CSA Review Of Prospectus Exemptions

On November 10, 2011, the Canadian Securities Administrators (the "CSA") announced that they are reviewing the $150,000 minimum amount prospectus exemption and the accredited investor prospectus exemption.

The review has been initiated as a result of the global financial crisis and recent international regulatory developments. The CSA is engaging in the consultation to identify any issues that stakeholders may have about the use of the exemptions and to obtain information that will assist in deciding whether changes to the exemptions are necessary or appropriate.

Both of the minimum amount and accredited investor exemptions are premised on an investor having one or more of (i) a certain level of sophistication, (ii) the ability to withstand financial loss, (iii) the financial resources to obtain expert advice, and (iv) the incentive to carefully evaluate the investment given its size.