Will Crowdfunding "Kickstart" Ontario’s Exempt Market?

On March 20, the Ontario Securities Commission (OSC) along with its counterparts in Quebec, New Brunswick, Nova Scotia, Manitoba, and Saskatchewan, unveiled the proposed rules to deal with crowdfunding (among other things) as a source of capital for start-ups and SMEs. The comment period ends on June 18. In a sense, the OSC is playing catch-up, in that the US and UK regulators seem to be one or two years ahead of the OSC in permitting and regulating crowdfunding.

Most advocates for crowdfunding seem generally pleased with the proposals, which would allow issuers to raise up to $1.5 million in a twelve month period, without having to undergo the expense of producing a prospectus. Some investors' rights groups are less pleased, but it appears the OSC has at least attempted to strike a balance between these competing interests. This is no surprise, as the proposals are the result of more than a year of consultation with stakeholders.