News Release - May 31, 2000
OFFERINGS BY CAPITAL POOL COMPANIES OK'D
The Saskatchewan Securities Commission and the Canadian Venture Exchange (CDNX)
executed an operating agreement today that permits newly created companies with
little cash, no assets and no business operations, to raise a pool of funds
through an initial public offering and achieve a listing on CDNX.
Securities Commission Chair Marcel de la Gorgendière expressed confidence the
conditions of the Capital Pool Companies (CPC) program provide reasonable
assurances to investors placing funds in these types of high risk, start-up
ventures. As a result, the opportunity for abuse is significantly reduced.
The CDNX's CPC program sets out conditions under which funds raised may be used
to identify and evaluate assets or businesses which, when acquired after
shareholder approval (a Qualifying Transaction), give the CPC a regular listing
on the CDNX.
The CPC program has achieved good success since its inception as Junior Capital
Pools. There have been about 1150 CPCs listed since inception. More than 900
have received shareholder approval of a Qualifying Transaction and more than
100 former CPCs are listed on senior exchanges with 19 per cent of Toronto
Stock Exchange listings in the last three years being former CPC issuers.
It is expected Saskatchewan entrepreneurs will be able to use the CPC program
as another tool to raise capital. It provides a small company with a
significant initial shareholder base (at least 300) from which to expand. The
normal prospectus process will be used to raise additional funds as warranted.
For more information, contact:
Marcel de la Gorgendière, Q.C. Ian McIntosh
Chairman Deputy Director, Corporate Finance
Saskatchewan Securities Commission Saskatchewan Securities Commission
Phone: (306) 787-5630 Phone: (306) 787-5867