PrefBlog

It has become easier (for some) to buy (some) foreign securities:

Offerings of securities in other jurisdictions are frequently extended to purchasers in Canada on a private placement basis. However, it is generally necessary to include with the foreign offering document a Canadian wrapper that contains disclosure required under the securities legislation of the various Canadian jurisdictions where the offering is made. Also, it may be necessary to obtain relief from certain Canadian securities regulators in order to permit specified disclosure contained in the foreign offering document, such as a listing representation, that is not permitted under local rules. Since most investors in such offerings are sophisticated institutional investors, the value of this additional disclosure and prohibition is questionable. Furthermore, the time and expense associated with preparing a Canadian wrapper has been cited as a significant deterrent to extending foreign offerings to Canadian purchasers.

The Ontario Securities Commission has (a) granted relief to a group of dealers and (b) proposed amendments to the applicable requirements in Ontario that would allow such offerings to be made available to sophisticated investors without a Canadian wrapper.

PROPOSED ONTARIO AMENDMENTS
The proposed amendments apply to the offering of “designated foreign securities”, which include:

• • securities offered primarily in a foreign jurisdiction
• • securities issued by an issuer that is
  • o created under the laws of a foreign jurisdiction
  • o not a reporting issuer in Canada, and
  • o has its head office or principal executive offices outside of Canada, or
• • securities that are issued or guaranteed by the government of a foreign jurisdiction.

…The proposed amendments are open for comment until July 24, 2013 and are available here.
The OSC decision document providing the above relief is available here.

Why is it that self-proclaimed “consumer advocates” are always the ones who oppose the flow of information?

U.S. Securities and Exchange Commission chairman Mary Jo White is pushing to adopt a rule allowing hedge funds to advertise in a move consumer advocates say could fail to protect unsophisticated investors, according to two people familiar with the matter.

White, who became SEC chairman on April 10, has suggested the commission pass the existing plan without major changes and add additional protections later, said the people, who declined to be identified because the deliberations are private. The approach would placate congressional Republicans who have complained the SEC has slow-walked the rule, which was required to be completed by July 2012.

Approving the regulation would allow White to make good on a promise she made in her Senate confirmation hearing to prioritize rules mandated by the Jumpstart Our Business Startups Act, which was designed to boost capital-raising and job creation. At the same time, it could anger advocates for small investors and at least one Democratic commissioner.

“It would be a very bad sign — a cause for grave concern about the substance of the issue and process of how investor protection concerns are addressed,” Barbara Roper, director investor protection at the Washington-based Consumer Federation of America, said in a phone interview. Roper said she discussed the rule with White and other SEC officials on April 23.

It was an uneven day for the Canadian preferred share market, with PerpetualPremiums gaining 1bp, FixedResets winning 23bp and DeemedRetractibles off 1bp. Volatility was minor. Volume was average.

This entry was posted on Saturday, April 27th, 2013 at 3:55 pm and is filed under Market Action. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.