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Amendments to National Instrument 45-106: Prospectus and Registration Exemptions – Accredited Investor, Minimum Amount and Short-term Debt Prospectus Exemptions [Completed]

Issued: February 19, 2015.

Transitional provisions:

The amendments are effective on May 5, 2015.

Last updated:

February 2015

Overview

On February 19, 2015, the CSA announced the adoption of two sets of amendments to National Instrument 45-106, Prospectus and Registration Exemptions.

The first set of amend­ments re­lates to the ac­cred­ited in­vestor prospec­tus ex­emp­tion (AI ex­emp­tion) and the min­i­mum amount in­vest­ment prospec­tus ex­emp­tion (MA ex­emp­tion). These amend­ments are in­tended to ad­dress in­vestor pro­tec­tion con­cerns. Among other things, the amend­ments:

  1. in­tro­duce a new risk ac­knowledge­ment form for in­di­vid­ual ac­cred­ited in­vestors that de­scribes, in plain lan­guage, the cat­e­gories of in­di­vid­ual ac­cred­ited in­vestor and iden­ti­fies the key risks as­so­ci­ated with pur­chas­ing se­cu­ri­ties in the ex­empt mar­ket; 
  2. pro­vide ex­panded guid­ance on the steps a seller should take to ver­ify the sta­tus of pur­chasers ac­quir­ing se­cu­ri­ties un­der prospec­tus ex­emp­tions, in­clud­ing the AI ex­emp­tion; and
  3. re­strict the MA ex­emp­tion to dis­tri­b­u­tions to non-in­di­vid­ual in­vestors.

The sec­ond set of amend­ments re­lates to the short-term debt prospec­tus ex­emp­tion (short-term debt ex­emp­tion) in NI 45-106.These amend­ments are in­tended to ad­dress in­vestor pro­tec­tion and sys­temic risk con­cerns. Among other things, the amend­ments:

  1. mod­ify the credit rat­ings re­quired to dis­trib­ute short-term debt, pri­mar­ily cor­po­rate com­mer­cial pa­per, un­der the short-term debt ex­emp­tion; and
  2. make the short-term debt prospec­tus ex­emp­tion un­avail­able for short-term se­cu­ri­tized prod­ucts, which are pri­mar­ily as­set-backed com­mer­cial pa­per, and cre­ate a new prospec­tus ex­emp­tion for the dis­tri­b­u­tion of short-term se­cu­ri­tized prod­ucts (the short-term se­cu­ri­tized prod­ucts ex­emp­tion).

Recent activities

February 2015

On February 19, 2015, the CSA announced the adoption of two sets of amendments to National Instrument 45-106, Prospectus and Registration Exemptions.


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