test would remain at $400,000; and
To make things a little more complicated, as Ontario proposes to
implement a modified Alberta model, there is now a movement led
by Alberta, to change the Alberta model OM Exemption.
III. Alberta also making Proposed Changes to the Offering
At the same time as Ontario published the Ontario model for
comment, Alberta, Quebec and Saskatchewan have also proposed
further amendments to the OM Exemption (the Modified Alberta
model), including changes which would:
a. impose investment limits on eligible investors such that the
acquisition cost to a purchaser:
• who is an individual cannot exceed $30,000 in the preceding
12-months except a purchaser who is an accredited investor
or person in s. 2.5(1) of NI 45-106 [family, friends and
business associates]; or
• $10,000 if a non-eligible investor in the preceding 12-months.
b. investments by non-eligible investors would be limited to no
more than $10,000 in a 12-month period and not per distribution.
If adopted, Alberta, Quebec and Saskatchewan would be moving
from the Alberta model to this new Modified Alberta model.
IV. Issues and concerns about the proposed changes to the
While the proposals are a positive step forward strongly
supported by the PCMA and many capital markets participants
across Canada, they do also give rise to a number of issues and
concerns that industry and the Canadian securities regulator must
work through during this public comment period. Some of the
concerns are discussed below.
a. Lack of a nationalized and harmonized OM Exemption
If all proposed changes are adopted by the various Canadian
securities regulators, we would move from two to four models of
the OM Exemption across Canada. This is moving us even further
from a national or harmonized approach and reflects the increasing
complexity of having 13 securities regulators across Canada. The
significant challenges issuers and dealers will face in complying
with this fractured approach to the OM Exemption is illustrated by
the graphic below. This highlights which jurisdictions in Canada
would follow which of the four models of the OM Exemption,
assuming they are adopted as currently proposed.