CSC Canadian Regulatory Environment 4

Question 1

To qualify as an 'accredited investor' under Canadian securities law and access the prospectus exemption, an individual generally must have:

Accepted Answer

Net financial assets exceeding $1 million, or net assets exceeding $5 million, or income exceeding $200,000 (or $300,000 combined with spouse) in each of the prior two years

Answer

The accredited investor exemption in NI 45-106 uses financial thresholds (net financial assets, net assets, or income) to identify sophisticated investors who do not require the protection of a prospectus.

Question 2

Which statement correctly distinguishes a 'material fact' from a 'material change' under Canadian securities legislation?

Accepted Answer

A material change involves a change in the business, operations, or capital of the issuer; a material fact is any fact that would reasonably be expected to significantly affect the market price of a security

Answer

A material change is a specific event affecting the issuer's business, operations, or capital requiring prompt disclosure; a material fact is broader and includes any information that could affect the security's price.

Question 3

Under continuous disclosure rules in NI 51-102, how quickly must a reporting issuer publicly disclose a material change?

Accepted Answer

Promptly and, in any event, within 2 business days via a press release

Answer

NI 51-102 requires issuers to issue a press release disclosing a material change promptly and in any event no later than 2 business days after the change occurs.

Question 4

Under Canadian securities legislation, who qualifies as an 'insider' subject to trading restrictions and reporting requirements?

Accepted Answer

Directors, senior officers, the issuer itself, and any person or company that beneficially owns or controls more than 10% of the issuer's voting securities

Answer

Insiders include directors, senior officers, the issuer, and significant shareholders (generally 10% or more), all of whom have access to material non-public information.

Question 5

Under National Instrument 55-104, how many calendar days does an insider typically have to file an insider report after executing a trade?

Accepted Answer

5 calendar days

Answer

NI 55-104 generally requires insiders to file an insider report within 5 calendar days of the date of the trade.

CSC - Canadian Securities Course Practice Test

CSC - Canadian Securities Course Practice Test

CSC Canadian Regulatory Environment 4