After months of consultation that pitted small businesses hungry for capital against investor protection advocates, the Ontario Securities Commission has finally settled on a securities crowdfunding regime it believes will satisfy both.
Startups and small to medium-sized businesses will be able to tap pools of funds from average investors, but the online “portals” that facilitate crowdfunding will have to register with the OSC and will be held to strict “gatekeeper” roles that include reviewing the disclosure of those who want to raise money, and obtaining background checks on their directors, executive officers and promoters.
The new crowdfunding regime, expected to come into force on Jan. 25, 2016, also contains investment caps based on an investor’s income and financial resources. The caps are meant to reduce exposure to what regulators deem “a risky investment.”
Barbara Shecter -Financial Post – November 5, 2015.
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