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ARTICLE · 16 NOVEMBER 2011

Securities Regulators Launch Consultation On Changes To $150,000 And Accredited Investor Exemptions

Stikeman Elliott LLP
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The Canadian Securities Administrators (CSA) announced yesterday that they are undertaking a review of the "$150,000 minimum investment amount" and the "accredited investor" exemptions that are commonly used to raise financing on a prospectus exempt basis.

CanadaFinance and Banking
Ramandeep Grewal
Ramandeep Grewal
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The Canadian Securities Administrators (CSA) announced yesterday that they are undertaking a review of the "$150,000 minimum investment amount" and the "accredited investor" exemptions that are commonly used to raise financing on a prospectus exempt basis.   The publication of CSA Staff Consultation Note 45-401 (Consultation Note) commenced a public consultation process intended to solicit feedback from investors, issuers and others on a number of possible changes to these exemptions.

The Consultation Note raises a number of questions, including whether these exemptions should be premised on financial resources (ability to withstand financial loss or obtain expert advice), access to financial and other key information about the issuer, educational background, work experience, investment experience, or some other criteria, and whether the involvement of a registrant (who has an obligation to recommend only suitable investments) addresses any concerns.

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