Mortgage investment companies and individual investors

With investors tiring 2-4% fixed-income returns mortgage investment companies (MICs) have been attracting more assets.

People have found that some reputable MICs have a long history of strong return of inflation. (See: inside mortgage investment corporations.)

However not everyone can invest in the Mic. And those who sometimes operate within regulatory limits.

For information about the rules around Mick investment talked with Jeremy Farr, partner at Borden Ladner Gervais, Mick specialist, as well as a corporate lawyer for 27 years.

"Shares in Mick are securities and regulatory authorities are the conditions in which to buy," says Farr.

In General, people in each province to buy Mick shares if they meet certain criteria, he noted. That criteria is exhaustive two exceptions:

Accredited investor exemption

• The investor's income must be $ 200,000 in each of the past 3 years, including the current year; OR,
• Of the investor and spouse income must be $ 300,000 combined in each of the past 3 years, including the current year; OR,
• Investor's net financial assets (i.e. assets of real estate-liabilities) is 1 million dollars or more.

"Accredited Investor" the Declaration is made by the investor himself for "a system of honour," says Farr.

Minimum investment exemption

• Anyone can buy a Mic shares if their initial purchase is at least $ 150,000.
• Subsequent purchases may be less than $ 150,000.

On these two provisions, which is above individual provinces have additional exceptions, which allow individual investors to purchase MICs.

For the people of BC. NB, NS, NFLD

• Investors can typically buy the Mic shares in any sum until they receive "offering memorandum" from Mick.
• Offering memorandum is mainly of detailed disclosure document. Among other things, it describes the MIC's risks management, conditions and objectives.

For the inhabitants of AB, MB, SK, QC, PEI and territories

• "Offering memorandum" exemption exists in these provinces, as well as. it allows individual investors to buy shares Mic if they:
• Purchase of less than $ 10,000 in one "trade;" OR,
• Net assets (housing assets +-residential assets-liabilities) of more than $ 400,000; OR,
• Of investor income is $ 75,000 in each of the past 3 years, including the current year; OR,
• The income of the investor and the spouses is $ 125 000, combined in each of the past 3 years, including the current year.

For residents of Ontario

• No other exemptions exist for the typical individual investors, apart from the accredited investor and minimum investment exceptions described above.

For purchases of publicly traded MICs

• Each in each province to invest in publicly traded MICs.
• Here's an article on publicly traded Canadian capitalist MICs.

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We must remind everyone that this is not an investment or legal advice. Has not been finally/an exhaustive list of regulations. As a result, investors should consult with a licensed investment advisor before purchasing Mic or in any information, Mick online.

Also, as a point of interest rules for share purchases, Mick is largely based on where the purchaser lives. For example, British Colombia Mic (with no physical presence in Ontario), which sells the shares to an investor for an individual resident in Ontario, will still need to ensure that investors accredited investor and/or requirements for a minimum purchase of Ontario.

Regulations, MICs are compelling investment class. Just ensure you make many due diligence. One of the best lists for purchase, Mick is still, this is retired from Wayne Strandlund of Fisgard Capital Corporation.

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Bar: we would like to thank Jeremy for all its manual Farr with the above rules. Mr. Farr began his career in the securities, as well as the right technologies and is a prominent expert in the field of mortgage investment companies. He also serves as Director of the Evergreen Mortgage Corp. contact connection

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Rob McLister, THIS YEAR'S CMT MUSIC