may provide retail investors greater access to the exempt market, while increasing the options available to issuers to raise capital from the public.

Currently, participation in private placements is generally limited to certain insiders or close friends or other individuals related to insiders, as well as accredited investors (who are sophisticated and wealthy investors).

The Proposed Exemption would, subject to certain conditions, allow issuers listed on a Canadian exchange to raise money by distributing securities to any investor who has obtained suitability advice about the investment from a registered investment dealer. This could significantly expand the group of available purchasers in a private placement, as the investor