For investment funds issuing securities on a private placement basis to Canadian residents, National Instrument 45-106 Prospectus Exemptions (“NI 45-106”) permits the once yearly filing of Form 45-106F1 Report of Exempt Distribution (“Form 45-106F1”) where the fund relies on one of the following exemptions:
- Accredited investor;
- Minimum investment of $150,000; or
- Additional investment in investment fund units.
The 2018 deadline for the annual reporting of the above noted exempt distributions completed during 2017 is January 30, 2018. Where an investment fund relied on any other exemptions under NI 45-106, it is required to have filed the Form 45-106F1 within 10 days of completing the distribution.
This is the first year that investment funds must use the new Form 45-106F1 (and associated Schedule 1), and this form requires significantly more detail than in previous years.
Thus, investment funds should ensure they have collected the requisite information and are prepared for filing in advance of the annual filing deadline.
When completing the Form 45-106F1, investment funds should be aware of certain technical requirements, including:
- The information set out in the Form 45-106F1 and Schedule 1 is to clearly delineate individual investors, dates and provinces/territories of distribution;
- Schedule 1 must be completed and filed in the Excel format in which it is provided;
- A Form 45-106F1 and Schedule 1 must be completed for each applicable investment fund;
- Form 45-106F1 must be filed electronically. In all jurisdictions other than British Columbia and Ontario, filing is to be through SEDAR. In British Columbia filing is through the BCSC’s eServices portal, and in Ontario filing is through the OSC’s electronic filing portal.
- A SEDAR profile will need to be created in advance of filing where the investment fund was created in 2017 or did not file in 2016.
Investment funds planning private placements in 2018 should also keep these requirements in mind when collecting information from investors.
For more detailed guidance on completing the Form 45-106F1 and Schedule 1, interested persons may consult CSA Staff Notice 45-308 (revised) Guidance for Preparing and Filing Reports of Exempt Distribution under National Instrument 45-106 Prospectus Exemptions and CSA Multilateral Notice and Request for Comment Proposed Amendments to National Instrument 45-106 Prospectus Exemptions relating to Reports of Exempt Distribution.