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Regulators Publish Crowdfunding Exemption and Registration Framework for Funding Portals

  • Securities - CSA Image

Nov 05, 2015

On November 5, 2015, the securities regulatory authorities in Manitoba, Ontario, Québec, New Brunswick and Nova Scotia (collectively, the participating jurisdictions) published in final form Multilateral Instrument 45-108 "Crowdfunding", which introduces a crowdfunding prospectus exemption for issuers as well as a registration framework for funding portals.

The MI 45-108 crowdfunding regime will enable businesses to benefit from greater access to capital from a large number of investors online, through a funding portal operated by a registered dealer.

Among the measures adopted to protect investors, issuers will be required to distribute their securities through a registered funding portal. These funding portals will fulfill certain gatekeeper functions that include reviewing the issuer’s disclosure and obtaining background checks on the issuer and its directors, executive officers and promoters.

In addition, investment limits based on the investor’s income and financial resources have been adopted as a means of reducing their exposure to a risky investment.

Provided all necessary Ministerial approvals are obtained, MI 45-108 will come into force in the participating jurisdictions on January 25, 2016.

Review final form of MI 45-108 on the OSC's Web site.

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