Types of investors
Selected investor
Under subsection 52(1) of the regulations, a selected investor generally includes a person that:
- Is resident in Canada;
- Holds units with a total value of less than $10,000,000;
- Is not an individual; and
- Is not a DIP.
This type of investor includes certain corporations, trusts, pension plans and partnerships. If the DIP sends a written request to a selected investor, the investor is required to provide the following information:
- The address that determines its province of residency as at 30 September 2023; and
- The number of units held by the investor as at 30 September 2023.
Qualifying investor
Subsection 52(1) of the regulations define a qualifying investor as a person that is an investment plan that:
- Holds units with a total value of less than $10,000,000;
- Is not a DIP (such as a mutual fund trust, investment limited partnership or investment corporation);
- Is neither a qualifying small investment plan1 under subsection 7(2) of the regulations nor a qualifying private investment plan,2 as proposed, under subsection 7(3) of the regulations; and
- Meets one of the following conditions:
- It is a SLFI;
- It is a member of an affiliated group and the members together hold units with a total value of $10,000,000 or more; or
- It is a member of an affiliated group and at least one member of the affiliated group is a SLFI.
This type of investor generally includes pension plans that are a SLFI. A DIP is not required to send an information request to qualifying investors; however, in accordance with subsections 52(9) and (10) of the regulations, these investors must provide the required information voluntarily by 15 November 2023. Given that qualifying investors may not be aware of their obligations to provide this information voluntarily, a DIP should send an information request to qualifying investors requesting the following information for each investor:
- Its “investor percentage” and the number of units held in each series as at 30 September 2023; and
- Confirmation that it is a qualifying investor.
Securities dealer
A securities dealer that sells or distributes units of the DIP must provide details on the units held by the investor and the residency of the investors in the participating provinces as at 30 September 2023.
Institutional investors with $10,000,000 or more invested in a particular series or unit
This type of investor is generally limited to investors that:
- Hold $10,000,000 or more in a particular series; and
- Are not an individual, a specified investor or a DIP.
Institutional investors include corporations, banks, insurance companies and lending companies. A DIP that has institutional investors as its unitholders should obtain the investor percentage and the number of units held by the institutional investor as at 30 September 2023.
Distributed investment plans
Subsection 1(1) of the regulations generally defines a DIP to include mutual fund trusts, mutual fund corporations, segregated funds of an insurer, unit trusts and investment limited partnerships. It should be noted that foreign partnerships with Canadian investors may be subject to the SLFI rules (including the obligation to request investor information and to self-assess GST/HST/QST). Regardless of the quantum of the investments held by DIP investors, it is recommended that DIPs obtain the following information for each investor:
- Its investor percentage as at 30 September 2023; and
- The number of units held as at 30 September 2023.
Learn more
For more information, please contact your EY or EY Law advisor or one of the following professionals:
East
Jadys Bourdelais
+1 514 879 6380 | jadys.bourdelais@ca.ey.com
West
David D. Robertson
+1 403 206 5474 | david.d.robertson@ca.ey.com
Central
Jan Pedder
+1 416 943 3509 | jan.s.pedder@ca.ey.com
Sania Ilahi
+1 416 941 1832 | sania.ilahi@ca.ey.com
Tariq Nasir
+1 416 932 6143 | tariq.nasir@ca.ey.com
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- A qualifying small investment plan generally includes an investment plan that pays less than $10,000 per year of the federal component of GST/HST at the rate of 5%.
- As proposed, a qualifying private investment plan refers to a private investment plan, a pension entity or a master pension entity that generally meets both of the following conditions: (i) less than 10% of the plan members reside in the participating provinces, and (ii) the total value of its assets and actuarial liabilities attributable to plan members who reside in the participating provinces is less than $100 million. If enacted, this definition would apply to any fiscal year that ends after 9 August 2022.