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To: Goose94 who wrote (4610)	1/24/2014 10:26:54 AM
From: Goose94	Respond to of 203382

New proposal could aid juniors and help even the playing field for small investors Private placement financings may be opened up to non-accredited investors With so little money flowing into the beaten-down junior mining sector, Canadian regulators are proposing to loosen the restrictions around private placement financings to allow regular joe investors to participate. The proposal, which was published for comment on Nov. 21, lays out the case for opening up private placements to retail investors that already own shares in a company listed on the TSX Venture Exchange, subject to a limit of $15,000 per company each year. The change would help to even out the playing field for small investors, who, at the moment, can only buy shares on the secondary market. Currently, participation in private placement financings are limited to accredited investors – meaning institutions or wealthy or sophisticated individuals. Private placements, which are priced at a discount to market and often include a sweetener in the form of a warrant, have long been the dominant mode of financing for juniors because they do not require companies to do the expensive and time-consuming work of filing a prospectus. While small investors will benefit from the proposal (officially called CSA Notice 45-312: Proposed Prospectus Exemption for Distributions to Existing Security Holders), its main aim is to help cash-starved junior mining companies -- as evidenced by the timing of the proposal. John Kaiser, who runs the respected Kaiser Research Online website and newsletter, says the regulators have come to realize that the institutional money has left the sector and brokers are no longer acting as a connector between retail investors and junior companies. “There’s actually very poor gateway of capital into the treasuries of juniors,” Kaiser says — especially the exploration-oriented companies that have historically been the mainstay of the TSX Venture Exchange. Comments on the proposal, which was put forward by all the provincial and territorial regulators in Canada with the exception of Ontario, are being accepted until Jan. 20. (In its own notice in December, the Ontario Securities Commission said it supported the proposal and will be putting forward a similar proposal, as well as examining whether the exemption should be extended to companies listed on other exchanges.) As of Wednesday afternoon, the British Columbia Securities Commission and the Alberta Securities Commission had received a total of 37 comments. Kaiser worries that supporters of the proposal may not want to submit comments because they will be made public and names will not be kept confidential. On the other hand, he expects the big banks to be vocally opposed, ostensibly in the name of investor protection. “The establishment banks are all deadfast against it because they do not want individuals to be buying penny stocks, especially from treasury, where they’ll actually get warrants that might make some money,” Kaiser says, adding banks prefer to steer investors into their own structured products. The Venture Capital Markets Association (VCMA), www.venturecrisis.org which has been calling attention to the woes of the junior mining sector since it was formed last summer, argues that the proposal doesn't go far enough. The VCMA is opposed to the $15,000 maximum for non-accredited investors, as well as the requirement that they must already own shares in the company before participating in a private placement. “The VCMA recommends that all proposed regulations related to individuals investing in publicly listed venture capital companies should be fully removed, thereby allowing all investors to participate as they desire,” read the association’s comments, published on Jan. 8. While retail investors have abandoned the junior mining space along with everyone else, Kaiser says that independent, Vancouver-based brokers are particularly enthused by a part of the proposal that would allow non-accredited investors to invest more than $15,000 if the investment is deemed “suitable” for them by an independent broker. “They see this as a way to restimulate retail investor interest in this sector,” Kaiser said. What do you think? Would you be interested in participating in private placement financings? Is the proposal too little too late to help juniors?