The Autorité des marchés financiers (Québec), the Financial and Consumer Affairs Authority of Saskatchewan, Financial and Consumer Services Commission of New Brunswick, the Manitoba Securities Commission and the Nova Scotia Securities Commission (CSA Participating Jurisdictions) published on March 20, 2014 for a 90-day comment period

  • the integrated Crowdfunding Prospectus Exemption (Crowdfunding Exemption

The Autorité des marchés financiers (Québec), the Financial and Consumer Affairs Authority of Saskatchewan, Financial and Consumer Services Commission of New Brunswick, the Manitoba Securities Commission and the Nova Scotia Securities Commission (CSA Participating Jurisdictions) published on March 20, 2014 for a 90-day comment period

  • the integrated Crowdfunding Prospectus Exemption (Crowdfunding Exemption); and
  • the draft blanket order relating to the Start-up Crowdfunding Prospectus and Registration Exemption (Start-up Exemption).

In line with the Crowdfunding Exemption and the Start-up Exemption, the CSA Participating Jurisdictions also published proposed registration rules and exemptions applicable to the funding portals participating in crowdfunding (Portal Requirements).

The British Columbia Securities Commission concurrently published a local notice soliciting comments on the Start-up Exemption. The Financial and Consumer Affairs Authority of Saskatchewan implemented an exemption for start-up and small businesses and their portals on December 6, 2013. No portals have yet been established in Saskatchewan. Although the Alberta Securities Commission has not published any material, it will be considering the public comments received in respect of the other published materials.

The Ontario Securities Commission has not yet addressed the Start-up Exemption.

This bulletin focuses on the Start-up Exemption, but you can read our reports on the Crowdfunding Exemption and the Portal Requirements. Both the Crowdfunding Exemption and the Start-up Exemption will coexist as they target issuers at different stages of development.

The Start-up Exemption is aimed at providing an alternative source of capital to non-reporting issuers at a very early stage of development. The requirements for the issuers under the Start-up Exemption are less onerous compared to those under the Crowdfunding Exemption. The requirements under the Start-up Exemption are also less onerous for portals since, unlike portals for the Crowdfunding Exemption, portals for the Start-up Exemption will be exempt from registration.  The Start-up Exemption still provides some requirements for the portals used in connection with the Start-up Exemption.
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On Wednesday, the CSA published their proposed amendments to implement Stage 3 of the point-of-sale regime that would require delivery of Fund Facts to investors before purchase orders are submitted.  Highlights of proposed Stage 3 are:

  • Only 2 exceptions to pre-delivery: (i) pre-authorized purchase plans (similar to current simplified prospectus delivery exemption currently in place),