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left in business. Last year securities regu-
lators in five Canadian provinces adopted
new rules governing a new prospectus
exemption. If certain conditions are met,
non-accredited investors can now par-
ticipate in private placements with listed
issuers. The main condition is that they
receive suitability advice from an IRROC
licenced broker. Until this new policy was
adopted, smaller investors were shut out
of private placement offerings. Sometimes
the terms of this type of financing can be
extremely attractive and often include a
warrant on a unit offering.
By requiring the suitability advice, bou-
tique brokers will likely see an increased
demand for their services.
Many of the smaller firms that are still
in business have been able to grow through
acquisition. These firms are now able to
spread costs over a larger asset base. Some
firms are starting to invest by hiring capi-
tal markets professionals to complement
their over-all service offering. Hopefully
this leads to increases in secondary market
retail participation.
Over the last year there has also been
a slight recovery in the junior resources
space, particularly mining. Statistics
through the end of April, released on May
5 by the TMX Group, indicate that so far
2017 has been a better year than the same
period a year ago as evidenced by a 366%
increase in IPO financings raised and a
446.6% increase in secondary financing
raised on the TSX Venture Exchange.
Perhaps regulators are starting to act
on concerns that have been voiced about
the state of the venture market over the
last few years. There are a great number
of issues which need to be addressed to
attract necessary capital and for successful
ventures to provide returns commensurate
with the risks taken.
n
Derek Wood is the President of Conduit
Investor Relations Ltd. and a licenced Exempt
Market Advisor. Mr. Wood will be publish-
ing articles regularly that will appear on
the Conduit Investor relations web site at
www.conduitir.com. He can be reached at
403-200-3569.
