Capital continues to move at such a high speed from stringently regulated public markets to the lightly monitored private arena that regulators are scrambling for tighter oversight.
A report to be released this week by the B.C. Securities Commission offered a scathing indictment when it concluded that although “most companies intend to comply with the rules,” nonetheless, “staff found that companies have a poor understanding of the exemptions, do not keep adequate records of their private placements, and use professional advisors who do not have specialized knowledge of the securities industry and the private placement market.” A worrisome trend because more money is being raised by companies in the exempt market than from issuing debt and equity in the public markets.
Consider that B.C. companies raised $6-billion in the province’s public debt and equity markets last year, compared to $33-billion in the exempt market for those operating inside and outside the province during the same time.
Theresa Tedesco – Financial Post – June 19, 2014.
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