Canadian Securities Administrators Are Reviewing the Minimum Amount and Accredited Investor Exemptions
Davis LLP Securities & Corporate Finance Bulletin
December 21, 2011
While this process is not yet at the proposal stage, it should be noted that a similar public consultation process led to the recent CSA proposal for a new regime for venture issuers via proposed National Instrument 51-103 - Ongoing Governance and Disclosure Requirements for Venture Issuers. The public comment period is open until February 29, 2012 and at its conclusion, CSA staff may recommend either retaining the exemptions in their current form or may propose changes.
The minimum amount exemption and the accredited investor exemption are premised on an investor having:
• a certain level of sophistication;
• retaining the minimum amount exemption;
• either alone or with a spouse, beneficially own financial assets which have an aggregate realizable value that before taxes, but net of any related liabilities, exceeds $1,000,000 CDN;
• retaining the accredited investor exemption in its current form;
1 The CSA notes that the $150,000 threshold is equivalent to over $265,000 in 2011 dollars.
2 The current threshold for an individual income is $200,000. The CSA notes that in 2011 dollars, the threshold would be over $433,000 based on 1982 dollars (the year of SEC adoption), or $245,000 based on 2001 dollars (the year the Ontario Securities Commission first adopted the exemption).
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