A decision by the Canadian Securities Administration on June 23 to harmonize securities crowdfunding rules could be a huge blessing for Canadian business.
On June 23 the Canadian Securities Administrators (CSA) introduced National Instrument 45-110 Start-up Crowdfunding Registration and Prospectus Exemptions.
According to Canadian online private markets investing platform FrontFundr, the additional access afforded to Canadian accredited and retail investors will open up capital markets at a crucial point and benefit the businesses, investors, innovators and job seekers.
“Though equity crowdfunding has existed in Canada in some form or another since 2015 it has, up until now, been largely regulated on a provincial level, and lacked the consistent, continuous approach on a national level that has helped this funding model flourish elsewhere,” FrontFundr said in a statement. “In the UK, for example, 2020 was a record-breaking year for equity crowdfunding, as it helped raise over CDN $570 million for 433 businesses, with more growth forecast for 2021.”
The main changes introduced by 45-110 are a tripling of the amount companies can raise in a 12-month period to $1.5 million, an increase in the allowable individual investment from $1,500 to $2,500 ($10,000 if approved by a registered dealer), and the permission for associations to engage their members as investors.
“This is a watershed moment for Canadian investment crowdfunding,” said FrontFundr founder and CEO Peter-Paul Van Hoeken. “We have seen the immense value and impact that harmonized crowdfunding rules have had in the US and the UK, and so we are really excited to work with Canadian companies and investors to help create the same sort of environment over here.”
