Canadian investors will be exempt from new United States investment regulations that require government oversight of foreign investments in US businesses focused on “critical technologies,” infrastructure, and sensitive personal data.
Canada, Australia, and the United Kingdom are the only three foreign states that are “excepted.”
On Monday, the US Department of the Treasury’s Committee on Foreign Investment in the United States (CFIUS) released the final two regulations needed to implement changes brought about by the Foreign Investment Risk Review Modernization Act (FIRRMA), which was passed in August 2018.
FIRMA was passed in order to close gaps between the types of transactions that CFIUS was able to review, and those it was not able to review, aiming to address national security concerns more effectively. Under the new regulations, certain investment into US businesses from foreign investors will now be reviewed and need clearance from the CFIUS panel.
In the statement on Monday, CFIUS revealed that Canada, Australia, and the United Kingdom are the only three foreign states that are “excepted” from the new regulations that are set to come into effect on February 13.
The announcement follows an outcry from the Canadian investment community, which saw Canadian organizations pen an open letter to the US Department of the Treasury in July. The Canadian Venture Capital and Private Equity Association (CVCA), BIOTECanada, the Canadian Chamber of Commerce, and Medtech Canada called for Canada to be exempt from the reviews, noting that as a close ally to the US, Canada “does not present national security challenges.”
Kim Furlong, CEO of the CVCA, told BetaKit in July that FIRRMA put the ability of Canadian VCs to participate in US deals because of the potential for any review process to cause delays. Several Canadian VCs have called the regulations a protectionist policy by the Trump administration.
The open letter recommended an exemption process using the Country Specification provision in FIRRMA. CFIUS appears to have taken public comments into account and has developed a list of excepted foreign states. CFIUS stated that it chose Canada, Australia, and the United Kingdom “due to certain aspects of their robust intelligence-sharing and defence industrial base integration mechanisms with the United States.”
“Because this is a new concept with potentially significant implications for US national security, CFIUS is initially identifying a limited number of foreign states,” the committee stated.
While the committee noted that more countries may be added to the list in the future, there are requirements that must be met in order to remain exempt. There is also a time limit on that exemption, of February 13, 2022. CFIUS will be responsible for making determinations on a foreign state’s eligibility by assessing its national security and bilateral cooperation with the US.
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.
The S&P/TSX composite index was up 0.05 of a point at 24,224.95.
In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.
The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.
The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.
The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.
This report by The Canadian Press was first published Oct. 10, 2024.
