Start Me Up! A New Equity Crowdfunding Exemption Adopted

As one more step in the current overhaul of Canada's exempt market, securities regulators in British Columbia, Saskatchewan, Manitoba, Québec, New Brunswick and Nova Scotia (the Crowdfunding Jurisdictions) have each adopted substantially harmonized registration and prospectus exemptions that permits non-reporting issuers to raise capital from large groups of investors.

The crowdfunding exemption consists of two elements: a prospectus exemption (the Prospectus Exemption) permitting issuers to distribute securities without a prospectus; and a registration exemption (the Registration Exemption) permitting an online funding portal to assist with the distribution without being registered as an investment dealer under securities laws.  Previously, crowdfunding was only permitted in Canada in the absence of a distribution of a security.