REGULATORY UPDATE
Raising Money in Ontario - What’s Up
with Crowdfunding and Other Initiatives?
By Michael J. Hanley
The Ontario Securities Commission (OSC) has
signaled its intention to propose new prospectus
exemptions, including a ‘crowdfunding’ exemption,
which will make it easier, particularly for start-ups and
early-stage entities, to raise money through equity
financing. On March 20, 2014, the OSC published draft
legislation which would implement four new capital
raising prospectus exemptions:
• crowdfunding
• offering memorandum
• family, friends and business associates
• existing security holders of listed companies
Certain details of these proposed exemptions,
which will not be available to investment funds, are
described below.
Equity Crowdfunding
The new ‘crowdfunding’ exemption proposed
by the OSC would permit Canadian entities (Issuers)
to raise capital from the public by the issuance of
securities through an independent and regulated
website called a ‘Portal’. This exemption is designed
to enable an issuer to access a potentially large
number of equity investors on a cost-effective basis
via the internet and social media, regardless of an
Michael J. Hanley
Partner, Business Law
and Corporate Finance
and Securities Groups
Torkin Manes LLP
www.torkinmanes.com
