Download The Alberta Capital Market - Alberta Securities Commission

2016 REPORT
The Alberta
Capital Market
M AY 2 0 1 6
TABLE OF CONTENTS
1. Executive Summary
2. Listed Issuer Markets
Listed Reporting Issuers
Foreign Reporting Issuers
Focus on Listed Reporting Issuers Principally Regulated in Alberta
Analysis of Financings
3. Prospectus-Exempt Markets
Issuers in the Prospectus-Exempt Market
Prospectus-Exempt Financings by Alberta Issuers
Investments in the Prospectus-Exempt Market by Albertans
4.Registration
5. Energy Markets
6. Appendix: Methodology
Listed Issuer Markets
1
5
5
14
16
20
23
23
25
29
34
36
37
37
ABOUT THIS REPORT EXECUTIVE SUMMARY
1. Executive Summary
About this Report
The Alberta Capital Market Report is an annual publication by the Alberta Securities Commission (ASC) that
provides a descriptive analysis of the Alberta capital market in relation to other major Canadian capital markets.
The report offers market context for ASC staff, market participants, and the general public. It includes analysis of
both publicly-available and regulatory data, such as prospectus-exempt financings and Alberta registrants. The
report draws on information from ASC records, the TMX Group Limited (TMX), the System of Electronic Document
Analysis and Retrieval (SEDAR), and Bloomberg Finance L.P. (a financial information service). Combining these
sources allow analysis of:
• all listed reporting issuers1 (RIs) on the basis of principal regulator2 (PR);
• prospectus and prospectus-exempt financings;
• the Alberta registrant community; and
• energy commodity contracts transacted in Alberta.
The Appendix outlines the methodology used to assemble the combined data of reporting issuers.
Alberta Issuers
Alberta-based issuers experienced the effects of low commodity prices in 2015, generally resulting in lower total
market capitalization and financings. Chart 1 shows the number of active Alberta PR reporting issuers listed
on an exchange, which would be considered by many investors to be the “public market.” In 2015, the ASC had
primary regulatory responsibility for 531 such issuers3. Alberta PR reporting issuers represented 14 per cent of
the total 3,858 reporting issuers in Alberta listed on at least one exchange, with a total market capitalization of
$668 billion or 21 per cent of all reporting issuers in Canada. The market capitalization of all listed Alberta PR
issuers declined 19 per cent during the year, although of these issuers, the domestic issuers with Alberta as
PR declined 25 per cent in 2015. Oil and Gas Issuers remained the largest industry in Alberta, with a combined
market capitalization of $372 billion, which was nearly three times large than the next largest industry, Utilities
and Pipelines at $128 billion.
References in this report to reporting issuers means reporting issuers that report in Alberta. There are several ways that an issuer may be a “reporting
issuer” as defined in the Securities Act (Alberta), under section 1 (ccc). Reporting issuers are not required to have listed securities, although reporting
issuers typically do have one or more securities listed on at least one exchange. In addition, issuers are not required to report in all jurisdictions.
2
An issuer’s “principal regulator” is the securities regulatory authority or regulator as determined in Multilateral Instrument 11-102 Passport System.
Most often an issuer’s PR is the securities regulatory authority or regulator of the province or territory in which the issuer has its head office (or for
investment funds in which the investment fund manager has its head office), or to which it has the most significant connection.
3
Unlisted reporting issuers (128 with Alberta PR at December 31, 2015) have not been included because they are not part of the public market and
their market capitalization cannot be determined. However, unlisted issuers raising funds under a reportable prospectus exemption have been
included in the analysis of the prospectus-exempt market. Listed reporting issuers that were cease traded, and therefore not available to be traded,
have also been excluded.
1
THE ALBERTA CAPITAL MARKET – 2016 REPORT
1
EXECUTIVE SUMMARY ABOUT THIS REPORT
2011
Chart 1: Number of Alberta Issuers
2012
2013
2015
AB PR Listed Reporting Issuers
800
AB non-RI Distributing in Prospectus-Exempt Market
715
Number of Issuers
2014
693
600
656
606
563
508
493
484
531
383
400
200
0
2011
2012
2013
2014
2015
Number of Issuers
Chart 1 also illustrates the number of non-reporting (and unlisted)
issuers headquartered in Alberta that actively
AB PR Listed Reporting Issuers
800
raised
capital under an available prospectus exemption during the year. Many investors would refer to this as the
AB non-RI Distributing in Prospectus-Exempt Market
715
“prospectus-exempt
market” or “private
693 market.” In 2015, there were at least 383 Alberta-based, non-reporting
issuers active in the prospectus-exempt market4. Also note
656 that listed reporting issuers regularly access capital
606 121 were active in the exempt
through the prospectus-exempt market. Of the 531 Alberta PR reporting issuers,
600
market.
In 2015, there 563
were a total of 914 active issuers in the Alberta market (either listed on an
531exchange or
508
raising capital in the exempt market) under the
jurisdiction
of
the
ASC,
down
from
18 per
cent
from
1,114 in
493
484
2014. The general decline over the last five years in the number of active Alberta issuers, could be due to a
variety
of reasons, including consolidation among listed issuers, take-overs by foreign entities, or going-private
383
400
transactions, in which cases the issuer may cease to be a reporting issuer. Consolidation may be reflected in the
average market capitalization of Alberta PR reporting issuers, which was $1,257 million in 2015, down a more
modest 7.8 per cent (compared with the decline in market capitalization) from $1,363 million in 2014.
200
The effects
of commodity prices (more correctly, commodity price expectations) were also reflected in financings
generally for Alberta issuers. There are numerous ways that issuers may raise capital from investors, including
through a prospectus or an available prospectus exemption. For example, prospectuses may be for initial
0
public offerings
(IPOs) or subsequent financings for issuers already listed on an exchange, and there are many
prospectus exemptions such as the frequently used accredited investor exemption5. As shown in Chart 2, Alberta
issuers raised $19.3 billion in 2015, which was down 35 per cent from $29.6 billion in 2014. The chart shows
that Alberta PR reporting issuers listed on the TSX or TSXV raised $11.3 billion in 2015 (excluding “private
placements” of listed securities to avoid double counting of the prospectus-exempt financings which would
be reported to the ASC). The chart also shows the total capital raised by Alberta-based issuers in the exempt
market (whether listed or unlisted) was $8.0 billion in 2015. It is important to note this total is not complete as
investment fund issuers that raised capital via exempt distributions in 2014 may report any time up to 30 days
following the its fiscal year-end6.
Non-reporting issuers do not have a “principal regulator.” Thus, this report used the location of the issuer’s head office, as identified on regulatory filings.
See National Instrument 45-106 Prospectus Exemptions for the most commonly available exemptions.
6
On April 7, 2016 the ASC published amendments to National Instrument 45-106 Prospectus Exemptions, which will change the reporting requirement for
investment funds to any time up to 30 days following December 31 each year. The amendments come into force June 30, 2016.
4
5
2
ALBERTA SECURITIES COMMISSION
ABOUT THIS REPORT EXECUTIVE SUMMARY
Chart 2: Total Financings by Alberta Issuers, Reporting and Prospectus Exempt
Alberta Issuers - Prospectus Exempt
Total Financings ($ Billions)
30
20
Alberta PR Issuers on TSX and TSXV
29.6B
27.2B
13.2B
27.6B
13.9B
21.3B
13.1B
19.3B
10.8B
10
14.0B
13.7B
2011
2012
8.0B
16.5B
11.3B
10.6B
0
2013
2014
2015
Chart 3 considers financings by Oil and Gas issuers specifically. Total financings in 2015 in the prospectusexempt market and the listed market by Alberta issuers totaled $13.3 billion, down 25 per cent from
$17.8 billion in 2014. The decline was similar in both markets, with the prospectus-exempt financings down
27 per cent and prospectus-based financings down 24 per cent. However, it is worth noting that financings in
2015 by Oil and Gas issuers were 40 per cent greater than in 2013, when financings totaled $9.5 billion.
Chart 3: Total Oil and Gas Financings by Alberta Issuers, Reporting and Prospectus Exempt
20
Alberta Issuers - Prospectus Exempt
Alberta PR Issuers on TSX and TSXV
17.8B
Total Financings ($ Billions)
17.3B
15.5B
15
8.2B
8.1B
13.3B
7.9B
6.0B
9.5B
10
5.4B
5
9.2B
9.7B
7.7B
7.4B
4.1B
0
2011
2012
2013
2014
2015
THE ALBERTA CAPITAL MARKET – 2016 REPORT
3
EXECUTIVE SUMMARY ABOUT THIS REPORT
Alberta Registrants
In general, market participants that are in the business of trading or advising in securities or managing
investment funds are subject to the registration requirement. Firms are usually principally regulated by the
securities regulatory authority in the jurisdiction where the firm’s head office is located, similar to the principal
regulator concept for reporting issuers. As of the date of this report, there were 124 firms principally regulated
by the ASC, the same as in 2015. Of these firms, 55 were registered in one category, 20 registered in two
categories and 49 in three categories. The most common category of registration was Investment Fund Manager,
with 69 firms, followed by the Exempt Market Dealer Category with 68 firms, the Portfolio Manager category
with 49 firms registered, the Restricted Portfolio Manager category with 34 firms and six firms registered in the
Mutual Fund Dealer category.
Energy Markets
The Oil and Gas industry (56 per cent) and related Utilities and Pipelines industry (19 per cent) accounted for
75 per cent of the market capitalization of Alberta PR issuers. The number of issuers in the Oil and Gas industry
represented 49 per cent and related Utilities and Pipelines 2.4 per cent of the total number of Alberta PR
issuers. These proportions were smaller than 2014 when the Oil and Gas industry accounted for 59 per cent of
the market capitalization of Alberta PR issuers and the Utilities and Pipelines industry accounted for 20 per cent,
or 79 per cent combined. However, the proportion of the number of issuers was similar to 2014, with the Oil and
Gas industry making up 50 per cent of all Alberta PR issuers and Utilities and Pipelines account for 2.5 per cent.
In Alberta, there is an active energy trading market. As an indication of this activity, the total energy contracts
transacted on NGX (Natural Gas Exchange Inc., part of the TMX Group Limited) in 2015 was 12,361 PJ
(petajoules), down 2.7 per cent from 12,705 PJ in 2014. (Note, this decline was considerably less than the
decline in market capitalization or financing activity of Oil and Gas issuers. This is because the trading of
contracts by Oil and Gas issuers is related more to oil and gas production, which increased by about four per
cent in 2015, based on National Energy Board statistics.) The bulk of trading continued to be Physical Canadian
Natural Gas (contracts with physical settlement), which accounted for 89 per cent of total trading on NGX in
2015. The second largest volume of trading was in Physical U.S. Natural Gas at 6.5 per cent of the total.
4
ALBERTA SECURITIES COMMISSION
LISTED REPORTING ISSUERS LISTED ISSUER MARKETS
2. Listed Issuer Markets
This section provides a comparative analysis of the number and size of the listed reporting issuers in Canada
and financings in the public market. The analysis includes all issuers listed on the TSX and TSXV, as well as
issuers listed on other exchanges that are reporting issuers7 in Alberta. The information was based on data
from the TMX, supplemented with data from the ASC, SEDAR, and Bloomberg. Creating more a comprehensive
dataset required some assumptions, such as industry classifications, which are discussed where relevant. The
report’s Appendix contains technical details on methodology and some analysis of the assumptions made. All
data is based on calendar year-end and monetary amounts originally in a foreign currency were converted to
Canadian dollars based on the prevailing spot foreign exchange rate as of December 31, 2015.
Listed Reporting Issuers
Chart 4: Number of Listed Reporting Issuers, by PR
4,190
4,000
Number of Issuers
715
17%
4,264
693
16%
AB
4,146
656
16%
4,022
606
15%
3,858
531
14%
BC
ON
QC
Other
3,000
1,648
39%
1,694
40%
1,656
40%
1,581
39%
1,502
39%
1,421
34%
1,471
34%
1,455
35%
1,492
37%
1,445
37%
2011
2012
2013
2014
2015
2,000
1,000
0
Chart 4 shows the number of listed reporting issuers over the last five calendar years, with a breakdown by the
largest four PRs – Alberta, British Columbia, Ontario, and Québec – and the remaining Canadian jurisdictions
grouped into Other. In 2015, 531 reporting issuers had an Alberta PR, which represented 14 per cent of the total
3,858 listed reporting issuers. This proportion exhibited a decline from a five-year high of 17 per cent in 2011.
British Columbia continued to have the greatest number of listed reporting issuers, as in each of the past five
years, with 1,502 issuers (39 per cent). By comparison, Ontario had 1,445 issuers (37 per cent) and Québec
had 237 issuers (6.1 per cent).
Also noteworthy in Chart 4 is that the number of reporting issuers in Canada has declined each year since 2012,
including by 4.1 per cent in 2015. The number of Alberta PR issuers declined more rapidly than the average in
each of the last two years, including a 5.0 per cent decline in 2015.
See footnote 1.
7
THE ALBERTA CAPITAL MARKET – 2016 REPORT
5
LISTED ISSUER MARKETS LISTED REPORTING ISSUERS
Chart 5: Market Capitalization at December 31 of Listed Reporting Issuers, by PR
3,095B
Market Capitalization ($ Billions)
3,000
2,607B
2,000
1,000
730B
28%
1,163B
45%
0
2011
2,723B
758B
28%
1,235B
45%
889B
29%
1,426B
46%
3,278B
826B
25%
AB
3,149B
BC
668B
21%
ON
QC
Other
1,570B
48%
1,635B
52%
357B
13%
463B
15%
564B
17%
562B
18%
2012
2013
2014
2015
Chart 5 shows that the market capitalization of all listed reporting issuers in Canada (including foreignbased issuers) decreased slightly (3.9 per cent) in 2015 to $3,149 billion from $3,278 billion in 2014. The
market capitalization of listed reporting issuers with a Canadian head office declined 8.0 per cent in 2015 to $2,222 billion from $2,414 billion; this more significant decrease was offset by an increase in the market
capitalization of Canadian-listed foreign reporting issuers, which increased in market capitalization by
7.3 per cent to $927 billion from $864 billion.
Chart 5 shows that the PR breakdown of reporting issuers by market capitalization was quite different than
by number of PR issuers, as were the changes year-over-year. The market capitalization of Alberta PR issuers
declined the greatest of the four provinces in 2015, influenced by the large proportion of Oil and Gas issuers in
the province. Alberta PR issuers had a total market capitalization of $668 billion at the end of 2015 (21 per cent
of the total), down 19 per cent from $826 billion in 2014 (25 per cent of the total). At the end of 2015, reporting
issuers with Ontario PR represented $1,635 billion, or 52 per cent of the total market. Ontario PR listed issuers
were the only group of issuers in Chart 5 to increase in market capitalization, from $1,570 billion in 2014, or up
4.1 per cent. While there were almost as many British Columbia PR issuers as Ontario PR issuers in 2015, as
shown previously in Chart 4, the total market capitalization of British Columbia PR issuers was only $162 billion
(5.1 per cent), down 17.3 per cent from $196 billion in 2014. Québec PR issuers represented $562 billion
(18 per cent) of the total, and comparable to $564 billion reported in 2014 (18 per cent).
6
ALBERTA SECURITIES COMMISSION
LISTED REPORTING ISSUERS LISTED ISSUER MARKETS
Chart 6: Average Market Capitalization of Reporting Issuers, by PR
Average Market Capitalization ($ Millions)
2,500
QC
2,372M
2,000
1,500
AB
1,257M
ON
1,131M
1,000
Other
852M
500
BC
108M
0
2011
2012
2013
2014
2015
Chart 6 shows an unweighted average of market capitalization by PR for reporting issuers. As implied by the
previous two charts, British Columbia PR issuers tend to have a much smaller market capitalization than
issuers in other jurisdictions, as there are many start-up mining companies in the province. British Columbia
PR issuers had an average market capitalization of $108 million at the end of 2015, about one tenth the
average in Ontario with an average market capitalization of $1,131 million. The province with the largest issuer
market capitalization was Québec, with an average of $2,372 million, followed by Alberta at $1,257 million. The
combined jurisdictions in Other had an average of $852 million. The average for Québec issuers, which were
fewest in number of the four largest provinces, was influenced considerably by the Royal Bank of Canada, which
has Québec as PR and had a market capitalization of about $116 billion at the end of 2015. However, excluding
Royal Bank of Canada, the average market capitalization for Québec issuers was 1,889 million at the end of
2015 – still significantly larger than other jurisdictions.
THE ALBERTA CAPITAL MARKET – 2016 REPORT
7
LISTED ISSUER MARKETS LISTED REPORTING ISSUERS
Chart 7: Distribution of Reporting Issuers by Market Capitalization, for 2015
BC
ON
QC
Other
37
35
$10M - $50M
> $250M
43
< $10M
$50M - $250M 28
64
> $250M
40
$50M - $250M 32
< $10M
$10M - $50M
307
> $250M
101
279
$50M - $250M
$10M - $50M
70
> $250M
$10M - $50M
< $10M
> $250M
< $10M
0
< $10M
94
$50M - $250M
207
80
$50M - $250M
110
113
$10M - $50M
500
366
493
1,000
228
Number of Issuers
1,131
AB
As suggested by previous charts, the distribution of reporting issuers by market capitalization was quite different
across the major jurisdictions. Chart 7 shows the distribution of reporting issuers by PR at the end of 2015 by
market capitalization. All jurisdictions exhibited more issuers in the less-than-$10 million market capitalization
category than the greater-than-$250 million category. There were 228 Alberta PR reporting issuers in the lessthan-$10 million category, which was 107 per cent more than the 110 issuers in the greater-than-$250 million
category. However, there were 1,516 per cent more British Columbia PR issuers in the less-than-$10 million
category than the greater-than-$250 million category. This reflects the tendency for British Columbia PR issuers
to have a smaller market capitalization than reporting issuers in other provinces. In contrast, Québec PR issuers
exhibited the least differences between categories of the four largest jurisdictions, as there were only 58 per
cent more issuers in the less-than-$10 million category than greater-than-$250 million. In Ontario, there were
61 per cent more issuers in the less-than-$10 million category than the greater-than-$250 million category.
Compared with 2014 (data not shown), the decline in number of reporting issuers year-over-year (see Chart 4)
was typically exhibited in each category in Chart 7, with the exception of the Other PR issuers, which generally
increased, and the following increases:
• Alberta PR issuers in the $10 million to $50 million category (113 compared with 109),
• Ontario PR issuers in the greater-than-$250 million category (307 compared with 296), and
• Québec PR issuers in the $50 million to $250 million category (32 compared with 26).
8
ALBERTA SECURITIES COMMISSION
LISTED REPORTING ISSUERS LISTED ISSUER MARKETS
Chart 8: Percentage of TSX Listed Issuers that Graduated from TSXV, by PR
52%
Percentage of TSXV Graduates
50%
54%
55%
AB
54%
49%
BC
Other
QC
40%
37%
38%
36%
30%
ON
37%
35%
27%
27%
29%
32%
33%
20%
10%
12%
12%
14%
13%
12%
12%
2012
2013
13%
10%
13%
10%
0%
2011
2014
2015
Chart 8 is based only on TMX data, which has a field indicating whether each issuer listed on the TSX is a TSXV
“graduate.” This means that the issuer was at one time listed on the TSXV exchange and subsequently met the
listing requirements to move its listing to the TSX, Canada’s leading exchange for larger issuers. Alberta and
British Columbia have significant resource-based economies, which are reflected by the industry classifications
of issuers in these provinces (see Chart 11 and Chart 12 for further industry details). Many issuers in Oil and
Gas and Mining begin as small, private issuers and may, in time, progress to be listed on the TSXV, and later
the TSX. Chart 8 shows that at the end of 2015, 35 per cent of Alberta PR issuers listed on the TSX were once
listed on the TSXV. This was exceeded only by British Columbia PR issuers with 55 per cent TSXV graduates.
In contrast, only 10 per cent of Ontario PR issuers and 13 per cent of Québec PR issuers were TSXV graduates
at the end of 2015.
THE ALBERTA CAPITAL MARKET – 2016 REPORT
9
LISTED ISSUER MARKETS LISTED REPORTING ISSUERS
Chart 9: Number of Listings Of Reporting Issuers, by Exchange or Region
Number of Listings
2,000
1,500
1,000
500
TSXV
TSX
Canada Other
United States
Europe
United Kingdom
Australia
Asia
TSXV
TSX
Canada Other
United States
Europe
United Kingdom
Australia
Asia
TSXV
TSX
Canada Other
United States
Europe
United Kingdom
Australia
Asia
TSXV
TSX
Canada Other
United States
Europe
United Kingdom
Australia
Asia
TSXV
TSX
Canada Other
United States
Europe
United Kingdom
Australia
Asia
0
Chart 9 compares the number of listings of Canadian reporting issuers on exchanges in major regions with
listings on the TSX, TSXV and other Canadian exchanges. Issuers may be inter-listed, which means having listings
on multiple exchanges. Listings on the TSX and TSXV were based on data from the TMX while all other listings for
reporting issuers were based on data from SEDAR. Chart 9 indicates a decline in listings on the TSX and TSXV
over the last few years, by about five per cent per year, while listings on other Canadian exchanges and in the
U.S. have increased. Other Canadian exchanges experienced rapid growth during 2012 – 2014, which slowed to
five percent in 2015.
10
ALBERTA SECURITIES COMMISSION
LISTED REPORTING ISSUERS LISTED ISSUER MARKETS
Chart 10: Total Market Capitalization of All Reporting Issuers, by Industry
Financial Services
1,000
Oil and Gas
Market Capitalization ($ Billions)
Diversified Industries
Other Industries
800
Mining
Utilities and Pipelines
600
Communications and Media
Real Estate
Exchange Traded Products
400
Closed-End Funds
200
0
2011
2012
2013
2014
2015
Chart 10 shows how the market capitalization of major industries for all reporting issuers has changed over the
last five years8. Nationally, Financial Services was the largest industry in terms of market capitalization among
reporting issuers in each of the last five years. It reached a market capitalization of $1,029 billion at the end of
2015, up 2.1 per cent from 2014 and represented 33 per cent of the total market. Oil and Gas issuers declined
by 23 per cent in market capitalization to $377 billion at the end of 2015 and represented 12 per cent of the
market. The sharp decline among Oil and Gas issuers for the second year in a row caused the industry to fall to
fourth in rankings, behind Financial Services ($1,029 billion or 33 per cent), Diversified Industries ($489 billion
or 16 per cent), and Other Industries ($441 billion or 14 per cent).
For this analysis, the industry classification by the TMX was preferred, with the SEDAR industry classification used if the issuer was not listed on either the
TSX or TSXV. The SEDAR industry classification was changed to a TMX industry classification when reasonable; otherwise the issuers were classified to
Other Industries. A detailed discussion about this methodology is available in the Appendix.
8
THE ALBERTA CAPITAL MARKET – 2016 REPORT
11
LISTED ISSUER MARKETS LISTED REPORTING ISSUERS
Chart 11: Total Market Capitalization of Reporting Issuers by Industry and PR, for 2015
AB
800
BC
ON
QC
Other
Diversified Industries
Oil and Gas
Communications and Media
Market Capitalization ($ Billions)
Real Estate
600
Exchange Traded Products
Other Industries
Closed-End Funds
Financial Services
400
Mining
Utilities and Pipelines
200
0
As shown in Chart 11, when broken down by PR jurisdiction, regional industry differences become more
apparent. Chart 11 shows total market capitalization by industry and PR for year-end 2015. In this chart, the
dominance of Oil and Gas, and related Utilities and Pipelines, among Alberta PR issuers stands out, despite
the declines in market capitalization of Oil & Gas issuers shown in Chart 10. These industries represented a
combined market capitalization $500 billion (75 per cent) of Alberta issuers. (More specific analysis of Alberta
PR issuers begins on page 16.) British Columbia PR issuers in the Mining industry represented $65 billion
(41 per cent) of the total in British Columbia. Among Ontario PR issuers, Financial Services totalled $801 billion
(49 per cent) of all industries and Diversified Industries totalled $228 billion (14 per cent). In Québec,
$180 billion (32 per cent) of market capitalization was in Diversified Industries, followed closely by $176 billion
(31 per cent) in Financial Services.
12
ALBERTA SECURITIES COMMISSION
LISTED REPORTING ISSUERS LISTED ISSUER MARKETS
Chart 12: Total Number of Reporting Issuers by Industry and PR, for 2015
AB
1,000
BC
ON
QC
Other
Diversified Industries
Oil and Gas
Communications and Media
Number of Issuers
800
Real Estate
Exchange Traded Products
Other Industries
600
Closed-End Funds
Financial Services
Mining
400
Utilities and Pipelines
200
0
Chart 12 shows a breakdown similar to Chart 11, but by number of issuers. Among Alberta PR reporting
issuers, Oil and Gas, including Oil and Gas Services, was still the leading industry, represented by 259 issuers
(49 per cent) out of 531 issuers. This means that while the Oil and Gas industry in Alberta dominated all others
on a market capitalization basis, there were still a significant number of issuers engaged in other industries:
95 (18 per cent) in Other Industries, and 55 (10 per cent) in Diversified Industries. The number of Utilities
and Pipelines issuers ranked sixth at 13 issuers (2.4 per cent), but represented 19 per cent on a market
capitalization basis. A total of 963 (64 per cent) of British Columbia PR issuers were engaged in the Mining
industry followed by 322 (21 per cent) in Other Industries. Ontario PR issuers were perhaps the most evenly
distributed across industries with 357 (25 per cent) issuers in Mining, 338 (23 per cent) issuers in Exchange
Traded Products, 282 (20 per cent) issuers in Other Industries, 177 (12 per cent) issuers in Closed-End Funds
(previously classified as Structured Products by the TMX), and 88 (6.1 per cent) issuers in Financial Services.
In Québec, 79 (33 per cent) issuers were in Mining, 77 (33 per cent) issuers in Other Industries, and 43 (18 per cent) issuers in Diversified Industries.
THE ALBERTA CAPITAL MARKET – 2016 REPORT
13
LISTED ISSUER MARKETS FOREIGN REPORTING ISSUERS
Foreign Reporting Issuers
Chart 13: Number of Foreign Reporting Issuers, by PR
400
Number of Issuers
300
358
362
66
18%
62
17%
100
28%
97
27%
200
100
163
46%
158
44%
AB
345
71
21%
101
29%
138
40%
315
70
22%
93
30%
329
57
17%
BC
ON
QC
Other
86
26%
113
34%
133
42%
0
2011
2012
2013
2014
2015
The percentage of reporting issuers headquartered outside of Canada has ranged from about 7.8 per cent
to 8.5 per cent over the last five years. Chart 13 shows the total number of foreign issuers, determined by
the head office reported on SEDAR. The 329 foreign issuers at the end of 2015 was up 4.4 per cent from
315 issuers in 2014. Also shown in Chart 13 is the breakdown of foreign issuers by PR. The number of
foreign issuers was greatest in Ontario at 113 (34 per cent), followed by British Columbia at 86 (26 per cent),
Alberta at 57 (17 per cent) and Québec at 7 (2.1 per cent). Foreign reporting issuers with Alberta as the PR
represented 11 per cent of all Alberta PR issuers at the end of 2015, which was greater than the national
average of 8.5 per cent.
14
ALBERTA SECURITIES COMMISSION
FOREIGN REPORTING ISSUERS LISTED ISSUER MARKETS
Chart 14: Total Market Capitalization of Foreign Reporting Issuers, by PR
1,000
879B
800
600
648B
646B
178B
28%
193B
30%
270B
31%
400
200
390B
60%
396B
61%
2011
2012
574B
65%
926B
863B
210B
24%
608B
70%
205B
22%
AB
BC
ON
QC
Other
653B
70%
0
2013
2014
2015
As shown in the prior chart, the number of reporting issuers with foreign headquarters in 2015 was smaller
than the number in 2011, by about eight per cent. In contrast, Chart 14 shows that the market capitalization of
foreign issuers has increased by 43 per cent over the last five years to $926 billion in 2015 from $648 billion
in 2011. Some of this increase was attributable to large foreign issuers becoming reporting issuers in Canada.
For example, CNOOC Limited and Ecopetrol S.A. became reporting issuers with Alberta as PR during this time
period and made up 57 per cent of the foreign-headquartered Alberta PR issuers total market capitalization of
$205 billion at the end of 2015. Similarly, the total market capitalization of $653 billion from Ontario PR foreignheadquartered reporting issuers has also been influenced by large issuers like Visa Inc., Barclays Bank PLC,
Credit Suisse AG, General Motors Company, Valero Energy Corporation, and Deutsche Bank Aktiengesellschaft,
which accounted for a combined $515 billion of market capitalization in 2015 or 79 per cent of the foreign
issuers reporting in Alberta with an Ontario PR. It should be noted that not all of these issuers had securities
listed on a Canadian exchange and the market capitalization of the issuers’ listed equity in Canadian dollars has
been used in calculating the totals.
THE ALBERTA CAPITAL MARKET – 2016 REPORT
15
LISTED ISSUER MARKETS FOCUS ON LISTED REPORTING ISSUERS PRINCIPALLY REGULATED IN ALBERTA
Focus on Listed Reporting Issuers Principally Regulated
in Alberta
Chart 15: Total Market Capitalization of Industries for Alberta PR Issuers
607B
Market Capitalization ($ Billions)
600
500
Oil and Gas
Utilities and Pipelines
519B
Diversified Industries
523B
Other Industries
487B
Mining
400
Communications and Media
372B
300
Real Estate
Financial Services
Closed-End Funds
200
168B
Exchange Traded Products
120B
100
102B
0
37B
3B
135B
31B
2011
39B
66B
4B
12B
6B
2012
2013
2014
74B
128B
50B
11B
2015
Chart 15 is similar to Chart 10, except that it includes only Alberta’s 531 listed PR issuers, which had a total
market capitalization of $668 billion at the end of 2015. As expected, Oil and Gas issuers represented the
largest industry on the basis of market capitalization at $372 billion (56 per cent of the total). Oil and Gas
issuers experienced a 24 per cent decline in market capitalization in 2015, extending the 20 per cent decline
in 2014. Despite the steep decline of 39 per cent over two years in this industry, Oil and Gas issuers were
still nearly three times larger than the next largest industry, Utilities and Pipelines issuers, with a market
capitalization of $128 billion at the end of 2015. In Chart 15, Oil and Gas Services were included in Oil and
Gas, which comprised $10 billion of the industry at the end of 2015. By comparison to the Oil and Gas industry
in total, the market capitalization of Oil and Gas Services declined by 60 per cent since 2013 ($25 billion),
exhibiting the sector’s greater operating leverage to crude oil and natural gas price expectations. The remaining
industries in aggregate (i.e. other than Oil and Gas, and Utilities and Pipelines) experienced a 1.8 per cent
decrease in market capitalization in 2015 to $167 billion from $170 billion in 2014, but largely retained the
16 per cent gain it realized in 2014 from $147 billion in 2013.
16
ALBERTA SECURITIES COMMISSION
FOCUS ON LISTED REPORTING ISSUERS PRINCIPALLY REGULATED IN ALBERTA LISTED ISSUER MARKETS
Utilities and
Pipelines
Real Estate
Oil and Gas
Domestic
104
Mining
Financial
Services
Diversified
Industries
Communicatio
ns and Media
Closed-End
Funds
Foreign
2
3
1
3
4
2
2
11
50
38
50
10
15
17
9
14
4
2
4
2
1
1
2
1
12
4
< $10M
$10M - $50M
$50M - $250M
> $250M
< $10M
$10M - $50M
$50M - $250M
> $250M
< $10M
$10M - $50M
$50M - $250M
> $250M
< $10M
$10M - $50M
$50M - $250M
> $250M
< $10M
$10M - $50M
$50M - $250M
> $250M
< $10M
$10M - $50M
$50M - $250M
> $250M
< $10M
$10M - $50M
$50M - $250M
> $250M
< $10M
$10M - $50M
$50M - $250M
> $250M
< $10M
$10M - $50M
$50M - $250M
> $250M
0
9
7
50
51
67
100
28
Number of Issuers
Other
Industries
Chart 16: Distribution of Alberta PR Issuers by Market Capitalization, by Industry and Domicile, for 2015
Chart 16 shows a distribution by industry of the market capitalization of Alberta PR issuers at the end of 2015.
The chart also shows a split by foreign or domestic headquarters. In the case of Oil and Gas (including Oil
and Gas Services), the number of Alberta PR issuers in each of the four market capitalization ranges shown
decreased compared with 2014. The three largest categories were affected disproportionately, as detailed in
Table A, with the number of issuers in the $50 million to $250 million category decreasing by 35 per cent.
Table A: Distribution of Alberta PR Oil and Gas Issuers, 2015 Versus 2014
Number Oil and Gas Issuers
Category20152014
Decline
<$10M
104
109
4.6 per cent
$10M–$50M
50
55
9.1 per cent
$50M–$250M
38
58
35 per cent
>$250M
67
81
17 per cent
Total
259
303
15 per cent
Thirty Oil and Gas issuers (12 per cent) were foreign reporting issuers in Alberta, down from 41 (14 per cent)
in 2014. This was slightly higher than the average of 11 per cent for all Alberta PR issuers in 2015 (12 per cent
in 2014).
THE ALBERTA CAPITAL MARKET – 2016 REPORT
17
LISTED ISSUER MARKETS FOCUS ON LISTED REPORTING ISSUERS PRINCIPALLY REGULATED IN ALBERTA
Chart 17: Total Market Capitalization of Oil and Gas Sectors for Alberta PR Issuers
Oil and Gas Producers
300
Integrated Oils
Market Capitalization ($ Billions)
Utilities and Pipelines
250
Oil and Gas Services
Junior Oil and Gas
200
150
100
50
0
2011
2012
2013
2014
2015
Chart 17 and Chart 18 focus more specifically on the Oil and Gas, and Utilities and Pipelines industries. For this
analysis (explained in more detail in the Appendix), the sub-categorization available in issuers’ profiles on SEDAR
has been used to further refine the classification of issuers listed on the TSX or TSXV reported in Oil and Gas
and Diversified Industries categories by the TMX9. If the industry of a reporting issuer was not listed on the TSX
or TSXV, the classification was based on the issuer’s SEDAR profile. It should be noted that issuers select their
industry classification on SEDAR.
By market capitalization, Producers were the largest Oil and Gas sector among Alberta PR reporting issuers
in each of the last three years. This was despite a 17 per cent decline in market capitalization in 2015 to
$221 billion. Next largest was Integrated Oils, with a market capitalization of $135 billion, a decline of 31 per
cent from the end of 2014. Junior Oil and Gas and Oil and Gas Services were each only a small fraction of either
the Producers or Integrated Oils categories at $5 billion and $10 billion respectively. However, the decline in
market capitalization of these two groups was the greatest at 82 per cent and 60 per cent, respectively.
The TMX includes Oil and Gas Services in Diversified Industries. Oil and Gas Services have been separated from Diversified Industries in this report and
instead included in Oil and Gas.
9
18
ALBERTA SECURITIES COMMISSION
FOCUS ON LISTED REPORTING ISSUERS PRINCIPALLY REGULATED IN ALBERTA LISTED ISSUER MARKETS
Utilities and
Pipelines
Oil and Gas
Services
Oil and Gas
Producers
Oil and Gas
(unspecified)
Junior Oil and
Gas
Foreign
Domestic
55
43
60
12
$50M - $250M
> $250M
11
13
> $250M
$10M - $50M
$50M - $250M
< $10M
2
4
$10M - $50M
7
< $10M
> $250M
$50M - $250M
$10M - $50M
< $10M
> $250M
$50M - $250M
8
< $10M
$10M - $50M
7
> $250M
10
$50M - $250M
$10M - $50M
< $10M
5
> $250M
$50M - $250M
$10M - $50M 1
< $10M
15
20
20
0
25
32
40
2
Number of Issuers
Integrated Oils
Chart 18: Distribution of Oil and Gas Alberta PR Issuers by Market Capitalization and Domicile, for 2015
Chart 18 shows the distribution of Alberta PR issuers in Oil and Gas, and Utilities and Pipelines by market
capitalization for 2015. This chart is similar to Chart 16 except that it shows greater detail for the Oil and Gas
issuers. As expected, there was a greater concentration of Junior Oil and Gas issuers in the less-than-$10 million
range and, conversely, a greater concentration of Oil and Gas Producers in the greater-than-$250 million range.
Compared with 2014 (not shown), the Integrated Oils and Utilities and Pipelines experienced very little change in
the number of issuers, with two fewer issuers each.
THE ALBERTA CAPITAL MARKET – 2016 REPORT
19
LISTED ISSUER MARKETS ANALYSIS OF FINANCINGS
Analysis of Financings
The analysis in this section is limited to the financings of reporting issuers that are listed on the TSX or TSXV.
Similar to the prior section, issuers have been analyzed according to PR.
Chart 19: Total Financings by TSX and TSXV Listed Issuers, by Financing Type
60
56.5B
51.7B
Total Financings ($ Billions)
50
40
9.4B
18%
11.5B
20%
4.4B
8%
7.0B
13%
30
20
35.3B
68%
40.5B
72%
43.6B
7.1B
16%
5.6B
13%
31.0B
71%
57.8B
57.7B
9.2B
16%
11.2B
19%
5.5B
10%
43.0B
74%
Private
Initial Public Offering
Public
6.8B
12%
39.7B
69%
10
0
2011
2012
2013
2014
2015
Chart 19 shows financings over the last five years by issuers listed on the TSX or TSXV. Despite the eight per cent
decline in market capitalization of Canadian listed reporting issuers in 2015 (see page 6), total financings of
$57.7 billion were nearly identical to 2014. The chart also shows financings according to major financing type.
Both the public and IPO financings must be qualified by a prospectus, and could have been grouped together.
However, for this chart IPOs have been shown separately as they represent financings where a previously
unlisted issuer (private issuer) becomes a listed issuer (public issuer). Private financings are those conducted
without a prospectus, where the issuer must have a valid prospectus exemption10. Please note that the private
financings classified in Chart 19 are only for issuers listed on the TSX and TSXV, and only for listed securities.
These private financings represented a relatively small subset of the prospectus-exempt market. For a more
comprehensive analysis of prospectus-exempt markets see the section beginning on page 23.
As shown in Chart 19, the dominant type of financing of these listed issuers has been public financings, often
referred to by investors as “secondary” or “follow-on” financings. In 2015, secondary public financings on the
TSX and TSXV totalled $39.7 billion, representing 69 per cent of the total amount raised, down from 74 per cent
of the total in 2014. Conversely, there were a greater proportion of private financings in 2015 (19 per cent) than
in 2014 (16 per cent) and a greater proportion of IPOs in 2015 (12 per cent) than in 2014 (10 per cent).
Such as those available in National Instrument 45-106 Prospectus Exemptions.
10
20
ALBERTA SECURITIES COMMISSION
ANALYSIS OF FINANCINGS LISTED ISSUER MARKETS
Chart 20: Total Financings by TSX And TSXV Listed Issuers, by PR
60
51.7B
Total Financings ($ Billions)
50
40
30
20
10
0
57.8B
56.5B
15.7B
30%
7.6B
15%
21.4B
41%
15.4B
27%
7.8B
14%
43.6B
11.8B
27%
18.3B
32%
6.0B
10%
4.1B
9%
25.1B
45%
2.8B
5%
4.8B
8%
2011
2012
18.2B
42%
4.1B
9%
2013
25.8B
45%
6.0B
10%
2014
57.7B
12.5B
22%
6.1B
10%
AB
BC
ON
QC
Other
24.5B
42%
11.3B
20%
2015
As shown in Chart 20, listed issuers with Ontario as PR represented the greatest proportion of total financings
at $24.5 billion (42 per cent) in 2015, which was down slightly from $25.8 billion (45 per cent) in 2014. This
proportion was 10 percentage points less than the proportion of total market capitalization represented by all
reporting issuers with Ontario PR at 52 per cent (Chart 5). Alberta PR issuers raised $12.5 billion (22 per cent)
of the total in 2015, nearly one-third lower than $18.3 billion raised in 2014 but in-line with Alberta PR issuers’
share of total market capitalization at year-end 2015 (21 percent). Alberta PR issuers represented 21 per cent
of the total market capitalization. Québec PR issuers raised a total of $11.3 billion (20 per cent) in 2015, which
was more than double the $6.0 billion raised in 2014. British Columbia PR issuers raised a total of $6.1 billion
(10 per cent) in 2015, comparable to 2014. Québec PR issuers represented 18 per cent of total market
capitalization and British Columbia PR issuers accounted for five per cent of total market capitalization.
THE ALBERTA CAPITAL MARKET – 2016 REPORT
21
LISTED ISSUER MARKETS ANALYSIS OF FINANCINGS
Chart 21: Total Financings by TSX and TSXV Listed Issuers, by Industry
60
Total Financings ($ Billions)
50
40
56.5B
57.8B
57.7B
51.7B
6.6B
7.2B
8.8B
7.8B
3.6B
10.1B
30
10.8B
20
11.8B
9.6B
11.2B
10
0
4.5B
2011
6.7B
6.7B
8.8B
Diversified Industries
Mining
Oil and Gas
12.8B
8.4B
Real Estate
Utilities and Pipelines
6.5B
11.6B
8.6B
5.8B
7.2B
5.2B
14.4B
6.6B
9.8B
Communications and Media
Financial Services
43.6B
5.7B
Other Industries
5.4B
7.5B
6.7B
2012
2013
10.0B
8.8B
2014
2015
Chart 21 shows a break down by TMX industry classification for issuers listed on the TSX or TSXV. Over the
last five years, the industries that have collectively raised the greatest amount of capital have been Financial
Services, Mining, and Oil and Gas, with Financial Services frequently raising the most capital of the three. In
2015, Financial Services raised $12.8 billion, which was 45 per cent more than the next greatest categories of
Diversified Industries, Utilities and Pipelines, and Other Industries, which each raised approximately $8.8 billion.
Financings by Oil and Gas issuers listed on the TSX or TSXV ranked third at $8.6 billion. Capital raised by Oil
and Gas issuers declined the most in 2015, by 26 per cent, while Diversified Industries increased the most
(184 per cent) in 2015. 22
ALBERTA SECURITIES COMMISSION
ISSUERS IN THE PROSPECTUS-EXEMPT MARKET PROSPECTUS-EXEMPT MARKETS
3. Prospectus-Exempt Markets
Issuers in the Prospectus-Exempt Market
In Canada, the general requirement for any issuer raising capital by issuing securities is to do so via prospectus.
However, an issuer is permitted to raise capital without a prospectus if it meets the conditions of an available
prospectus exemption. This is often referred to as raising capital in the “prospectus-exempt market.” 11 A number
of prospectus exemptions available in National Instrument 45-106 Prospectus Exemptions require the distributions
to be reported to a securities regulator using the Report of Exempt Distribution12. Those reported to the ASC are
the source for the analysis in this report.
It is important to note that securities law permits investment funds to file 30 days following the fund’s fiscal
year-end. Given that the fiscal year-end may not be the same as the calendar year-end, the data reported
by investment funds for 2015 and available for this report is incomplete. However, the effect of this is more
pronounced when analyzing distributions to Alberta investors than by Alberta issuers, as investment funds tend
to be headquartered outside Alberta.
Chart 22 shows the number of issuers that accessed capital in the prospectus-exempt market in Alberta during
the calendar year (distributed securities to Albertans), independent of the location of the issuer’s head office.
Although the number of issuers in 2015 appeared to be down considerably from 2014, as explained above, not
all data from investment funds is yet available as of the date of this report. In 2014, 2,215 issuers were active
in Alberta, of which reporting issuers made up 669 (30 per cent) of the these issuers. One reason why reporting
issuers may choose to raise capital in the prospectus-exempt market is that it can be a more cost-effective
means of raising funds than in the public market, in which a prospectus is required.
Chart 22: Number of Issuers Active in Alberta Prospectus-Exempt Market During the Calendar Year
2,500
2,000
Number of Issuers
RIs
2,386
2,091
2,075
705
622
868
Non-RIs
2,215
669
1,429
1,500
509
1,000
1,518
1,386
1,453
1,546
500
920
0
2011
2012
2013
2014
2015
The distribution of securities must still occur through proper registration or under a registration exemption. See National Instrument 31-103 Registration
Requirements, Exemptions and Ongoing Registrant Obligations.
12
See part 6 of NI 45-106 and Form 45-106F1 Report of Exempt Distribution.
11
THE ALBERTA CAPITAL MARKET – 2016 REPORT
23
PROSPECTUS-EXEMPT MARKETS ISSUERS IN THE PROSPECTUS-EXEMPT MARKET
Chart 23: Number of Alberta-based Issuers Active in the Market During the Calendar Year
800
206
600
Number of Issuers
RIs
769
Non-RIs
672
662
668
188
169
160
504
121
400
563
484
493
508
200
383
0
2011
2012
2013
2014
2015
Chart 23 shows the number of Alberta-based issuers that accessed capital in the prospectus-exempt market
during the calendar year. Of the issuers that have reported for 2015, 121 (24 per cent) were reporting issuers.
In 2014, 160 (24 per cent) of the Alberta-based issuers active in the prospectus-exempt market were
reporting issuers.
The Alberta capital market is not a closed system. Alberta issuers can distribute securities anywhere in the
world where securities law permits. Similarly, Alberta investors may purchase securities of any issuer, provided
the issuer meets the requirements of Alberta securities laws. Prominent industries also vary by province and
country, where capital raising can occur with or without a prospectus. For these reasons, when analyzing the
prospectus-exempt market it is important, and more informative, to analyze issuers and investors separately,
which is the approach in the following two sections.
24
ALBERTA SECURITIES COMMISSION
PROSPECTUS-EXEMPT FINANCINGS BY ALBERTA ISSUERS PROSPECTUS-EXEMPT MARKETS
Prospectus-Exempt Financings by Alberta Issuers
Chart 24: Total Raised in The Exempt Market by Alberta-based Issuers, by Reporting Type
15
13.2B
Distributions ($ Billions)
10
6.5B
RIs
13.9B
Non-RIs
13.1B
6.7B
10.8B
6.9B
8.0B
5.7B
5.4B
5
6.7B
7.2B
5.1B
6.2B
2.6B
0
2011
2012
2013
2014
2015
For prospectus exemptions that are reportable, Alberta securities law requires Alberta-based issuers to report
exempt distributions to the ASC regardless of the jurisdiction of the investor. This is because distributions to
investors outside of Alberta are considered distributions “from” Alberta. Chart 24 shows the total capital raised
by Alberta-based issuers over the last five years, segmented by whether the issuer was a reporting issuer or nonreporting issuer. Consistently, more than half of the capital raised in the prospectus-exempt market has been
by reporting issuers choosing to rely on a prospectus exemption. This number rose to two-thirds in 2015. Many
of these reporting issuers have securities listed on an exchange, although not all the securities distributed are
listed on an exchange. For example, debt securities are the most common type of security distributed by Albertabased issuers (as discussed on page 27) and are not listed on an exchange.
THE ALBERTA CAPITAL MARKET – 2016 REPORT
25
PROSPECTUS-EXEMPT MARKETS PROSPECTUS-EXEMPT FINANCINGS BY ALBERTA ISSUERS
Chart 25: Total Raised in the Prospectus-Exempt Market by Alberta-based Issuers, by Industry
Mortgage Investment Companies
Industrial
Investment Companies and Funds
Mining
Real Estate
Oil and Gas
Utilities
Other Industries
Distributions ($ Billions)
15
13.2B
13.9B
1.3B
10
1.8B
1.7B
3.6B
13.1B
10.8B
1.4B
1.9B
1.4B
8.0B
2.1B
5
8.1B
8.2B
7.9B
5.4B
6.0B
0
2011
2012
2013
2014
2015
Chart 25 shows capital raised by Alberta issuers in the prospectus-exempt market segmented by industry13. In
Alberta, the most prominent industry over the last five years was Oil and Gas, by a considerable margin, totalling
$6.0 billion in 2015. That said, this amount was 27 per cent less than $8.2 billion raised in 2014.
As previously noted, investment funds may report 30 days following each fund’s year-end. The result is that
the total capital raised by Alberta-based Investment Companies and Funds for 2015 is not yet final and may
be revised in subsequent reports. However, $1.4 billion was raised by Alberta-based Investment Companies
and Funds in 2014, which was down from $2.1 billion raised in 2013. Based on data available for this report,
Investment Companies and Funds raised $0.7 billion in 2015, making it the second largest industry raising
capital in the prospectus-exempt market in 2015. In Chart 25, several industries have been added to Other
Industries14, which many issuers select if none of the other categories apply. In 2015, within the Other Industries
category, the Other selection accounted for $0.4 billion of the categories total of $0.6 billion, down from
$1.8 billion and $1.9 billion, respectively. Year-over-year, Real Estate issuers raised $0.4 billion in 2015,
down from $0.7 billion in 2014.
As identified on the Report of Exempt Distribution.
Bio-tech, Forestry, Hi-tech, and Other. Note that mining exploration/development and mining production have been grouped under Mining in this report.
13
14
26
ALBERTA SECURITIES COMMISSION
PROSPECTUS-EXEMPT FINANCINGS BY ALBERTA ISSUERS PROSPECTUS-EXEMPT MARKETS
Chart 26: Total Raised in The Exempt Market by Alberta-based Issuers, by Investor Location
15
13.2B
AB
13.9B
BC
13.1B
International
Distributions ($ Billions)
3.5B
4.6B
10
10.8B
ON
3.9B
Other Province
2.6B
3.0B
QC
8.0B
1.4B
1.9B
2.3B
U.S.
2.9B
3.3B
5
3.3B
2.8B
0.8B
0
1.4B
5.1B
2.1B
2.6B
2.2B
2011
2012
2013
2.5B
2014
2015
As shown in Chart 26, Alberta-based issuers have typically raised at least one-quarter of capital in the
prospectus-exempt market, in aggregate, from Albertans. Based on data reported to date, the proportion of the
capital raised by Alberta-based issuers from Alberta investors was 36 per cent in 2015, or $2.9 billion. Another
significant source of capital for Alberta-based issuers is from investors based in Ontario and the U.S., which have
a larger institutional investor base. In 2015, $2.5 billion of the funds raised by Alberta-based issuers was from
investors in the U.S., or 31 per cent, which is considerable, although a marked decrease from $5.1 billion in 2014.
Chart 27: Total Raised in the Prospectus-Exempt Market by Alberta-based Issuers, by Security Type
15
13.2B
Other Security
13.9B
0.9B
2.0B
Distributions ($ Billions)
Debt
13.1B
0.8B
Equity
Units
10.8B
5.2B
10
4.6B
7.0B
5.3B
8.0B
1.4B
2.7B
5
3.0B
3.9B
2.2B
2.8B
2.3B
5.1B
2.7B
2.8B
2.6B
2013
2014
0
2011
2012
1.4B
2015
Chart 27 shows a broad breakdown by type of security distributed by Alberta-based issuers. In four of the
past five years (based on distributions reported to date), Debt securities have been the most common type of
securities issued, accounting for 37 per cent of the total in 2015. As more investment funds report distributions
for 2014, distributions of Units will likely increase.
THE ALBERTA CAPITAL MARKET – 2016 REPORT
27
PROSPECTUS-EXEMPT MARKETS PROSPECTUS-EXEMPT FINANCINGS BY ALBERTA ISSUERS
Chart 28: Total Raised in the Prospectus-Exempt Market by Alberta-based Issuers, by Exemption
15
13.2B
Minimum Amount
13.1B
Offering Memorandum
0.9B
Distributions ($ Billions)
Family, Friends and Business Associates
13.9B
Other Exemptions
10.8B
Accredited Investor
10
8.0B
11.5B
1.3B
12.5B
5
11.6B
9.5B
6.2B
0
2011
2012
2013
2014
2015
Chart 28 shows the prospectus exemptions relied on by Alberta-based issuers to raise capital in the prospectusexempt market15. Based on reported distributions to date, approximately $6.2 billion (77 per cent) of the capital
raised was under the accredited investor (AI) exemption, compared with $11.6 billion (89 per cent) in 2014.
In 2015, Other Exemptions accounted for $1.3 billion, compared with $0.6 billion in 2014. Within the 2015 total was $1.1 billion under the Petroleum, Natural Gas & Mining Properties exemption ($0.4 billion in 2014).
Approximately $0.3 billion was raised under the Offering Memorandum (OM) exemption in 2015, the same
as in 2014.
Each of the exemptions shown in Chart 28 are available when specific conditions are met by the issuer.
These conditions may be found in the relevant sections of National Instrument 45-106 Prospectus Exemptions.
However, each of the four exemptions shown in Chart 28 also depend on the circumstances of the purchaser,
summarized in Table B as context to the data in this report.
Table B: Data Sources for Combined Dataset
ExemptionSummary of Certain Provisions Applicable to Individuals
Accredited InvestorIndividuals who are accredited based on exceeding specified income, net
financial asset or net asset thresholds.
Family, Friends and Business AssociatesIndividuals who are a director, executive officer or control person of the issuer,
or of an affiliate of the issuer, and specified family members, close personal
friends or close business associates of such persons.
Offering MemorandumIndividuals who have received a valid Form 45-106F2 Offering Memorandum
of the issuer and are either purchasing not more than $10,000 of the issuer’s
securities or are an eligible investor based on exceeding specified income or
net asset thresholds. Effective April 30, 2016, eligible investors will be subject
to certain investment limits as specified in the exemption.
Minimum AmountIndividuals purchasing a minimum of $150,000 of securities in a single
transaction from a single issuer. Effective May 5, 2015 this exemption was
no longer be available to issuers distributing to individuals.
Specifically shown in Chart 27 are section 2.3 Accredited Investor, section 2.5 Family, Friends and Business Associates, section 2.9 Offering
Memorandum, and section 2.10 Minimum Amount Investment, as well as other exemptions available in National Instrument 45-106 Prospectus
and Registration Exemptions and reported to the ASC under Part 6.
15
28
ALBERTA SECURITIES COMMISSION
PROSPECTUS-EXEMPT FINANCINGS BY ALBERTA ISSUERS PROSPECTUS-EXEMPT MARKETS
Investments in the Prospectus-Exempt Market by Albertans
This section analyzes the capital invested by Albertans versus capital raised by Alberta issuers, which reveals
some significant differences. As shown in Chart 30, the greatest proportion of investments by Albertans in the
prospectus-exempt market from 2011-2014 were investment funds. As noted, because investment funds may
report distributions up to 30 days following the fund’s fiscal year-end, the data reported for 2015 is incomplete.
To give a clearer picture, investments reported for 2014 will be discussed in greater detail in this section.
Chart 29 shows a breakdown by Albertans’ investments in reporting issuers versus non-reporting issuers in
the prospectus-exempt market. In 2014, $12.4 billion (84 per cent) of a total $14.7 billion raised was invested
by Albertans in non-reporting issuers. The proportion of investment in non-reporting issuers by Albertans over
the last five years was much greater than the comparable analysis of Alberta-based issuers shown in Chart
24, which showed that only 47 per cent of Alberta-based issuers were non-reporting in 2014 (47 per cent in
2013). The primary reason for the greater concentration of non-reporting issuers in Chart 29 is that investment
funds distributing securities in the prospectus-exempt market tend to be non-reporting issuers. With regard to
2015, ASC staff estimate that the current total of $6.9 billion may in fact be comparable to capital raised from
Albertans in 2014, given that the total reported for 2014 at the time the Alberta Capital Market report was
released was $6.7 billion.
Chart 29: Total Invested in the Prosectus-exempt Market by Albertans, by Issuer Reporting Type
RIs
14.7B
15
13.4B
Non-RIs
2.3B
1.4B
Distributions ($ Billions)
10
10.2B
1.2B
9.4B
1.0B
6.9B
12.0B
5
9.0B
12.4B
2.1B
8.4B
4.8B
0
2011
2012
2013
2014
2015
THE ALBERTA CAPITAL MARKET – 2016 REPORT
29
PROSPECTUS-EXEMPT MARKETS PROSPECTUS-EXEMPT FINANCINGS BY ALBERTA ISSUERS
Chart 30: Total Invested in the Prospectus-Exempt Market by Albertans, by Industry
Distributions ($ Billions)
15
Utilities
Mortgage Investment Companies
Other Industries
Industrial
Real Estate
Investment Companies and Funds
Mining
Oil and Gas
14.7B
13.4B
1.8B
10
10.2B
1.4B
1.5B
9.4B
1.8B
1.4B
6.9B
1.1B
5
9.2B
6.3B
2.7B
8.9B
1.7B
2.3B
5.9B
1.9B
0
2011
2012
2013
2014
2015
As shown in Chart 30, the greatest proportion of new capital from Alberta-based investors in 2011-2014 was
invested in the Investment Companies and Funds industry. In 2014, $8.9 billion (61 per cent) of investments by
Albertans were in investment funds, compared with 68 per cent in 2013. It should be noted that the 2014 total
for Investment Companies and Funds reported in the 2015 Alberta Capital Market report was $2.1 billion, an
increase of $6.8 billion. Therefore, the preliminary total of $1.9 billion for Investment Companies and Funds in
2015 in this report will likely be revised significantly upward over the following year.
It is not yet known how the total funds invested in the prospectus-exempt market by Albertans for 2015 will
ultimately compare to the total of $14.7 billion in 2014. However, it is possible to compare other industries,
because the reporting deadline for non-reporting issuers is 10 days following a distribution. In 2015, Albertans
invested $2.3 billion in Other Industries (of which $2.2 billion was reported as Other on the Report of Exempt
Distribution); down from $2.7 billion in 2014 ($2.6 reported as Other). Investments in Oil and Gas issuers
decreased to $1.7 billion in 2015 from $1.8 billion in 2014, while investments in Real Estate were $0.7 billion
in 2015, the same as 2014.
30
ALBERTA SECURITIES COMMISSION
INVESTMENTS IN THE PROSPECTUS-EXEMPT MARKET BY ALBERTANS PROSPECTUS-EXEMPT MARKETS
Chart 31: Total Invested in the Prospectus-Exempt Market by Albertans, by Issuer Location
15
Distributions ($ Billions)
13.4B
1.1B
10
10.2B
1.1B
3.5B
2.6B
9.4B
4.6B
AB
BC
ON
3.9B
Other Provinces
QC
0.9B
5.5B
U.S.
5.2B
5
6.9B
1.2B
2.9B
2.9B
2.5B
0
International
14.7B
1.0B
1.1B
0.8B
2011
2012
1.0B
1.9B
2013
0.9B
2.6B
2014
1.4B
0.8B
2015
Chart 31 shows the major jurisdictions where Albertans invested in the prospectus-exempt market over the
last five years. In 2014, $5.2 billion was invested in issuers located in Ontario, which was approximately
35 per cent of the $14.7 billion total raised. Albertans invested $3.9 billion (27 per cent) in Alberta-based
issuers and $2.6 billion (18 per cent) in issuers located in the U.S.
THE ALBERTA CAPITAL MARKET – 2016 REPORT
31
PROSPECTUS-EXEMPT MARKETS INVESTMENTS IN THE PROSPECTUS-EXEMPT MARKET BY ALBERTANS
Chart 32: Total Invested in the Prospectus-Exempt Market by Albertans, by Security Type
Other Security
14.7B
15
13.4B
Debt
2.2B
Equity
Distributions ($ Billions)
1.4B
10
2.2B
10.3B
10.2B
1.4B
0.9B
2.0B
9.4B
1.0B
2.0B
Units
2.1B
2.4B
1.2B
6.9B
1.1B
1.4B
1.3B
5
7.9B
5.9B
8.1B
5.8B
2.5B
2.1B
0
2011
2012
2013
2014
2015
Chart 32 segments the total funds invested by Albertans by the type of security purchased. Based on the significant
investment in investment funds, it is not surprising that the greatest type of security purchased was Units, for a
total of $8.1 billion (55 per cent) in 2014. Non-investment fund issuers typically raise capital through Equity or Debt
securities. In 2015, $1.3 billion of Debt securities were purchased by Albertans in the prospectus-exempt market,
down 38 per cent from the $2.1 billion invested in 2014. In 2015, $2.5 billion of Equity securities were purchased
by Albertans in the prospectus-exempt market, an increase of 4.2 per cent from $2.4 billion invested in 2014.
32
ALBERTA SECURITIES COMMISSION
INVESTMENTS IN THE PROSPECTUS-EXEMPT MARKET BY ALBERTANS PROSPECTUS-EXEMPT MARKETS
Chart 33: Total Invested in the Prospectus-Exempt Market by Albertans, by Exemption Relied On by Issuer
Family, Friends and Business Associates
14.7B
15
Minimum Amount
13.4B
Offering Memorandum
Distributions ($ Billions)
Other Exemptions
10
10.2B
Accredited Investor
9.4B
12.5B
5
9.2B
13.5B
6.9B
1.2B
8.4B
5.2B
0
2011
2012
2013
2014
2015
The most apparent element in Chart 33 is the dominant reliance on the accredited investor (AI) exemption by
issuers to distribute prospectus-exempt securities to Albertans16. In 2014, $13.5 billion (91 per cent) of the total
$14.9 billion was invested by Albertans that qualified as accredited investors. The second greatest amount of
capital raised was under the offering memorandum (OM) and the minimum amount exemptions, which each
totalled $0.3 billion (2.0 per cent) in 2014.
Although the conditions of the exemptions shown here, Accredited Investor, Family, Friends and Business Associates, Minimum Amount Invested, and
Offering Memorandum, are based on the investor, it is still the issuer that relies on the prospectus exemption to distribute the securities. See Table B
on page 28 for a summary.
16
THE ALBERTA CAPITAL MARKET – 2016 REPORT
33
PROSPECTUS-EXEMPT MARKETS INVESTMENTS IN THE PROSPECTUS-EXEMPT MARKET BY ALBERTANS
4.Registration
Market participants must register if they are in the business of trading or advising in securities or managing
investment funds, unless the firm is able to rely on an available exemption17. There are several categories of firm
registration. These include dealer categories, adviser categories and the investment fund manager category.
This section provides an overview of the registered firms that are principally regulated by the ASC and the
categories in which they are registered.
Chart 34: Distribution of Alberta PR Firms by Number of Registration Categories
Number of Registration Categories
Head Office
AB
1
2
3
QC
U.S.
As of the date of this report, there were 124 firms principally regulated by the ASC, the same as a year earlier.
Chart 34 shows how many firms were registered in one, two or three categories. Of all Alberta PR registered
firms, 55 firms (45 per cent) registered in a single category (54 firms in 2015) and, 49 (39 per cent) firms
registered in three categories (50 firms in 2015). Typically, these firms were registered as Exempt Market
Dealers, Investment Fund Managers, and either a Portfolio Manager or Restricted Portfolio Manager. There were
20 firms (16 per cent) registered in two categories (20 firms in 2015), which were typically Investment Fund
Managers and either a Portfolio Manager or Restricted Portfolio Manager.
See National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations.
17
34
ALBERTA SECURITIES COMMISSION
REGISTRATION
Chart 35: Number of Alberta PR Firms in Each Registration Category
69
68
Number of Firms
60
49
40
34
20
16
6
0
Exempt Market
Dealer
Investment
Dealer
Investment Fund
Manager
Mutual Fund
Dealer
Portfolio Manager
Restricted
Portfolio Manager
Chart 35 shows the total number of registrations in each category18. Since firms may register in multiple
categories, please note that the sum of all registrations is not the same as the total number of firms principally
regulated by the ASC. As of the date of this report, the most common category of registration among Alberta PR
firms was Investment Fund Manager, with 69 firms registered (compared to 70 in 2015), followed by Exempt
Market Dealer, with 68 firms registered (71 in 2015). The next most common was Portfolio Manager with
49 firms (46 in 2015) and Restricted Portfolio Manager with 34 firms (36 in 2015). There were also 16 firms
registered in the Investment Dealer category (15 in 2015) and six firms registered in the Mutual Fund Dealer
category (no change).
Categories with zero Alberta PR firms have not been shown.
18
THE ALBERTA CAPITAL MARKET – 2016 REPORT
35
REGISTRATION
5. Energy Markets
12,221
12,705
12,361
2014
2015
13,828
15,161
2013
6,055
4,458
5
U.S. Power
9,154
10
7,142
U.S. Crude Oil
8,422
Physical US Natural Gas
10,495
Physical Canadian Natural Gas
12,714
Financial Canadian Natural Gas
15
3,148
Energy Traded or Cleared (PJ)
Canadian Power
14,367
Canadian Crude Oil
16,349
Chart 36: Energy Transacted on NGX
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
0
Chart 36 shows the total energy contracts traded or cleared on NGX each year since 2001. Total volume
transacted in 2015 decreased slightly to 12,361 PJ, down 2.7 per cent over 2014 when 12,705 PJ was
transacted across various natural gas, crude oil, and power contracts. Combined, natural gas activity amounted
to 96 per cent of the energy transactions on NGX in 2015, down from 97 per cent in 2014. Physical Canadian
Natural Gas (contracts with physical settlement) accounted for 89 per cent of total transactions in 2015, which
totalled 11,003 PJ, similar to the 11,120 PJ in 2014. The second largest volume of transactions was in Physical
U.S. Natural Gas, which totalled 805 PJ in 2015 (6.5 per cent of the total), also similar to 2014 volumes of
839 PJ (6.6 per cent). Financial Canadian Natural Gas (i.e. contracts with financial settlement) decreased to
85 PJ (0.7 per cent) in 2015 from 390 PJ (3.1 per cent) in 2014. Power contracts increased by 32 per cent in
2015. Canadian Power amounted to 283 PJ (2.3 per cent) of total volumes, up from 227 PJ in 2014 while U.S.
Power totalled 184 PJ (1.5 per cent), up from 128 PJ a year earlier.
36
ALBERTA SECURITIES COMMISSION
ENERGY MARKETS
6. Appendix: Methodology
Listed Issuer Markets
For the analysis of listed reporting issuers, data has been combined from ASC records, the TMX, SEDAR and
Bloomberg. This allowed the report to include all listed reporting issuers in Alberta and conduct analysis by
principal regulator, instead of head office location. This section summarizes how this combined data was created
and highlights some differences between key fields.
ASC Records
The ASC maintains a record of all issuers reporting in Alberta, based on reporting by issuers on SEDAR, which
includes issuers listed on the TSX, TSXV and other exchanges. This record includes the following fields of
interest, among others:
•industry;
• location of issuers’ head office;
• issuers’ principal regulator; and
• the exchanges on which the issuer is listed.
TMX Data
The TMX has data for issuers listed on the TSX and TSXV exchanges as of December 31 each year. The dataset
includes the following fields of interest, among others:
• market capitalization at December 31;
• industry, as defined by the TMX;
• location of the issuers’ head office; and
• whether the issuer graduated from the TSXV, in the case of TSX-listed issuers.
Combined Data
Table C shows the primary source for data used in the analysis of listed reporting issuers in this report.
Table C: Data Sources for Combined Dataset
Data Field
Source
Market capitalizationTMX when available, otherwise Bloomberg, with foreign currencies converted into
Canadian dollars as at December 31 based on the spot foreign exchange rate at the
time. Also, the market capitalization from Bloomberg was used when it was more than
two times the market capitalization from TMX.
IndustryTMX when available, otherwise SEDAR. TMX oil and gas, and diversified industries
were segmented for this report based on the SEDAR industry selections.
Principal regulator
ASC records.
TSXV graduate
TMX.
THE ALBERTA CAPITAL MARKET – 2016 REPORT
37
APPENDIX: METHODOLOGY LISTED ISSUER MARKETS
As shown in Chart 37 and Chart 38, the combined data provides a more comprehensive picture of the total
number of reporting issuers and the market capitalization of those issuers.
Chart 37: Number of Issuers by Data Source
Number of Issuers
4,000
4,190
ASC
495
4,264
TMX
3,695
TMX
3,660
TMX
3,588
TMX
3,423
2011
2012
2013
2014
ASC
604
4,146
ASC
558
4,022
ASC
599
3,858
ASC
661
3,000
2,000
TMX
3,197
1,000
0
2015
As shown in Chart 37, the number of issuers included in the data is about 17 per cent greater on average with
the addition of reporting issuers listed on other exchanges. “TMX” indicates the number of issuers for which the
data was sourced from the TMX, and “ASC” indicates the number of issuers for which the data was sourced from
ASC records for purposes of this report.
Chart 38: Market Capitalization of Issuers by Data Source
3,095B
Market Capitalization ($ Billions)
3,000
2,607B
ASC
563B
2,723B
ASC
541B
ASC
748B
3,278B
ASC
757B
3,149B
ASC
848B
2,000
1,000
TMX
2,043B
TMX
2,182B
2011
2012
TMX
2,346B
TMX
2,520B
TMX
2,301B
0
2013
2014
2015
Chart 38 shows that the total market capitalization of all issuers included in the data is about 30 per cent
greater on average with the addition of reporting issuers listed on other exchanges.
38
ALBERTA SECURITIES COMMISSION
LISTED ISSUER MARKETS APPENDIX: METHODOLOGY
Chart 39: Total Market Capitalization by Sedar Head Office (Top) and PR (Bottom) for 2015
AB
BC
ON
QC
850B
Market Capitalization
800
580B
600
462B
400
200
143B
0
AB
BC
AB
BC
ON
AB
BC
ON
QC
Other
BC
ON
QC
Chart 39 shows total market capitalization of issuers in 2015 with the SEDAR-reported head office on the top
axis and the PR on the bottom axis. There are relatively few cases where the two are not the same, with the most
noticeable exception being one large issuer headquartered in Québec with Ontario as the PR. While this report
has been prepared on the basis of PR instead of head office location as in prior reports, the overall conclusions
drawn on the basis of PR should apply to the head office as well.
Utilities and
Pipelines
Technology
SPAC
Real Estate
Oil and Gas
Utilities and
Pipelines
Other
SPAC 1B
80B
91B
Real Estate
Junior Oil and
Gas
Oil and Gas
(unspecified)
Oil and Gas
Producers
Integrated Oils
164B
348B
182B
Mining
80B
Other
Other
Financial
Services
24B
98B
ETP
162B
98B
Closed-End
Funds
Communicatio
ns and Media
Diversified
Industries
Oil and Gas
Services
Other
0
30B
400
200
Mining
Life Sciences
Exchange Traded
Products
Financial
689B
Services
Forest Products
and Paper
Diversified
Industries
499B
600
Other 0B
Market Capitalization
($ Billions)
Capital Pool
Companies
Clean
Technology
Closed-End
Funds
Communications
and Media
Chart 40: Total Market Capitalization by TMX Industry (Top) vs. Sedar (Bottom) for 2015
The industry classifications used by the TMX and SEDAR are different, with greater segmentation in the SEDAR
sub-categories. For those issuers listed on the TSX or TSXV exchanges, the TMX classification was chosen,
with two notable exceptions for the purposes of analysis of the Oil and Gas industry. All Oil and Gas issuers are
grouped by the TMX in one category, while SEDAR has four sub-sectors: Integrated Oils, Junior Oil and Gas, Oil
and Gas Producers and Oil and Gas Services. Where Oil and Gas issuers in the TMX data could be mapped to
THE ALBERTA CAPITAL MARKET – 2016 REPORT
39
APPENDIX: METHODOLOGY LISTED ISSUER MARKETS
SEDAR, the SEDAR industry classification was used for the purposes of greater segmentation. The TMX also
includes Oil and Gas Services in Diversified Industries. For the purposes of this report, these issuers were
reclassified where possible to Oil and Gas Services. In aggregation, Oil and Gas Services were included in the
Oil and Gas category for purposes of this report, not in Diversified Industries.
Chart 40 shows the effect of this reclassification for issuers in the TMX dataset, on the basis of market
capitalization for 2015, with the differences between the TMX and SEDAR classifications distinguished by colour.
The TMX industries are listed on the top axis and SEDAR industries are listed on the bottom. Note that certain
TMX industry categories were classified into Other for purposes of this report.
93B
Utilities and
Pipelines
164B
Real Estate
Oil and Gas
377B
Mining
200B
98B
489B
98B
162B
441B
500
1,029B Financial Services
Communications
and Media
Diversified
Industries
Exchange Traded
Products
1,000
Utilities and
Pipelines
Real Estate
Oil and Gas
Diversified
Industries
Mining
Financial Servic..
Communications
and Media
Diversified
Industries
Exchange Traded
Products
Closed-End Funds
Technology
SPAC
Life Sciences
Forest Products
and Paper
Clean Technology
0
Capital Pool
Companies
Market Capitalization
($ Billions)
Other Industries
Closed-End Funds
Chart 41: Total Market Capitalization by Sedar Industry (Top) vs. TMX (Bottom) for 2015
Note: blanks show additional reporting issuers not classified by the ASC into TMX classifications.
For reporting issuers listed on other exchanges, the SEDAR industry classification was used, with the placement
of issuers into the existing TMX classification where the categories seemed to be consistent. All additional
categories were moved to Other.
Chart 41 shows the main differences of this placement, on the basis of market capitalization, for all reporting
issuers in 2015. The SEDAR classification is shown on top (with sub-categories aggregated) and the TMX category
on the bottom. Note that there are several blanks on the bottom axis. These blanks represent issuers listed on
other exchanges where the SEDAR-reported industry could not be mapped to an equivalent TMX industry.
40
ALBERTA SECURITIES COMMISSION
A L B E R TA S E C URI T I E S . COM
SUIT E 600, 250 – 5T H ST. SW, CALGARY, ALBE R TA, T 2P 0R 4