Here is an open letter from Alberta opposition leader, Danielle Smith, opposing proposed Securities Act changes which would severely cut MIC investments Danielle Smith submission to the Alberta Securities Commission (ASC) regarding National Instrument 45-106 Prospectus and Registration Exemptions Relating to the Offering Memorandum Exemption To whom it may concern: While I believe the proposed amendments to National Instrument 45-106 (NI 45-106) are well-intentioned, it is my view they unnecessarily harm thousands of Albertans who invest in the exempt market. The exempt market is reflective of our province’s entrepreneurial spirit and plays an important role in moving Alberta forward. Such a specialized Alberta market allows many Alberta investors to enjoy prosperity they might not otherwise be able to. By limiting the ability of Albertans to invest in the exempt market, the ASC is limiting Albertans’ opportunity to fully participate in Alberta’s economic success. There is absolutely an urgent need for stronger enforcement in regards to fraud as it pertains to the exempt market. In Alberta, enforcement of the rules governing the exempt market appears almost non-existent. Over the last few years, this lack of action has caused more than 25,000 Albertans to lose more than $2.2 billion to fraudsters mostly in real estate offerings. Preventing Albertans who meet the qualifications of an eligible investor from investing at their discretion amounts they deem appropriate will do nothing to prevent fraudulent individuals from breaking the rules and gaming the system. Fraud is obviously unacceptable. More than a year ago, my colleges in the Wildrose called on PC Finance Minister Doug Horner to commit to strengthening the ability of the Alberta Securities Commission to investigate fraudulent investment instruments in the exempt market and to provide additional funding to law enforcement agencies to ensure victims of commercial fraud get their money back. To date, this has not happened. I have stood with my Wildrose colleges and called on the PC government to empower the ASC to work with law enforcement agencies to seize fraudulently obtained funds and return these dollars to Alberta investors. Under existing regulations, the ASC cannot do so. The proposed amendments in NI 45-106 could potentially reduce the amount of funds available to be legitimately raised in the exempt market but would likely have no effect on fraudsters who don’t follow the rules. Many small companies and new ventures that help fuel the provincial economy rely on the private equity made available in these offerings and thousands of Albertans are the beneficiaries. The policy goal of the ASC and the government of Alberta should be to prevent fraud in the provincial exempt market, not to prevent investors from realizing the full returns of Alberta’s economic success. Stricter enforcement of existing regulations and laws will be far more effective in addressing the problem of fraud than will be the introduction of new rules that limit investors opportunities and makes raising capital more difficult for business. Sincerely, Danielle Smith
Posted on: Fri, 20 Jun 2014 22:09:04 +0000
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