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immediate, negative impact in the market- place" for issuers and others in Ontario, because the universe of accredited invest- ors will shrink. In the EMDA' more pressing issue is addressing the OM exemption in the review, with a view to nationalizing it. "This is a very, very important exemption that Ontario should be seriously looking at," he says. While the percentage of Canadians s view, the who qualify for exemptions is report- edly small, some stakeholders say a review in the absence of data relating to the exempt market in Canada is also concerning. "Without appropriate data regarding the exempt market, including growth or decline over the past years, the size of the market, the use of specific exemptions in each province, it's dif- ficult to assess the impact of changes to the minimum amount and accredited investor exemptions," says Davis. Also on the minds of many stakehold- ers are developments to facilitate capital raising in the United States, for example, the Jumpstart Our Business Startups Act, which allows for crowd funding, where entrepreneurs can raise equity capital from a large pool of small investors, who may or may not be accredited by the Securities and Exchange Commis- sion. "The U.S. is undergoing some fairly dramatic changes with the introduc- tion of crowd funding in particular, and what this review does not do is suggest any changes to our existing regime that would mirror some of those dramatic changes happening in the U.S. or even start the dialogue, pretty sharp eye to what is happening south of the border, but he explains they are having trouble, from the investor- protection standpoint, believing this is the best way to go in Canada. "I do not think yet there's an inclination to be headed in this direction, but we have an open mind and certainly be inter- ested in watching what happens in the United States over the next while with their experience. If it proves to be useful and that there hasn't been a significant investor protection difficulty issue, then we' Regulators, says Rice, always have a " says Johnson. he says. tions review is a matter of balance for the CSA, as well as stakeholders, when it comes to ensuring both investor protec- tion and efficient capital markets. With many comment letters received Ultimately, the prospectus exemp- from concerned parties, there is much to be reviewed with respect to the exemp- tions, says Rice, who adds the CSA has a sense that Ontario may want to have a look at some broadening of its exemp- tion parameters, so the review may be wider than originally defined. "It's a matter of trying to find some balance, where people are left to their own deci- sion-making but we feel we've added an appropriate level of investor protection and this is a tough area, because really we're being asked to protect people from themselves," he says. d certainly take a harder look at it," www.CANADIAN Lawyermag.com JUNE 2012 45 LL-PROMO_CL_Mar_12.indd 1 12-02-15 2:28 PM

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