Alberta and Saskatchewan's New "Self-Certified" Investor Prospectus ExemptionOn March 31, 2021, securities regulators in Alberta and Saskatchewan adopted a new self-certified investor prospectus exemption, in effect for the next three years (expiring April 1, 2024), to increase capital access and investment opportunities for businesses and investors in their respective provinces. Self-Certified Investor Prospectus Exemption
The pilot project for this new prospectus exemption will allow issuers in Alberta and Saskatchewan to distribute securities to investors who self-certify as meeting certain financial and investment knowledge criteria (Self-Certified Investor). The exemption is intended for investors who do not meet the financial thresholds or other criteria required to qualify as an "accredited investor" (as defined in National Instrument 45-106 – Prospectus Exemptions) but that meet other criteria to demonstrate a certain level of financial and investment knowledge and are investing concurrently with an accredited investor. While one of the stated goals of this exemption is to facilitate the growth and financing of early stage businesses in emerging industries, this exemption will also be of interest to other issuers in facilitating their capital raising efforts by way of private placement. The eligibility criteria for a Self-Certified Investor to utilize the exemption in a distribution of securities by an issuer include:
Qualifying CriteriaThe exemption requires that a Self-Certified Investor acknowledge that it has met certain educational and designation requirements. Holders of CFA, CIM, CBV, CPA and CIWM designations from the relevant professional organizations, as well as lawyers, business degree holders (undergraduate or MBA) and persons who have passed the Canadian Securities Course will be qualified, provided certain additional requirements are met. It is anticipated that this exemption will be beneficial to early stage business by increasing the pool of potential investors available. If you have any questions regarding this article or the use and availability of the Exemption, please contact a member of the Bennett Jones Capital Markets team or Technology Law team. Authors
Please note that this publication presents an overview of notable legal trends and related updates. It is intended for informational purposes and not as a replacement for detailed legal advice. If you need guidance tailored to your specific circumstances, please contact one of the authors to explore how we can help you navigate your legal needs. For permission to republish this or any other publication, contact Amrita Kochhar at kochhara@bennettjones.com. |