One of the attractive aspects of Reg A+, as created by the JOBS Act of 2012, is the fact issuers may immediately trade securities following a funding round. This has led to a growing number of SMEs to raise capital under Reg A+ and quickly list shares on NYSE, NASDAQ or OTC Markets.
As the rule is still quite new, regulators continue to adapt to the new exemption. This holds true for Canada, a country that has leveraged Reg A+ for cross border funding rounds.
Earlier this week, the Ontario Securities Commission (OSC) published a document recognizing the ability for Reg A+ issues to trade immediately as well. The approval was noted in a tweet by Alixe Cormick, a Canada based securities attorney and a leader in the crowdfunding movement.
Good new Ontario reporting issuers! OSC Rule 72-503 s. 2.3 recognizes stock issued to U.S. residents under Regulation A as freely tradeable – no resale restriction in Canada. Effective March 18, 2018. https://t.co/MAbEHyEyLk … pic.twitter.com/lwBSEWsreR
— Alixe Cormick (@AlixeCormick) December 21, 2017
While not a major change, the approval brings “greater certainty to cross-border activities” while making Reg A+ more amenable to issuers. While the Canadian securities market is governed by multiple provincial regulators, Ontario is the financial center and other provinces should follow suit.Reg A+ OSC rule_20171221_72-503_rfc_distributions-outside-canada