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Canadian securities regulators propose new nationally harmonized crowdfunding rules

  • Securities - CSA Image

Feb 27, 2020

On February 27, 2020, the Canadian Securities Administrators (CSA) is seeking comment on proposed harmonized rules for start-up securities crowdfunding. Proposed National Instrument 45-110 "Start-up Crowdfunding Registration and Prospectus Exemptions" would replace and enhance the requirements currently in effect in British Columbia, Alberta, Saskatchewan, Manitoba, Québec, New Brunswick and Nova Scotia. Comments are requested by May 27, 2020.

Enhancements from the current requirements include: 

  • Increasing to $1 million (from $500,000) the maximum total amount that could be raised by a business under the crowdfunding prospectus exemption per year;
  • Increasing to $2,500 (from $1,500) the maximum investment a purchaser can make in an offering, with a higher limit of $5,000 if the purchaser obtains advice from a registered dealer that the investment is suitable for the purchaser;
  • Requiring funding portals to annually certify that they have sufficient working capital to continue operations for the following year.

Review the press release on the CSA's website and the proposed National Instrument on the OSC's website.

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