Understanding the Difference Between Accredited, Eligible, and Non-Eligible Investors in Canada’s Exempt Market
Investing in Canada’s exempt market—such as through a Mortgage Investment Corporation (MIC)—can offer attractive opportunities for portfolio diversification and income. However, before you can participate, it’s essential to understand how Canadian securities laws classify investors. These classifications determine how much you can invest, what information must be disclosed to you, and the types of investment products you can access.
The three main categories in Canada are:
- Accredited Investor
- Eligible Investor
- Non-Eligible Investor
Advanced MIC offers an alternative investment option that helps mitigate risk through minimal correlation to public markets, delivering genuine diversification to your portfolio. Reach out to us today to explore if Advanced MIC is the right fit for your investment goals.
What is the Exempt Market?
The exempt market allows companies to raise capital without issuing a prospectus, typically through a prospectus exemption such as the Offering Memorandum (OM) exemption or Accredited Investor exemption. These offerings are subject to specific rules depending on the investor’s classification to ensure appropriate protection and disclosure.
1. Accredited Investors
Accredited Investors are considered financially sophisticated and capable of bearing higher investment risks. As such, they are granted broader access to exempt market opportunities with no investment limits.
Common qualification criteria:
- Income: $200,000+ (or $300,000+ with spouse) in each of the past two years, with expectation of same in the current year.
- Financial Assets: $1 million+ in financial assets (Excluding non-financial assets such as owned properties).
- Net Assets: $5 million+ in total net assets.
Investment Limits: None
Access: Full access to exempt market investments.
2. Eligible Investors
Eligible Investors have more modest financial resources compared to Accredited Investors but still meet certain thresholds to participate in the exempt market under controlled conditions.
Qualification criteria:
- Income: $75,000+ (or $125,000+ with spouse) in the past two years, with expectation of same.
- Net Assets: $400,000+.
- Advised by a Dealer: Those working with a registered dealer may also qualify.
Investment Limits:
- Up to $30,000 per year, or
- Up to $100,000 per year with advice from a registered dealer that the investment is suitable.
Access: Partial access, subject to annual limits and disclosures under the OM exemption.
3. Non-Eligible Investors
Non-Eligible Investors are individuals who do not meet the financial thresholds of either Accredited or Eligible Investors. While they can still invest in the exempt market, their participation is tightly restricted to ensure adequate investor protection.
Common characteristics:
- Income below $75,000 (or $125,000 with spouse)
- Net assets below $400,000
- No dealer certification of suitability
Investment Limit:
- Up to $10,000 per year under the Offering Memorandum exemption
Access:
- Limited participation in OM-based offerings only
- Must receive full Offering Memorandum disclosure
- Must complete a risk acknowledgment form
Why This Matters
Investor classification isn’t just a regulatory formality—it directly impacts what, how, and how much you can invest in exempt offerings. At Advanced MIC, we provide an investment, which allows Accredited, Eligible, and Non-Eligible Investors to participate—each within their respective limits and with proper disclosure and guidance.
Whether you’re seeking monthly income, portfolio diversification, or exposure to the private mortgage market, understanding your classification helps ensure that your investment journey is aligned with your financial situation and regulatory framework.
Get Started With Confidence
Not sure which category you fall into? We’re here to help. At Advanced MIC, our team will guide you through the qualification process and help determine the appropriate investment path.
