A study by the Alberta Securities Commission has found that the number of exempt financings doubled in Alberta in the first year following the implementation of new capital-raising exemptions.

In March 2002, the ASC implemented a number of new capital raising exemptions that were intended to make it easier for issuers, particularly small and medium-sized issuers, to raise capital and to make it easier for investors to invest smaller amounts, while still providing appropriate investor protection.

New research from the ASC, with help from the Haskayne School of Business at the University of Calgary, found a 103% increase in the amount of capital raised by Alberta-based issuers via exempt financing in 2003 compared to the same four-month period in 2002.

It also found that the new “accredited investor exemption” allowed investors to reduce their risk by investing considerably smaller amounts per investment than is required under the “$97,000 exemption”. It also discovered that the accredited investor exemption was used more frequently and more money was raised overall than under the $97,000 exemption.

“We are extremely pleased to see smaller and mid-sized companies and investors taking advantage of these new opportunities,” said ASC chair Stephen Sibold. “By reducing the cost and complexity of capital raising, we’ve ensured that all of our market participants – big and small – are able to access an efficient capital market.”

This latest research represents the second part of the ASC’s multi-phase Alberta Capital Market Project. The project is intended to provide better insights into the capital market the ASC regulates, with an eye to focus and enhance its regulatory efforts. The commission says that the information gathered with this project will assist the ASC into identifying priorities and providing input to other regulatory initiatives.