– Registered Dealer. The fund should ensure that the persons who are engaged in marketing activities on behalf of the fund either are registered as dealers in the province or territory in which such activities are being carried out or are not subject to the dealer registration requirement. – Registered Investment Fund Manager. The fund’s sponsor or manager should ensure that, if it is subject to the investment fund manager registration requirement, it is or will be registered or that it is able to avail itself of an exemption from registration as an investment fund manager.
Accredited investors are
purchasers that are presumed to be sophisticated because they possess certain characteristics
Prospectus Exemptions
ACCREDITED INVESTOR OR PERMITTED CLIENT? Foreign private funds generally rely on the “accredited investor” exemption from the prospectus requirements in connection with the issuance of their securities to investors in Canada, although some foreign private funds limit their distributions even further to Canadian investors that are “permitted clients” in order to rely on exemptions from certain registration requirements under Canadian securities laws. – Accredited investors are purchasers that are presumed to be sophisticated because they possess certain characteristics that minimize their need for the additional information provided by a prospectus. The definition of “accredited investor” includes the following: > an individual, either alone or with a spouse, who beneficially owns financial assets having a pre-tax aggregate realizable value that, net of any related liabilities, exceeds C$1 million or who, either alone or with a spouse, has net assets of at least C$5 million; > an individual whose net income before taxes exceeded C$200,000 in each of the two most recent calendar years or whose net income before taxes combined with that of a spouse exceeded C$300,000 in each of the two most recent calendar years and who reasonably expects to exceed that net income level in the current calendar year; > a person, other than an individual or investment fund, that has net assets of at least C$5 million as shown on its most recently prepared financial statements, provided that such person is not created or used solely to purchase or hold securities as an “accredited investor”; > certain types of investment funds, financial institutions, pension funds and governmental entities; and
that minimize their need for the additional information provided by a prospectus.
4
Go North, Young Fund!
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