OSC Provides Pilot Program for a New Self-Certified Investor Prospectus Exemption

October 28, 2022
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On October 25, 2022, the Ontario Securities Commission announced an 18-month pilot that provides a prospectus exemption that gives Ontario investors with qualifying education or work experience access to increased investment opportunities. The exemption also gives businesses headquartered in Ontario access to a new source of capital.

The new exemption is set forth in Ontario Instrument 45-507 Self-Certified Investor Prospectus Exemption (Interim Class Order) (the “Class Order“) and was ordered under subsection 143.11(2) of the Securities Act (Ontario). The Class Order provides a time-limited prospectus exemption for purchasers in Ontario, who may not qualify as an accredited investor, to invest in issuers provided that certain conditions are met. Qualifying investors are called “Self-Certified Investors” (outlined below), and are deemed to have the appropriate financial knowledge, investment knowledge, or relevant industry specific experience, to understand certain investment cons iderations and risks.

Self-Certified Investors, and their “permitted designates”1, will be subject to a $30,000 annual limit on all purchases under the Class Order. The $30,000 limit is based on the aggregate acquisition cost, after giving effect to the distribution, of all securities acquired by a Self-Certified Investor, and any permitted designates, under the Class Order in the calendar year. These purchases can be allocated to one or multiple issuers.

The Class Order came into effect on October 25, 2022 and remains in effect until the earlier of:

  1. April 25, 2024, unless extended by the Ontario Securities Commission, or
  2. The effective date of an amendment to National Instrument 45-106 Prospectus Exemptions that addresses substantially the same matter as the Class Order.

Issuer Qualification Criteria

Issuers seeking to access the Class Order, must meet the following criteria:

  • must be a non-investment fund issuer;
  • must have a head office in Ontario;
  • must not know, or should not reasonably be expected to know, that the statements made by the Self-Certified Investor in Annex 1 and Annex 2 of the Class Order are false; and
  • must file a completed Form 45-106F1 Report of Exempt Distribution, together with a completed Confirmation of Qualifying Criteria contained in Annex 1 of the Class Order, within 10 days of the distribution.

Self-Certified Investor Qualification Criteria

An Ontario resident that meets a least one of the following criteria contained in Annex 1 of the Class Order qualifies as a “Self-Certified Investor”:

  • holds a Chartered Financial Analyst Charter from the CFA Institute;
  • holds a Chartered Investment Manager designation from the Canadian Securities Institute (the “CSI“);
  • holds a Chartered Business Valuator designation from the CBV Institute;
  • holds a Chartered Professional Accountant designation from CPA Canada;
  • holds a Certified International Wealth Manager Designation from the CSI;
  • was admitted to practice law in a jurisdiction of Canada and at least 1/3 of their practice has involved providing advice respecting financings involving public or private distributions of securities or mergers and acquisitions;
  • holds a Master of Business Administration degree with a focus on finance, from a Canadian university or an accredited foreign university;
  • holds an undergraduate degree in finance or an undergraduate degree in commerce or business with a major or specialization in finance or investment, from a Canadian university or an accredited foreign university;
  • has passed the Canadian Securities Course administered by the CSI;
  • has passed the Exempt Market Products Exam administered by the IFSE Institute;
  • has passed the Canadian Investment Funds Course Exam administered by the IFSE Institute;
  • has passed the Investment Funds in Canada Course Exam administered by the CSI;
  • has passed both the Series 7 Exam administered by the Financial Industry Regulatory Authority in the United States of America, and the New Entrants Course Exam administered by the CSI;
  • holds the Certified Financial Planner designation from FP Canada;
  • holds a Financial Planner or Financial Advisor credential, in good standing, from a credentialling body approved by the Financial Services Regulatory Authority of Ontario under the Financial Professionals Title Protection Act, 2019; or
  • has management, policy-making, engineering, product or other relevant operational experience at a business that operates in the same industry or sector as the issuer and who, as a result of this experience, are able to adequately assess and understand the risk of investment in the issuer.

A prospective Self-Certified Investor must also complete the risk acknowledgement form contained in Annex 2 of the Class Order.

Resale Restrictions

The Class Order states that the first trade of a security acquired under the Class Order is subject to section 2.5 of NI 45-102 Resale of Securities. That is, securities purchased pursuant to the Class Order will be subject to a 4-month restricted period before the securities become freely tradeable.


The Class Order mirrors a similar prospectus exemption adopted in Alberta and Saskatchewan on March 31, 2021. Its adoption in Ontario is part of an effort to explore regulatory responses to the Modernization Taskforce’s recommendation to expand the Accredited Investor prospectus emption to individuals that have demonstrated a high degree of understanding of investments and markets.


1 A “permitted designate” is a defined term in the Class Order, meaning: “with respect to an individual, (a) a trustee, custodian or administrator acting on behalf of, or for the benefit of, the individual, (b) a holding entity of the individual, (c) a RRSP, RRIF, or TFSA of the individual, (d) a spouse of the individual, (e) a trustee, custodian, or administrator acting on behalf of, or for the benefit of, the spouse of the individual, (f) a holding entity of the spouse of the individual, or (g) a RRSP, RRIF, or TFSA of the spouse of the individual.”

This publication is intended for general information purposes only and should not be relied upon as legal advice.