Canada regulators set to allow crowdfunding in equity investing
TORONTO, March 20
TORONTO, March 20 (Reuters) - The power of the crowd may soon be harnessed to help fund business startups in Canada, with several provincial securities regulators publishing proposed rules on Thursday that would allow large numbers of people to invest small amounts in promising projects.
The rule changes could offer a lifeline to the country's technology community, which often turns to U.S. investors and companies to fund early-stage growth.
Crowdfunding has proven a popular way for artists and others to raise money, but in Canada it has not involved equity stakes in projects.
The Ontario Securities Commission - the country's biggest capital markets watchdog - said its new rules would allow registered online portals to collect up to C$2,500 ($2,200) per investment from small-scale investors.
Such investors will be allowed to invest up to a total of C$10,000 a year.
"Today we have proposed new tools, which will transform Ontario's exempt market by providing greater access to capital for businesses and expanding investment opportunities for investors," OSC Chairman Howard Wetston said in a statement.
Regulators in Alberta, Quebec, Saskatchewan and New Brunswick published a joint proposal similar to the OSC document. The releases start a 90-day consultation period.
Bill Rice, who heads both the Alberta Securities Commission and an umbrella group of Canadian regulators, said serious effort has been put into aligning the proposals.
"Differences in regulatory approach reflect differences in local experience and feedback," he said. "Our intent is to review the submitted comments and achieve as much harmonization as possible before the final rules come into force."
($1=$1.12 Canadian) (Editing by Peter Galloway)