The Alberta Securities Commission (ASC) announced Monday the adoption of a new rule that creates a crowdfunding prospectus exemption.
The move follows similar measures that were introduced in several provinces — Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick and Nova Scotia — back in January.
The new exemption in Alberta largely follows Ontario by imposing annual limits on crowdfunding investments and these sorts of offerings. Certain provinces have not adopted these limits, but Alberta indicates that it proposed to align with the approach in Ontario, in order to address investor protection concerns with allowing crowdfunding. In addition to the limits, issuers are also required to use a registered funding portal to take advantage of the exemption.
The new crowdfunding exemption is intended to complement a new prospectus exemption that was recently introduced for start-ups in Alberta, the ASC says in a news release, “and is designed to accommodate moderate financings being raised strictly through an online funding portal across multiple jurisdictions in Canada.”
“Small and medium-sized businesses have unique needs and often limited resources. We believe that the introduction of these rules creates an attractive financing platform for these companies to raise funds locally and across Canada, while at the same time providing an appropriate level of investor protection,” adds Stan Magidson, chairman and CEO of the ASC.
See: Crowdfunding regime takes effect
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