Several years ago Visa (the credit card people) did an Initial Public Offering (IPO) the banks were selling off a majority of their interest in the credit card company. Investors across the globe participated in this IPO, this joyous example of capitalism, everywhere but in the Province of Quebec.
You see Quebec has some strange rules, first is the fact that virtually all form of "giveaway contests" are illegal here. The province of Quebec has a monopoly on gambling and makes it very expensive for companies to do these contest. The Quebec government also insist that all prospectus be fully translated into French.
Most people don't realize but French language prospectus do not use capitalized language. You guess the result they become thick bricks that absolutely nobody reads. Most people don't read prospectus anyway -- they are made to be incomprehensible, but in French its even worse because you have to "guess" as to the defined terms (bankers speak).
In virtually all other countries, the full prospectus is only available in English with a brief summary -- which by the way tends to be a lot clearer as to the intent of the investment 5Ws. The reality is that a confluence of politics and lobbying has insured that Quebec based investors will never be able to invest in most of the world's IPO -- although they can buy in the secondary market where no French documents are available... You see Quebec had the option 4 years ago to switch from "legalese" to plain language prospectus (as is found in Australia by the way). Instead of 200 page onion sheet boring run-on sentences that work hard at saying nothing, plain language prospectus are short and to the point. they give investors a clear reason for the transaction what the money is going to be used for, what the company is doing and how well its doing.
Politically the shift in Quebec is impossible, the funny side is that most Quebecers are too poor anyway to participate in IPO, and the rich folks and investment funds set up Ontario based subsidiary that can purchase the IPO. Once again the poor get screwed for political expediency. BTW, and this is the funny part, Quebecers don't get it...
And of course the latest example of Quebec exclusion:
For Immediate Release toCanada News Wire and U.S. Disclosure CircuitTSX SYMBOLS: GTU.UN (Cdn. $) and GTU.U (U.S. $)
NYSE AMEX EQUITIES SYMBOL: GTU (U.S. $)
CENTRAL GOLDTRUST ANNOUNCES PROPOSED OFFERING
TORONTO, Ontario (June 15, 2010) - Central GoldTrust of Ancaster, Ontario announced today that it plans to offer Units of Central GoldTrust to the public in Canada (except Québec) and in the United States under its existing U.S.$800,000,000 base shelf prospectusdated June 8, 2009 and filed with the securities commissions in each of the provinces and territories of Canada, except Québec, and under the multijurisdictional disclosuresystem in the United States pursuant to a proposed underwritten offering by CIBC.
Central GoldTrust will only proceed with the offering if it is non-dilutive to the net asset value of the Units owned by the existing Unitholders of Central GoldTrust.
The entire original amount of U.S.$800,000,000 provided for in the base shelf prospectus is available for this offering.
Substantially all of the net proceeds of the offering will be used for gold bullion purchases, in keeping with the asset allocation provisions outlined in Central GoldTrust’s Declaration of Trust and the related policies established by its Board of Trustees. Any additional capital raised by the offering is expected to assist in reducing the annual expense ratio in favour of all Unit holders of Central GoldTrust...
You see Quebec has some strange rules, first is the fact that virtually all form of "giveaway contests" are illegal here. The province of Quebec has a monopoly on gambling and makes it very expensive for companies to do these contest. The Quebec government also insist that all prospectus be fully translated into French.
Most people don't realize but French language prospectus do not use capitalized language. You guess the result they become thick bricks that absolutely nobody reads. Most people don't read prospectus anyway -- they are made to be incomprehensible, but in French its even worse because you have to "guess" as to the defined terms (bankers speak).
In virtually all other countries, the full prospectus is only available in English with a brief summary -- which by the way tends to be a lot clearer as to the intent of the investment 5Ws. The reality is that a confluence of politics and lobbying has insured that Quebec based investors will never be able to invest in most of the world's IPO -- although they can buy in the secondary market where no French documents are available... You see Quebec had the option 4 years ago to switch from "legalese" to plain language prospectus (as is found in Australia by the way). Instead of 200 page onion sheet boring run-on sentences that work hard at saying nothing, plain language prospectus are short and to the point. they give investors a clear reason for the transaction what the money is going to be used for, what the company is doing and how well its doing.
Politically the shift in Quebec is impossible, the funny side is that most Quebecers are too poor anyway to participate in IPO, and the rich folks and investment funds set up Ontario based subsidiary that can purchase the IPO. Once again the poor get screwed for political expediency. BTW, and this is the funny part, Quebecers don't get it...
And of course the latest example of Quebec exclusion:
For Immediate Release toCanada News Wire and U.S. Disclosure CircuitTSX SYMBOLS: GTU.UN (Cdn. $) and GTU.U (U.S. $)
NYSE AMEX EQUITIES SYMBOL: GTU (U.S. $)
CENTRAL GOLDTRUST ANNOUNCES PROPOSED OFFERING
TORONTO, Ontario (June 15, 2010) - Central GoldTrust of Ancaster, Ontario announced today that it plans to offer Units of Central GoldTrust to the public in Canada (except Québec) and in the United States under its existing U.S.$800,000,000 base shelf prospectusdated June 8, 2009 and filed with the securities commissions in each of the provinces and territories of Canada, except Québec, and under the multijurisdictional disclosuresystem in the United States pursuant to a proposed underwritten offering by CIBC.
Central GoldTrust will only proceed with the offering if it is non-dilutive to the net asset value of the Units owned by the existing Unitholders of Central GoldTrust.
The entire original amount of U.S.$800,000,000 provided for in the base shelf prospectus is available for this offering.
Substantially all of the net proceeds of the offering will be used for gold bullion purchases, in keeping with the asset allocation provisions outlined in Central GoldTrust’s Declaration of Trust and the related policies established by its Board of Trustees. Any additional capital raised by the offering is expected to assist in reducing the annual expense ratio in favour of all Unit holders of Central GoldTrust...
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