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News Release

Canadian securities regulators propose new nationally harmonized crowdfunding rules

  • Date:

    2020-02-27
  • Number:

    2020/13

Vancouver – The Canadian Securities Administrators (CSA) is seeking comment on proposed harmonized rules for start-up securities crowdfunding.

 Proposed National Instrument 45-110 Start-up Crowdfunding Registration and Prospectus Exemptions would replace and enhance the requirements currently in effect in British Columbia, Alberta, Saskatchewan, Manitoba, Québec, New Brunswick and Nova Scotia.

Enhancements from the current requirements include:

  • Increasing to $1 million (from $500,000) the maximum total amount that could be raised by a business under the crowdfunding prospectus exemption per year;
  • Increasing to $2,500 (from $1,500) the maximum investment a purchaser can make in an offering, with a higher limit of $5,000 if the purchaser obtains advice from a registered dealer that the investment is suitable for the purchaser;
  • Requiring funding portals to annually certify that they have sufficient working capital to continue operations for the following year.

“Small businesses and start-ups need unified regulatory requirements for securities crowdfunding to expand their access to capital,” said Louis Morisset, Chair of the CSA and President and CEO of the Autorité des marchés financiers. “This proposed National Instrument would introduce a single, harmonized set of rules, and increase the thresholds for capital-raising and investing, while still providing appropriate investor protection.”

Since 2015, about 70 distributions of securities have taken place under the existing start-up crowdfunding prospectus exemptions, with an average investment of $734 from each purchaser.

The notice and request for comment can be found on CSA members’ websites. Stakeholders are invited to submit their comments in writing by May 27, 2020.

The CSA, the council of the securities regulators of Canada’s provinces and territories, co-ordinates and harmonizes regulation for the Canadian capital markets.

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For investor inquiries, please refer to your respective securities regulator. You can contact them here.

For media inquiries, please refer to the list of provincial and territorial representatives below or contact us at media@acvm-csa.ca:

Kristen Rose
Ontario Securities Commission
416-593-2336
  

Hilary McMeekin
Alberta Securities Commission
403-592-8186

Brian Kladko
British Columbia Securities Commission
604-899-6713
  

Sylvain Théberge
Autorité des marchés financiers
514-940-2176

Jason (Jay) Booth
Manitoba Securities Commission
204-945-1660

Sara Wilson
Financial and Consumer Services
Commission, New Brunswick
506-643-7045
  

Shannon McMillan
Financial and Consumer Affairs
Authority of Saskatchewan
306-798-4160

Steve Dowling
Government of
Prince Edward Island,
Superintendent of Securities
902-368-4550
  

David Harrison
Nova Scotia Securities Commission
902-424-8586

Jeff Mason
Nunavut Securities Office
867-975-6591  

Renée Dyer
Office of the Superintendent
of Securities
Newfoundland and Labrador
709-729-4909

Tom Hall
Office of the Superintendent
of Securities
Northwest Territories
867-767-9305
  

Rhonda Horte
Office of the Yukon Superintendent
of Securities
867-667-5466