Decision No. 2025-PDG-0027: Coordinated General Decision 45-933 Regarding Exemption from Investment Ceiling for Reinvestments Under Prospectus Exemption for Offering Notice

DECISION NO. 2025-PDG-0027
Coordinated General Decision 45-933 Regarding the Exemption from the Investment Ceiling Applicable Under the Prospectus Exemption Regime for Placement by Means of an Offering Notice to Exclude Reinvestments

Definitions

1. The expressions defined in the Securities Act, RLRQ, c. V-1.1, (the "Act"), Regulation 14-101 on definitions, c. V-1.1, r. 3, Regulation 31-103 on registration requirements and continuous obligations of registered persons, c. V-1.1, r. 10, and Regulation 45-106 on prospectus exemptions, c. V-1.1, r. 21 (the "Regulation 45-106") have the same meaning in this decision.

Context
2. On October 29, 2015, the securities regulators of Alberta, New Brunswick, Nova Scotia, Ontario, Quebec, and Saskatchewan (collectively, the "participating jurisdictions") published the final amendment to Regulation 45-106 regarding the prospectus exemption for placement by means of an offering notice provided for in section 2.9 of that regulation (the "offering notice exemption"). They also made related amendments to the Companion Policy to Regulation 45-106 on prospectus exemptions (the "Companion Policy 45-106") and to certain other texts.

3. The participating jurisdictions coordinated their efforts to finalize the amendments to Regulation 45-106 and Companion Policy 45-106, as well as other related amendments (collectively, the "final amendments"), which came into force in Ontario on January 13, 2016, and in Alberta, New Brunswick, Nova Scotia, Quebec, and Saskatchewan on April 30, 2016.

4. The final amendments changed the offering notice exemption that existed in Alberta, New Brunswick, Nova Scotia, Quebec, and Saskatchewan and introduced it in Ontario. They did not have the effect of modifying it in the member territories of the Canadian Securities Administrators other than those of the participating jurisdictions.

5. The final amendments instituted by the participating jurisdictions provided, among other measures, for an investment ceiling for investors corresponding to the definition of "eligible investor" but not to that of "qualified investor".

6. As stated in paragraph 1.1 of section 3.8 of Companion Policy 45-106, the fact that investment ceilings have been established for eligible and non-eligible investors who are natural persons does not mean that these amounts constitute suitable investments in all cases. Registered persons remain subject to their suitability obligations to clients. An eligible investor may exceed the investment ceiling of $30,000 only if they receive advice from a portfolio manager, a dealer, or an exempt market dealer indicating that they may exceed this ceiling and that the investment itself is suitable for them. Where applicable, the investment ceiling for all securities acquired by the subscriber under this exemption during the preceding 12 months is $100,000.

7. The participating jurisdictions received comments from stakeholders recommending that they raise the investment ceiling to facilitate capital collection for issuers and to allow investors to benefit from a greater number of investment opportunities in the exempt market.

8. In light of stakeholder comments, the Autorité des marchés financiers (the "AMF") is of the opinion that it is appropriate to grant an exemption from the application of the investment ceiling set under the offering notice exemption regime, subject to certain conditions, without compromising the protection of savers.

Decision
9. Pursuant to section 263 of the Act and considering that this does not impair the protection of savers, the AMF exempts any person relying on the prospectus exemption provided for in subsection 2.1 of section 2.9 of Regulation 45-106 from the obligation, under paragraph b of that subsection, to limit the acquisition cost of all securities acquired by that person during the preceding 12 months as provided therein, when the following conditions are met:

a) the acquisition cost of all securities acquired by a subscriber who is a natural person under subsection 2.1 of section 2.9 during the preceding 12 months does not exceed the following amounts:

i) $10,000 in the case of a subscriber who is not an eligible investor; ii) $30,000 in the case of a subscriber who is an eligible investor; iii) in the case of a subscriber who is an eligible investor and who has received advice from a portfolio manager, a dealer, or an exempt market dealer indicating that the investment is suitable for them, the total of the following amounts:

a. $100,000;

b. the proceeds from any sale of securities of the same issuer during the preceding 12 months, up to $100,000.

Effective Date
10. This decision takes effect on April 17, 2025.

Done on April 16, 2025

Yves Ouellet
President and Chief Executive Officer