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Offering Memorandum Exemption

November 24, 2015

Offering Memorandum Exemption

The securities regulators in Alberta, New Brunswick, Nova Scotia, Ontario, Quebec and Saskatchewan have finalized further amendments to the National Instrument 45-106 Prospectus Exemptions.

The amendments will introduce the offering memorandum exemption into Ontario and will modify the existing offering memorandum exemption in the other participating jurisdictions to add new investor protection measures.

Subject to ministerial approval the amendments will come into force in Ontario on January 13, 2016 and participating jurisdictions on April 30, 2016.

What This Means?

  1. For Ontario Investors:

    The OM exemption will be introduced meaning eligible investors in Ontario will be permitted to invest in exempt market securities.

    An Eligible Investor means a purchaser whose:

    1. Net assets, alone or with a spouse, in the case of an individual, exceed $400,000,
    2. Net income before taxes exceeded $75,000 in each of the 2 most recent calendar years and who reasonably expects to exceed that income level in the current calendar year; or
    3. Net income before taxes, alone or with a spouse, in the case of an individual, exceeded $125,000 in each of the 2 most recent calendar years and who reasonably expects to exceed that income level in the current calendar year.
  2. Investment Limits for Alberta, New Brunswick, Nova Scotia, Ontario, Quebec and Saskatchewan investors:

    1. For a Non-eligible individual investor, the acquisition cost of all securities acquired by the purchaser under the OM exemption in the preceding 12 months cannot exceed $10,000;
    2. For an Eligible individual investor, the acquisition cost of all securities acquired by the purchaser under the OM exemption in the preceding 12 months cannot exceed $30,000;
    3. For an Eligible individual investor, that receives advice from a portfolio manager, investment dealer or exempt market dealer that the investment above $30,000 is suitable, the acquisition cost of all securities acquired by the purchaser under the OM exemption in the preceding 12 months cannot exceed $100,000.

    No limits will be imposed on accredited investors and non-individual investors

  3. British Columbia and Newfoundland and Labrador investors:

    There are no investment limits in these provinces.

  4. New Risk Acknowledgement Forms

    Individual investors will be required to sign two forms in conjunction with the risk acknowledgement form already in place.

    One schedule asks investors to confirm their status as an eligible, non-eligible, accredited investor or an investor who would qualify to purchase securities under the family, friends, and business associates exemption. The other schedule requires confirmation that the investor is within the investment limits where applicable.

    Investors that are not individuals are not required to complete these schedules.

Investment in Centurion Funds

Centurion is very excited about these new regulatory changes and anticipates the offering exemptions will be in place for current and new investors on April 30, 2016.