Accredited investor

A category of person to whom the sale of securities by an issuer is exempt from the securities law requirement that the issuer prepare and file a prospectus. The accredited-investor is defined in National Instrument 45-106 (Prospectus Exemptions) and includes a purchaser who, (i) either alone or together with a spouse, beneficially owns net financial assets exceeding $1,000,000 or, (ii) in each of the last two years has net individual before-tax income of at least $200,000 or, combined with that of a spouse, has net before tax income of at least $300,000 and reasonably expects to exceed that net income in the current calendar year. The rationale for the exemption is that accredited investors are deemed to be sufficiently sophisticated to protect their own interests and do not need the protection of mandatory prospectus disclosure. They can negotiate for the level of disclosure they determine they need.