CSA has proposed amending rules on prospectus and registration exemptions.
These changes will create unnecessary compliance burden, says the Alternative Investment Management Association in a comment letter, adding that burden will be exacerbated by inconsistent reporting requirements across Canada.
AIMA says the amendment proposes forms that are too complex. Issuers are “already finding it extremely difficult to cope with the amount and pace of regulatory change,” AIMA writes.
And, the amendments don’t harmonize rules across Canada, since there are different regimes for Ontario and B.C. AIMA says that’s a setback for regulatory streamlining, and requests the CSA further standardize rules.
Another change would remove the minimum amount reporting exemption for people investing more than $150,000, since CSA argues it “may not be a proxy for sophistication or ability to withstand financial loss […] and may encourage over-concentration in one investment.” But instead of taking it away, AIMA argues that regulators should verify suitability of investments through compliance audits.
There are some benefits to the amendments, says AIMA. The association is in favour of a financial asset test for individual accredited investors, and it’s pleased that family trusts are now considered accredited investors.