Page 32 - CCFA Journal - Sixth Issue

Market 市场分析 加中金融

Expanding Opportunities in the Private Markets
Another factor impacting the size of the public markets, which is more indirect, is that regulatory approaches to the private markets
are loosening up. U.S. SEC Commissioner Allison Herren Lee stated in her speech, “Going Dark: The Growth of Private markets and
the Impact on Investors and the Economy”, October 12, 2021:

“Congress and the Commission have steadily relaxed restrictions around private markets in a manner that has spurred their
dramatic growth. As a result, an ever-increasing amount of capital is raised in these markets each year, with private offerings
accounting for approximately 70 percent of new capital raised in 2019. Because of the vast capital available, relaxed legal
restrictions, and greater opportunities for founders and early investors to cash out, companies can remain in the private
markets nearly indefinitely, with some growing large enough to exceed the GDPs of all but the top sector of the world’s
national economies.”

Relaxing requirements to expand the private markets has been due, in large part, to the fact that governments were promoting
innovation. Governments and other market participants recognized that innovation needs access to capital but decreasing IPO exits
is making that capital more expensive and difficult to find. The average lifecycle from startup to IPO has increased from 5 to 10
years.
As a result, many jurisdictions have made changes to the requirements applicable to securities offerings that were not made available
to the public (private market transactions). Previous restrictions on private market transactions were removed or reduced. Companies
have been allowed to sell securities to investors without becoming a highly regulated public company, if the securities were sold to
qualified investors (often known as Accredited Investors’ Exemption). The criteria for qualifying to be an Accredited Investor was set
out in the securities laws and regulations. The criteria for qualifying have recently been expanded in some jurisdictions such as the
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United States and Canada.
In Ontario, the Ontario Securities Commission added the following exemptions from forcing a company to participate in the highly
regulated public markets:

i) when an offering memorandum was used;
ii) for family friends and business associates; and,
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iii) for existing securities holders. From 2017-2019, issuers used these exemptions to raise just over $1 billion in aggregate .

Another challenge to the growth of the public markets comes from the valuation and pricing of securities. Generally, before the public
issuance of the stock, an investment bank is hired to determine the value of the company and its shares before they are listed on an
exchange. In addition to the demand for a company's shares, there are several other factors that determine an IPO valuation, including
industry comparables, growth prospects, and the narrative of a company. Pricing is difficult because there is no observable market
price prior to the offering. If the price is set too low, the issuer does not get the full advantage of its ability to raise capital; and if it is
too high, then the investor will get an inferior return.

私募市场的扩大机会

影响公开市场规模的另一个更为间接的因素是，对私募市场的监管方式正在放松。2021 年 10 月 12 日，美国证券交易委员
会委员艾莉森·赫伦·李在她的演讲《走向黑暗:私募市场的增长和对投资者和经济的影响》中表示:

“国会和委员会稳步放松了对私募市场的限制，这在某种程度上刺激了它们的急剧增长。因此，每年在这些市场上
筹集的资金数量都在不断增加，2019 年，私人募股约占新筹集资金的 70%。由于可获得的巨额投资资本、宽松的
法律限制，以及创业者和早期投资者获得更多套现机会，企业几乎可以无限期地留在私募市场，一些企业发展到
足以超过除世界顶级经济体以外的所有国家的 GDP。”

放宽扩大私募市场的要求，是因为政府在推动创新，他们认识到创新需要获得资本，但 IPO 退出的减少使资本变得更昂
贵，更难找到。从创业到上市的平均周期从 5 年增加到 10 年。

因此，许多司法管辖区对不向公众(私募市场交易)提供的证券发行的适用要求作出了修改。此前对私人市场交易的限制被
取消或减少。如果证券出售给合格投资者(通常被称为合格投资者豁免)，公司可以在不成为受到高度监管的上市公司的情
况下向投资者出售证券。符合资格成为合格投资者的标准已在证券法和条例中规定。在美国和加拿大等一些司法管辖区，
资格标准最近有所扩大。

在安大略省，安大略省证券委员会(Ontario Securities Commission)增加了以下豁免规定:i)当使用发行备忘录时;2)家庭朋友
和商业伙伴;iii)现有证券持有人。从 2017 年到 2019 年，发行人利用这些豁免总计筹集了 10 亿多美元。

5 See JOBS Act.
6 OSC Staff Notice 45-717, Ontario’s Exempt Market (December, 2020).

CCFA JOURNAL OF FINANCE February 2022
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