OSC puts crowdfunding on agenda for new year

Financial Post | Business

Canada’s biggest capital markets regulator is preparing rules that would allow equity crowdfunding for the first time, something early-stage companies have been clamouring for as a cheaper alternative to IPOs.

A proposed prospectus exemption to allow crowdfunding will be published by the Ontario Securities Commission in the first quarter of next year, with an accompanying “registration framework” for online funding portals, the regulator said Wednesday.

It will be subject to a 90-day comment period from interested market participants, so it won’t immediately allow crowdfunding, where small contributions from a large number of investors are pooled in exchange for securities. Nevertheless, it is the clearest sign since the OSC began mulling crowdfunding in late 2012 that a regulatory framework to support this method of raising capital will be created in Canada.

“I do think the OSC is definitely going to move forward with some form of crowdfunding and is taking it…

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