What are the criteria to qualify as an eligible investor under the new OM Exemption?
Generally, securities offered to the public in Ontario must be issued with a prospectus, but there are exceptions. These exemptions are called prospectus exemptions. The offering memorandum (OM) prospectus exemption allows companies to sell securities to a wide range of investors based on an offering memorandum being made available to investors. An offering memorandum is a document that outlines a company’s business and affairs.
Anyone can buy securities under this exemption, but there are limits depending on whether an investor is an eligible or non-eligible investor. There are several ways an individual may qualify as an eligible investor, including having net assets, alone or with a spouse, exceeding $400,000; net income before tax exceeding $75,000 in the previous two calendar years, with an expectation to exceed that level in the current year; and net income, alone or with a spouse, exceeding $125,000 in the previous two calendar years, with an expectation to exceed that level in the current year.
To learn the investment limits for eligible and non-eligible investors visit GetSmarterAboutMoney.ca.