IIROC FAS Conference. Paul C. Bourque Executive Director British Columbia Securities Commission

Size: px

Start display at page:

Download "IIROC FAS Conference. Paul C. Bourque Executive Director British Columbia Securities Commission"

Owen Franklin
5 years ago
Views:

1 IIROC FAS Conference Paul C. Bourque Executive Director British Columbia Securities Commission

2 Table of Contents CSA Policy Initiatives Update BC Capital Markets Update BC Use of Predictive Analytics in Managing Regulatory Risk National Filing Systems Rebuild Project Cooperative Capital Markets Regulator Update 2

3 CSA Policy Initiatives Update

4 Review of Registrant Client Relationship Issues CSA discussion of best interest standard continues Staff identifying problems with registrant client relationships: Review of over 100 source documents Interviewed experts on registrant client relationship 4

5 Measuring CRM2 and Point of Sale BC Leading project proposal to measure investor benefits from CRM2 and point-of-sale initiatives Desired outcomes for investors, advising representatives, and firms Plan and research methodology being developed 5

6 Mutual Fund Fees Reform 2012 CSA paper identified potential investor protection and fairness issues Independent research retained regarding feedback on CSA paper Brondesbury Group research published June 2015 Douglas J. Cumming Research to be published September

7 Exempt Distribution Harmonization Project BC has unique exempt distribution report Facilitates making investor information public Tied to unique electronic filing system and risk models CSA heard call to harmonize One national, more structured form by mid-2016 New national filing system by

8 BC Capital Markets Update

9 Overview of Amounts Raised* In billions $ BC companies private placement market Non-BC companies private placement market BC companies public market BC investment funds public market *Includes amounts raised by BC companies in BC and elsewhere and by non-bc companies in BC private placement market For calendar years 2012, 2013, & 2014 (from BCSC data) 9

10 Number of Public Companies and Funds Based in BC Number of companies TSX-V Other* TSX Investment Funds (unlisted) CSE *Active public companies including those listed on other markets (OTCBB, Pink Sheets) as well as unlisted companies. As at December 31, 2012, 2013, & 2014 (from TSX, TSX-V, CSE, & BCSC data) 10

11 Distribution of Canadian Listed Companies by Province Number of companies Ontario BC Alberta Quebec As at December 31, 2012, 2013, & 2014 (from TSX, TSX-V, and CSE data) 11

12 BC s Place in the Private Placement Market

13 Amount Raised by TSX, TSX-V, and CSE Companies in Private Placement Market by Province* In millions $ TSX In millions $ CSE In millions $ 1,800 1,500 1, TSX-V BC Alberta Ontario Quebec *Includes private equity financings, and convertible or other offerings, that are reported to the exchanges For calendar year 2012, 2013, & 2014 (from TSX, TSX-V & CSE data) 13

14 Overview of Amount BC Private Companies Raised in Placement Market in 2014 in BC and Elsewhere $9.34 BC companies $20.62B All companies $13.2B BC companies 20.6B $11.72B Non-BC Companies $4.0BPublic companies $4.8B Public companies $8.4B Private companies $3.0B TSX companies $1.2B TSX-V companies $0.1B CSE companies $0.5B Other public companies For 2014 calendar year (from BCSC filings as of April 9, 2015) 14

15 Amount Raised by BC Public Companies in Private Placement Market by Industry in BC and Elsewhere In millions $ Mining & Exploration Oil & Gas Tech & Bio-Tech Other* *Includes investments, finance, real estate, transportation, utilities, etc. For calendar years 2012, 2013, & 2014 (from BCSC filings as of April 9, 2015) 15

16 Amount Raised by BC Other Private Businesses* in Private Placement Market by Industry in BC and Elsewhere In millions $ Real Estate Mortgage Investment Companies Mining Tech & Bio Tech Other** *Private companies that exclude investment companies and funds **Includes paper & forest products, junior industry, oil & gas, etc. For calendar years 2012, 2013 & 2014 (from BCSC filings as of April 9, 2015) 16

Number of BC Private Companies* Raising Money and Amount Raised in BC Private Placement Market** by Exemption Number of companies 250 200 150 Number of Companies In millions $ 7000 6000 5000 4000

17 Number of BC Private Companies* Raising Money and Amount Raised in BC Private Placement Market** by Exemption Number of companies Number of Companies In millions $ Amount Raised Accredited Investor Offering Memorandum Friends, family & business associates $150,000 minimum Other*** *Include large investment funds and other private funds based in BC **Includes only money raised in BC under BC exemptions ***Includes asset acquisition, shares for debt, and distribution of securities outside BC For calendar years 2012, 2013, 2014 (from BCSC filings as of April 9, 2015) 17

18 Reducing Regulatory Burden Existing Security Holder Exemption Published for comment in November 2013 and adopted March 2014 Overwhelming support from industry Provides issuers with an additional source of capital Crowdfunding Exemption Published for comment in March 2014 and adopted May 2015 Exemption that allows start-ups and early stage companies to raise capital Conditions in place for investor protection 18

19 Reducing Regulatory Burden (cont.) Changes to Rights Offering Regime Significant changes to rights offering regime published in November 2014 To be adopted in December 2015 One of the fairest ways to raise capital as participation is pro rata Changes will reduce time and cost of rights offerings Proposed Investment Dealer Exemption Proposed exemption published for comment in April 2015 Would allow issuers to raise money from investors who have obtained suitability advice from an investment dealer Suitability advice key to investor protection 19

20 BC Use of Predictive Analytics in Managing Regulatory Risk

21 BCSC Use of Predictive Analytics in Managing Regulatory Risk 5,000 filings a year from private companies Rules limit who can invest: are issuers following them Offering memorandums: are they compliant Old process had staff looking at limited data We wanted a way to better target which companies we would review for compliance 21

22 BCSC Use of Predictive Analytics in Managing Regulatory Risk Amount invested of # investors 6 risk indicators i.e.: Total capital raised over $1M in last year Director & officer history 5 risk indicators i.e. Past cases in ECM Use of specific exemptions 11 risk indicators i.e.: Over 50 friends and family investors in last year Finder history 7 risk indicators i.e. Past cases in ECM Issuer history 5 risk indicators i.e. CTO issued in past Investor demographics 4 risk indicators i.e. Significant number of purchasers on filing from small communities 22

23 National Filing Systems Rebuild Project

24 National Filing Systems Rebuild Project Core Systems Redesign SEDAR CTO EDER DPL (p1) E-Filing (OSC) Release 1a Data Mapping, User Security, Roles Definition DDS (for SEDAR) SEDI NRD DDS (for SEDI) SEDI NRD Release 1b NRD NRS NRS DPL (p2) DPL (p2) DDS (for NRD) E-Filing (AMF) Release 2 Release 3 (out of scope) XBRL, ETC. 24

25 National Filing Systems Rebuild Project Core Systems Redesign As Is To Be 25

26 Cooperative Capital Markets Regulatory System Update

27 Cooperative System Update Milestones September 19, 2013 July 9, 2014 September 8, 2014 September 8, 2014 October 9, 2014 December 19, 2014 April 16, 2015 April 16, 2015 July 24, 2015 August 25, 2015 Governments of BC, Ontario and Canada agree to establish CCMR Saskatchewan and New Brunswick join CCMR MOA formalizing terms of CCMR Draft uniform PCMS and complementary federal CMSA published for comment PEI joins CCMR Comment letters posted Yukon joins CCMR Nominating Committee for Board Candidates announces Neil de Gelder, Q.C. (BC) Interim Board Chair, Bill Black, announced Revised consultation draft CMA and draft initial provincial/territorial regulations published 6

28 What s to Come Remaining Board Members to be appointed CMA and Regulations Capital Raising Exemptions Fees CMRA/CSA interface CMSA to be published for comment Capital Markets Regulatory Authority (CMRAQ) Act and Provincial Implementation legislation Launch fall

29 Questions? 29

Ontario Commission des FOR IMMEDIATE RELEASE. Commission de l Ontario February 19, 2015 EXEMPT MARKET REVIEW

Backgrounder Ontario Commission des FOR IMMEDIATE RELEASE Securities valeurs mobilières Commission de l Ontario February 19, 2015 20 Queen Street West 22 nd Floor Toronto, ON M5H 3S8 EXEMPT MARKET REVIEW