On May 6, 2016, the B.C. Securities Commission (Commission) adopted BC Instrument 72-505 Exemption from prospectus requirement for crowdfunding distributions to purchasers outside British Columbia (BCI 72-505). BCI 72-505 creates an exemption from the prospectus requirement for B.C. issuers that distribute securities to purchasers resident outside of B.C. using Multilateral Instrument 45-108 Crowdfunding (MI 45-108), which has not been otherwise adopted in B.C.
To qualify for the prospectus exemption under BCI 72-505, the following conditions must be met:
- the distribution must not be made to a purchaser resident in B.C.;
- the purchaser must purchase the security as principal;
- the purchaser must certify in the subscription agreement that the purchaser is not resident in B.C.;
- the issuer must comply with the requirements of MI 45-108 in the jurisdiction where the purchaser is resident; and
- if the issuer is concurrently offering securities to a purchaser resident in B.C. using British Columbia Instrument 45-535 Start-up Crowdfunding Registration and Prospectus Exemptions (BCI 45-535), the issuer must provide the purchaser resident in B.C. with the same disclosure provided to purchasers in other jurisdictions under MI 45-108.