CSA Staff Consultation Note 45-401 Review Of Minimum Amount And Accredited Investor Exemptions

On November 11, 2011, Canadian Securities Administrators ("CSA") staff issued for public consultation Note 45-401 – Review of Minimum Amount and Accredited Investor Exemptions. CSA staff are seeking responses from industry stakeholders, including investors, issuers, dealers and legal and other advisors, to specific consultation questions in order to determine whether changes to the $150,000 minimum amount prospectus exemption ("minimum amount exemption") and the Accredited Investor prospectus exemption ("AI exemption") contained in National Instrument 45-106 Prospectus and Registration Exemptions (NI 46-106) are necessary or appropriate. Depending on the results of the consultation process, CSA staff may recommend one or more of the following:

Potential options regarding the minimum amount exemption:

1. retain the minimum amount exemption in its current form;
2. adjust the $150,000 threshold;
3. limit the use of the exemption to certain investors, such as institutional investors and not individuals;
4. use alternative qualification criteria;
5. impose other investment limitations; or
6. repeal the exemption.

Potential options regarding the AI exemption:

1. retain the AI exemption in its current form;
2. adjust the income and asset thresholds in the definition of accredited investor;
3. use alternative qualification criteria for individuals;
4. limit the exemption to certain investors, such as institutional investors and not individuals; or
5. impose other investment limitations.

The consultation period is open until February 29, 2012.  Comment letters should be submitted in writing in Word format to the following two addresses:

Gordon Smith
British Columbia Securities Commission
P.O. Box 10142, Pacific Centre
701 West Georgia Street
Vancouver, British Columbia, V7Y 1L2

Fax: 604-899-6814
Email: gsmith@bcsc.bc.ca

Ann-Marie Beaudoin
Corporate Secretary
Autorité des marchés financiers
800, square Victoria, 22e étage
C.P. 246, Tour de la Bourse
Montréal, PQ H4Z 1G3

Fax: 514-864-6381
Email: consultation-en-cours@lautorite.qc.ca

Please note that all comment letters received will be posted at www.osc.gov.on.ca and on the websites of other securities regulatory authorities.

www.fasken.com

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.