Individual accredited investor certificate (Form 45-106F9)

A company raising money from individuals, or a buyer group bringing in individual co-investors, may rely on the accredited investor exemption. For some individuals the exemption applies only if this form is signed first. The duty sits with the person distributing the security, so a company raising equity from individuals should check whether it applies.

When it applies

Section 2.3(6) of National Instrument 45-106 says the exemption does not apply to an individual described in paragraphs (j), (k) or (l) of the accredited investor definition unless the person distributing the security obtains the signed form at the same time or before the individual signs the agreement to purchase the security. Section 2.3(7) requires the person relying on the exemption to retain it for 8 years after the distribution. In Ontario, section 2.3(0.1) says the exemption itself is the one in section 73.3(2) of the Securities Act (Ontario). The companion policy says individuals meeting paragraph (j.1) are not required to sign one.

What to check or ask

• Which paragraph of the definition does each individual rely on?
• Is the signed form in hand before the purchase agreement is signed?
• What steps were taken to verify the investor’s statements? The companion policy says an initial beside a category is not enough on its own.

See the accredited investor exemption and how to sell my business to investors. The instrument and policy covered here are those published by the Ontario Securities Commission.