IIAC RESPONDS TO PROPOSED PROSPECTUS EXEMPTION FOR SELF-CERTIFIED INVESTORS IN ALBERTA AND SASKATCHEWAN
The IIAC supports the creation of an exemption that would expand the scope of the accredited investor exemption by allowing those with appropriate education and experience to qualify. It is appropriate, however, that the proposed exemption be applicable across all Canadian jurisdictions given the national nature of the capital markets, and the interest among major Canadian regulators to provide investment opportunities uniformly to Canadian investors.
The IIAC noted that the education and experience criteria to qualify for the proposed exemption is likely to overlap with those already eligible to invest using the accredited investor exemption. As such, consistent with the Ontario Capital Markets Modernization Taskforce consultation, we recommend increasing the criteria to also include those individuals who have completed relevant proficiency requirements, such as the Canadian Securities Course Exam; the Exempt Market Products Exam; or those who have passed the Series 7 Exam and the New Entrants Course Exam (as defined in NI 31-103). We also support the concept of allowing persons with relevant educational or professional qualifications to invest in the industry in which they have experience. In such situations we recommend that maximum yearly investment amounts apply and that they be increased from $10,000 to $20,000 per investment (aggregate $30,000 to $40,000 ), unless the investment is made through an investment dealer with know-your-client and suitability obligations.
We also suggest that if the investment is facilitated through an investment dealer, the maximum investment not be applicable, as the investment process would be subject to know-your-client and suitability requirements imposed under securities law. This would, in effect, expand the Investment Dealer exemption, available in Alberta, Saskatchewan, British Columbia, Manitoba and New Brunswick, to situations where the issuer is not listed on a Canadian exchange.