Self-certified investors to be treated more like accredited peers

Securities regulators in Alberta and Saskatchewan are expanding the self-certified investor prospectus exemption

Self-certified investors to be treated more like accredited peers
Steve Randall

Investors who have higher levels of financial and investment knowledge will have greater access to opportunities usually reserved for accredited investors.

Two Canadian provinces have decided to expand the self-certified investor prospectus exemption, allowing those investors who can show enhanced knowledge and understanding of the risks of investment, to invest alongside accredited investors.

The Alberta Securities Commission (ASC) and the Financial and Consumer Affairs Authority of Saskatchewan (FCAA) have amended the exemption to allow businesses to accept investments from self-certified investors up to $10,000 in any one business and $30,000 across multiple businesses in a calendar year.

The aim is that the treatment of self-certified investors will be more aligned with that of accredited investors.

For example, the expansion allows for the sale of securities by a business and for a resale by an existing security holder to a self-certified investor, similar to the resale provisions in the accredited investor exemption.

Businesses will also now be able to sell their securities to certain qualifying special purpose vehicles, in which both accredited investors and self-certified investors participate, without being subject to the investment limits that apply when selling securities to other self-certified investors.  

A three-year pilot for the exemption expires on March 31, 2024.