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ARTICLE · 17 JUNE 2015

Changes To The Canadian Private Placement Regime

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On May 5, 2015, Canadian securities regulators amended National Instrument 45-106 Prospectus Exemptions and its Companion Policy.

CanadaCorporate/Commercial Law
Eric Foster
Eric Foster
Leslie McCallum
Leslie McCallum
Rory McGillis
Rory McGillis
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On May 5, 2015, Canadian securities regulators amended National Instrument 45-106 Prospectus Exemptions and its Companion Policy. Some of the rule changes are designed to encourage capital raising in the exempt market while others are meant to provide increased protection of retail investors.

Summary of Rule Changes

Accredited Investor (AI) Exemption: Accredited investors who are natural persons will now be required to complete a Risk Acknowledgment Form, unless their net financial assets exceed $5 million.

Minimum $150,000 Investment Exemption: Natural persons will no longer qualify for this exemption.

Short-Term Debt Exemption: This exemption has been amended with the objective of removing the regulatory disincentive for commercial paper issuers to obtain more than one credit rating. Under the new rules, only one of an issuer's credit ratings must be at or above DBRS – R-1 (low); S&P Canada – A-1 (low) (Canada national scale); Moody's Canada – P-1; or Fitch

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