This is a reminder that an Exempt Trade Report must be filed for all investment funds sold to Canadian purchasers on a private placement basis during 2017. The Report is due no later than January 30, 2018, and must be filed in each Canadian province or territory where fund securities were distributed in reliance on the accredited investor, minimum amount or additional investment in investment funds exemptions from the prospectus requirement. All transactions that have occurred in 2017 and have not yet been reported must be included in the annual Exempt Trade Report.
One notable change from previous years is that a new form of Exempt Trade Report must now be used. Additional information concerning the investment fund and purchasers must be included on the new form of Exempt Trade Report, including the category of accredited investor applicable to each purchaser that invested in reliance on the accredited investor exemption and certain fund information such as fund type, net asset value (within a range), net proceeds by jurisdiction (factoring in redemptions) and other details set out in this questionnaire.
A potential benefit of the new form of Exempt Trade Report is that there is no longer a requirement to disclose purchaser information for both an investment manager and the manager’s underlying client (beneficial owner) in respect of securities distributed in reliance on the “managed account” categories of the accredited investor prospectus exemption. The Canadian Securities Administrators have published guidance providing that where a trust company or registered adviser is deemed to be purchasing securities as principal on behalf of a fully managed account and the fund is relying on the exemption described in paragraph (p) or (q) of the definition of “accredited investor,” only the name of the trust company or registered adviser should be provided. For pooled funds that are distributed primarily to accounts advised by the fund manager or an affiliate, this change may significantly reduce the volume of disclosure of personal client information.