Greater access to capital and broader investment opportunities for investors in Alberta and Saskatchewan are the goals of the new prospectus exemption that will allow investors who have financial and investment education to invest on a private placement basis.
The Alberta Securities Commission (ASC) and the Financial and Consumer Affairs Authority of Saskatchewan (FCAA) have adopted the previously proposed prospectus exemption (the Exemption) to allow issuers with head offices located in Alberta and Saskatchewan to distribute securities to investors who have self-certified as holding certain prescribed professional designations or levels of education (Qualified Investors), including, among others, holding any of a CFA, CPA, CBV, CIM or an MBA focused on finance or persons admitted to practice law in Canada who spend at least one-third of their practice on financing and/or merger transactions. Pursuant to the Exemption, Qualified Investors are able to participate in a prospectus exempt distribution despite not meeting the financial thresholds or other criteria required to qualify as an accredited investor, provided the distribution is made concurrently with a distribution to accredited investors.
As previously discussed, Qualified Investors will be limited to a maximum investment of $10,000 in one issuer in a twelve-month period, and aggregate investments in all issuers of up to $30,000 in a twelve-month period. However, pursuant to the newly adopted Exemption, these investment limits will not apply to a "Listed Issuer Investment" which refers to a distribution where the issuer conducting the distribution has a class of securities listed on the Toronto Stock Exchange, the TSX Venture Exchange, the Canadian Securities Exchange or the NEO Exchange and is not in default of its continuous and timely disclosure obligations and the investor has received suitability advice with respect to the investment.
The Exemption is provided under ASC Blanket Order 45-538 Self-Certified Investor Prospectus Exemption in Alberta and FCAA General Order 45-538 Self-Certified Investor Prospectus Exemption in Saskatchewan and is effective as of March 31, 2021 until April 1, 2024. For further information, please see Multilateral CSA Notice of Implementation Alberta and Saskatchewan Orders 45-538 Self-Certified Investor Prospectus Exemption (March 31, 2021).
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.