Equity crowdfunding is a go in Saskatchewan, as the Financial and Consumer Affairs Authority (FCAA) today announced that it is implementing an order adopting a new crowdfunding exemption.
The new exemption will allow start-ups and small businesses to raise capital through crowdfunding by selling securities, such as shares, limited partnership units, and promissory notes. The FCAA proposed the exemption for comment earlier in the fall.
As a result of comments received, the FCAA says that it made several material changes to: make it clear that the crowdfunding exemption could be used concurrently with other exemptions; confirming that portals can charge for their services, but they can’t be related to the issuers using them; and, to require that funds being held in trust for investors pending the closing of an offering must be held by a lawyer.
The regulator has not made any changes to proposed investment limits. It allows companies to raise $150,000 twice per year, and limits investors to risking $1,500 per offering. Nor is it going to require portals to register in order to facilitate these offerings.
The Ontario Securities Commission (OSC) has also announced its intention to propose a new equity crowdfunding exemption early next year. Other Canadian regulators have also looked at the idea, although some feel that these offerings should be carried out under their existing offering memorandum (OM) exemptions.