The Ontario Securities Commission released a paper today intended to initiate a broad consultative process to consider a number of potential new capital raising prospectus exemptions.
Specifically, the consultation paper canvasses the exemptions currently available in various jurisdictions, including the U.S., Australia and the U.K. These exemptions are generally based on (i) investor attributes (such as income and financial assets); (ii) relationships with the issuer (such as the family, friends and business associates exemption available in jurisdictions other than Ontario); (iii) investment size (such as Ontario's $150,000 minimum investment amount exemption); (iv) disclosure; (v) "crowdfunding"; and (vi) offering size.
With respect to "crowdfunding" (which is the popular term for funding a project or venture through small amounts of money raised from a large number of people over the internet via an internet portal intermediary), the potential for an exemption is examined using the provisions of the U.S. JOBS Act as a basis for discussion. Issues considered include issuer restrictions, investor protection measures, and the registration of funding portals. The paper also explores a potential OM exemption (which, unlike other Canadian jurisdictions, is not available in Ontario under NI 45-106) with a $1.5 million limit on the amount of capital that could be raised by an issuer in a 12-month period and a limit on a purchaser's annual investment of $10,000. The concept OM exemption is not intended to be a recommendation and was provided by the OSC for discussion purposes.
To read the full, original article click on this link: Canadian Crowdfunding? OSC Releases Consultation Paper On Potential Prospectus Exemptions - Corporate/Commercial Law - Canada
