CSA Announces Amendments To Prospectus Exemptions That Will Affect Fund Managers

The Canadian Securities Administrators (CSA) have published amendments to National Instrument 45-106 – Prospectus and Registration Exemptions (NI 45-106), which will come into force May 5, 2015. The amendments will, among other things:

• require pooled funds and private equity funds relying on the accredited investor prospectus exemption (the AI Exemption) to obtain a signed risk acknowledgement form (the Risk Acknowledgement Form) from individual accredited investors who are not "permitted clients";
• revise the definition of "accredited investor" to allow fully managed accounts in Ontario to purchase securities of pooled funds regardless of whether the underlying managed account client qualifies as an accredited investor, which revision will harmonize across Canada the ability of fully managed accounts to purchase securities of pooled funds;