Securities Act (Alberta)

skyline-calgary-866032_1920

On December 1, 2016, the Alberta Securities Commission (ASC) will be replacing the current fee rule in Alberta with ASC Rule 13-501 Fees (ASC Rule 13-501) which will increase registrant and capital market activity fees, and for the first time in Alberta, will introduce a participation fee model.

Any issuers that are currently a reporting issuer in Ontario are already familiar with the concept of a participation fee.  The participation fee is an annual payment based on the capitalization of the issuer (the larger the issuer’s capitalization is, the larger the fee is).  The ASC participation fee will be payable at the time that the issuer files its annual financial statements on SEDAR.  Under the ASC’s current fee rule, the maximum an issuer would pay when it file its annual financial statements is $2,400 (which is the amount paid by short form eligible issuers).

As a result of the introduction of the new participation fee model, any reporting issuer with a capitalization of over $50 million will see an increase in the payment that it submits to Alberta with its annual financial statements.  In some cases, issuers will see a significant increase as the maximum amount payable under the participation fee model is $48,000.

Types of Reporting Issuers

The ASC participation fee rates are based on the type of reporting issuer it is – either a Class 1 reporting issuer, a Class 2 reporting issuer, a Class 3A reporting issuer or a Class 3B reporting issuer.  Each type of reporting issuer is defined below:


Continue Reading

Determining whether something is material can be a perplexing and challenging task for clients and lawyers, even at the best of times – all the more so when you consider that whether you get it right or not can have some serious legal consequences. The concept of “materiality” is a cornerstone of securities laws and it is the foundation on which the integrity of the capital markets is based. It is the basis for determining what needs to be disclosed

  • in offering and disclosure documents such as prospectuses and offering memoranda,
  • in information circulars sent to shareholders to enable them to make informed decisions on matters affecting a corporation,
  • to meet a reporting issuer’s continuous disclosure obligations, and
  • for the integrity of the market place not to be compromised, to ensure that no participant in the market place be in possession of a material fact that has not been generally disclosed.

It is a conundrum, therefore, why something as important as “materiality” is in securities law can, most times, be so difficult to determine.  The difficulty stems from the requirement that in order for something to have constituted either a “material change” or a “material fact”, there has to be an assessment by the client of whether the fact or the event would reasonably be expected to have a significant effect on the market price or value of a security of the issuer [1].  Lawyers are not particularly adept in assisting on that, not having been taught the subject in law school, and the law on this matter is unclear and not particularly helpful to lawyers when they are asked to provide advice to clients on the matter, as each situation must be judged on its own merits.
Continue Reading