The Ontario Securities Commission has published
Multilateral Instrument 45 – 108, which introduces
a crowdfunding prospectus exemption for issuers in conjunction with
a registration framework for funding portals.
The attraction of crowdfunding is that it allows businesses
(primarily small to medium-sized enterprises) to gain increased
access to capital from a large pool of investors via a funding
portal that will be operated by a registered dealer.. The rules
established under MI 45-108 create an exemption for the prospectus
requirements imposed under the Ontario Securities Act.
Nevertheless, the crowdfunding regime imposes requirements aimed at
protecting the investing public, including limits on how much can
be raised from individual investors, and how much can be raised in
total, as well as requirements in respect of disclosure at the time
the funds are raised and ongoing disclosure thereafter.
