Certain Canadian Securities Regulators Adopt Crowdfunding Prospectus Exemption For Start-Ups

Recognizing there is often a funding gap for early stage businesses, securities regulators in British Columbia, Saskatchewan, Manitoba, Québec, New Brunswick and Nova Scotia (the "Participating Provinces") have adopted substantially harmonized registration and prospectus exemptions proposed under Multilateral Instrument 45-108 – Crowdfunding. The exemptions aim to provide start-up and early stage companies with an alternative to raise capital with fewer disclosure requirements. The exemptions are available to non-reporting issuers and prospective investors in the Participating Provinces now and will be available for five years, expiring on May 13, 2020.

Prospectus Exemption

Securities laws require a company to file a prospectus and receive a receipt prior to distributing securities to investors. While a prospectus is a useful tool to provide information to investors, the expense and time incurred in preparing it may act as a bar to more junior companies looking to