Crowdfunding Alert: OSC Allows Equity Crowdfunding Platform For Ontario Accredited Investors

"The OSC has announced an “exemptive relief order” which will permit the sales of securities via crowdfunding platforms" Photo Source: OSC Website

The OSC has announced an “exemptive relief order” which will permit the sales of securities via crowdfunding platforms – Photo Source: OSC Website

In an important step towards establishing equity crowdfunding in Canada, the Ontario Securities Commission (the “OSC”) has released a significant decision which allows MaRS VX, a not-for-profit entity and a wholly-owned subsidiary of MaRS Discovery District,  to operate an online platform (the “MaRS Platform”). The MaRS Platform will facilitate “impact investing” by bringing together Ontario accredited investors and small or medium-sized ventures or funds. To qualify, ventures or funds must have less than $25 million in revenues at the time of initial access to the online platform, a prioritized mission, earned revenues and proven “social impact” or “environmental impact”, including for-profit corporations, non-profit corporations, for-profit cooperatives and non-profit cooperatives. The MaRS Platform will have two portals: one public and the other private (the “Private Portal”).

The decision grants exemptive relief to MaRS VX from a major Ontario securities law hurdle to operating crowdfunding sites: the know-your-client and suitability requirements (the “KYC Requirements”). Seeking to balance investor protection concerns and the objective of MaRS VX to bring together investors and certain issuers in need of capital, the OSC’s decision sets out operating parameters for the MaRS Platform. These requirements include:

1.  Access to the Private Portal will be password-protected. The Private Portal will only be accessible to:

a.  Ontario “accredited investors” who have signed a written agreement and provided supporting documentation to establish their status and their residence; and

b.  issuers seeking to raise capital on a private placement basis via the issuance of debt or equity securities that have satisfied certain access criteria, provided supporting documentation and signed a written agreement agreeing to comply with the certain OSC-imposed requirements.

2.  MaRS VX will monitor the Private Portal and any interactive communication channels on its website. MaRS VX must remove any material from the Private Portal or its website that it deems inappropriate, including material that raises investor protection concerns.

3.  Directors and officers of issuers using the Private Portal will provide comprehensive background information to MaRS VX and consent to criminal record and other background checks.

4.  MaRS VX must comply the registration requirements of an exempt market dealer under applicable Ontario securities laws, with the exception of the KYC Requirements.

Requirements continue on next page.

Pages: 1 2

Canada’s CrowdFunding News

FinTech Market Study May Lead to Important Regulatory Changes in CanadaMondaq News Alerts (registration)Various financial services, including bank accounts, methods of financing such as crowdfunding, money transfers and payme [...]

The Sequel: Funding for content creation in CanadaStreamDailyThe show has also nabbed some brand sponsors (a brand manager at computer security software and fan of the show WatchGuard approached Lengyel for product integratio [...]

Financial PostThe amazing disappearance of the Canadian Public CompanyFinancial PostSince 2007, the number of publicly listed companies in Canada has dropped 16.7 per cent, according to statistics from TMX Group Ltd., the com [...]

Insurance BusinessFinancial Focus: AIG debuts crowdfunding insurance product in Canada, UKInsurance BusinessThe Crowdfunding Fidelity product, which is currently available in the UK and Canada, shields individual investors ag [...]

Western Investor (subscription)Crowdfunding fails to gain traction in CanadaWestern Investor (subscription)While Toronto-based NexusCrowd Inc. has raised an estimated $1.5 million for commercial real estate projects through t [...]

Insurance Business Canada (blog)AIG debuts crowdfunding insurance product in Canada, UKInsurance Business Canada (blog)The Crowdfunding Fidelity product, which is currently available in the UK and Canada, shields individual i [...]

Crowdfund InsiderBrief: KoreConX Helps Canadian Equity & Debt Crowdfunding Platforms Accept Investment by Credit CardCrowdfund InsiderKoreConX, a free all-in-one solution that is disrupting the market by helping companies [...]

Globalnews.caFormer 3D printer co-owner allegedly embezzles crowdfunding money to build Sask. houseGlobalnews.caGrayston says he is hopeful the situation can be resolved and wants to get his Peachy Printer project back on tra [...]

Live Crowdfunding .tv

Canada's Crowdfunding Today ....MORE VIDEOS