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PDAC comments on CSA Notice and Request for Comment - Proposed Amendments to National Instrument 45-106 Prospectus and Registration Exemptions (NI 45-106)

PDAC is concerned about proposed changes to NI 45-106 which would make it more difficult and costly for our members to access the capital markets. The PDAC agrees with the CSA that “some individual investors may not understand the risks of investing under the AI Exemption.” We also agree that “…the MA Exemption may not be a proxy for sophistication or ability to withstand financial loss.” However, certain changes to the proposed Rule could potentially increase regulatory costs and complexity, particularly for junior issuers without providing the investor protection that the rule is aiming to achieve.

Two aspects of the proposed changes are of particular concern: one – they impose obligations on issuers more akin to those expected of registrants by raising liability concerns that seem unwarranted. Two – implementation of the rules (as proposed) will likely create undue administrative and implementation costs.

For more details please see our submission here.