Crowdfunding Prospectus Exemption

On September 21, 2017, following the results of a stakeholder survey conducted over the course of the year to date, the British Columbia Securities Commission (BCSC) announced changes to the existing equity crowdfunding rules found in British Columbia Instrument 45-535 – Start-up Crowdfunding Registration and Prospectus Exemptions (BCI 45-535) to address two of the most

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On October 31, 2016, the Alberta Securities Commission (ASC) adopted Multilateral Instrument 45-108 Crowdfunding (MI 45-108) which will allow small or medium sized businesses (Target Businesses) to raise more capital through crowdfunding offerings across multiple jurisdictions in Canada than is possible under ASC Rule 45-517 Prospectus Exemption for Start-up Businesses (ASC Rule 45-517) which was adopted by the ASC on July 29, 2016.  Both MI 45-108 and ASC Rule 45-517 (collectively, the Growth Initiatives) provide Target Businesses with an exemption from prospectus requirements.  The Growth Initiatives are in place of proposed MI 45-109 Prospectus Exemption for Start-up Businesses published by the ASC and the Nunavut Securities Office.

The Growth Initiatives are aimed at addressing Target Businesses’ need for a cost effective and simple way to raise capital in a difficult economic environment by raising small amounts of money from a large number of people, commonly referred to as crowdfunding.  The Growth Initiatives offer different avenues that Target Businesses can use to overcome the hurdle of attracting investment without the high transactional costs of completing a prospectus offering.


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