SEC Amends 'Accredited Investor' Definition

Author:Mr Jamie Au
Profession:Fraser Milner Casgrain LLP

The United States Securities and Exchange Commission ("SEC") has recently adopted amendments to the accredited investor standards in the rules under the Securities Act of 1933 ("U.S. Securities Act") in order to conform to the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Effective February 27, 2012, the definition of "accredited investor" in the rules under the U.S. Securities Act will exclude the value of a person's primary residence for purposes of determining whether the person qualifies as an "accredited investor" on the basis of having a net worth in excess of US$1 million. The accredited investor exemption in Canada may also be subject to amendment in the near future. As discussed in a previous post, the Canadian Securities Administrators ("CSA") are in the process of reviewing certain prospectus exemptions, including the accredited investor exemption and the $150,000 minimum amount exemption. In connection with the CSA's review, the Ontario Securities Commission ("OSC") has announced three upcoming roundtable discussions to obtain input from investors, issuers, registrants and professional advisors as to whether any changes to the prospectus exemptions may be appropriate. The roundtable...

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