46 | summer 2015 mbabc.ca MORTGAGEBROKER
investmentcap
tape on industry should never be imposed
unless there is a demonstrated need which
furthers public protection. e jurisdiction
of British columbia, which has the most
experience out of any of the provinces with
the om exemption, has not participated in
the proposal to place investor cap restrictions
on the om exemption with alberta,
Saskatchewan, ontario, New Brunswick and
Quebec. regulators should always strive
for "right touch regulation", which protects
the public from harm with the least level of
government burden on industry. Has the NSSc
explored the British columbia om model and
its success in achieving consumer protection
without the intrusive restrictions contained in
the NSSc proposal? If the NSSc has not done
so, we would urge them to review B.c.'s om
model prior to opting for a significantly more
restrictive om regime.
In addition, the rationale appears to be
seriously flawed. Investors will follow the
path of least restriction and ease of access into
investments. Imposing restrictions on Nova
Scotia investors, which are equal to those in
the five other provinces, is likely to cause those
investors to consider investments in all six
provinces as opposed to only those in Nova
Scotia, thereby reducing the amount of capital
flowing to Nova Scotia exempt investments.
capital will leak out of Nova Scotia with
no incentive to draw in capital from other
provinces. It is folly to think that imposing
restrictions in one province to match those
in other provinces will stimulate investor
enticement. Implementation of the proposal
could result in a sudden and dramatic demise
of mIcs and other investment vehicles in Nova
Scotia. Whereas, maintaining the current om
exemption without new restrictions would
keep current investors contributing funds
to mIcs and other investments, and may
even convince investors from the other five
provinces to consider those less restrictive
exempt investments in Nova Scotia. clearly
investor restrictions will strangle current
Nova Scotia investment entities without any
upside and will challenge an already struggling
economy in Nova Scotia.
Failure to Reduce Fraud
e specific goals of the om investor caps are
not entirely clear. are the goals to save investors
from the folly of investing too much of their
hard-earned money in the exempt markets, or
is it an effort to limit the harm to investors from
investor frauds, such as Ponzi schemes or sham
creating
investor caps on
om investments
in Nova Scotia
will not benefit
Nova Scotia.
N
o
va
S
c
o
t
ia
N
o
va
S
c
o
t
ia
