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Below is a link to the proposed Crowdfunding Exemption and the Startup exemption. These exemptions address both the securities issuer and portals.



What is Crowdfunding:  The short answer; the act of raising a little bit of money from a lot of people. Previously, Crowdfunding did not involve the issuing of securities. However, it is evolving into the realm of securities distribution and therefore Securities Regulators are taking an interest in the concept and are addressing ways to ensure that the mandate of protecting the public / unsophisticated investors take effect in meaningful ways, given the potential usefulness of the vehicle to entrepreneurs and businesses alike. In an effort to make the legislation meaningful, the regulators are calling for comment on the proposed Multilateral Instrument 45-108 – Crowdfunding.

Under MI 45-108, there will be two streams which will co-exist. These are the more stringent Crowdfunding Exemption, and the less, Startup Exemption. The MI addresses both issuers and Portals (which are required in order to raise under one of the exemptions). A summary of high points follows:

Crowdfunding Exemption:

  • head office must be in Canada;
  • ongoing disclosure proposed;
  • not available to real estate issuers who are not reporting issuers;
  • issuer is required to have a written business plan;
  • maximum raise of $1.5 million dollars per 12 month period;
  • strict soliciting / advertising restrictions;
  • $2,500 cap on investment per transaction / $10,000 cap per year;
  • streamlined disclosure;
  • if $500,000 threshold achieved, annual statements must be audited;
  • Portals must be registered as a restricted dealer;
  • Portal cannot handle funds.

Startup Exemption:

  • Head office must be in a participating jurisdiction;
  • maximum raise of $150,000 per offering;
  • exemption can be used a maximum of twice per year;
  • no concurrent offering using same exemption for same project;
  • can only make offering materials available via portal website;
  • cap of $1,500 on single investment;
  • no ongoing disclosure requirement;
  • promoter, officer, director and control person of the issuer deliver a completed individual information form 10 days prior to offering;
  • Portals need not register.

The proposed Multilateral Instrument 45-108 Crowdfunding contains many more provisions and details. The link can be found here:



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