Risk acknowledgement form (Form 45-106F4)

A business that raises money by selling shares or notes without a prospectus may have to collect a signed risk acknowledgement from each investor. For the offering memorandum exemption, obtaining it is one of the conditions of the exemption. A seller reviewing past financings, or a buyer checking how a company raised capital, may find these forms in the files.

What National Instrument 45-106 requires

Section 2.9 sets the conditions for the offering memorandum exemption, and one is that, at the same time or before the purchaser signs the agreement to purchase, the issuer obtains a signed risk acknowledgement from the purchaser in compliance with subsection 2.9(15). Section 6.5 says the required form under subsection 2.9(15) is Form 45-106F4. In Alberta, New Brunswick, Nova Scotia, Ontario, Québec and Saskatchewan, the form for individual investors includes two schedules. Subsection 2.9(15) requires the issuer to retain the signed risk acknowledgement for 8 years after the distribution. The Alberta Securities Commission says the same for an issuer relying on the exemption: it must obtain the specified form from each investor.

Other exemptions use other forms

• Form 45-106F9 is the required form under subsection 2.3(6), the accredited investor exemption for certain individuals.
• In Saskatchewan, Form 45-106F5 is required under section 2.6.
• In Ontario, Form 45-106F12 is required under section 2.6.1.

Ask which exemption the raise relied on and whether a signed form of the right type, with its schedules, is on file. See selling a business to investors and accredited investor exemption.