In response to a funding gap for early stage businesses, Canadian securities regulators opened up regulations to allow crowdfunding in 2015. Within this framework, many companies have sourced equity from everyday investors through registered dealers or exempt market dealers. Since then the commission has actively sought recommendations from businesses and stakeholders in BC’s tech industry on how to make this exemption more beneficial to participants. Results from these discussions have now materialized into updates to the legislation. (It does pay to respond to surveys!)
Last week the BC Securities Commission announced that it has amended the crowdfunding rules (BCI 45-535 Start-up Crowdfunding Registration and Prospectus Exemptions) to allow issuers based in BC to extend the reach of their crowdfunding campaigns. BC based issuers may now access investors in Alberta as well. This change aims to increase the number of potential sources from which the issuer may seek to raise funds and offer additional opportunities for investors in Alberta.
The BCSC’s amendments also raise the individual investment limit from $1,500 to $5,000, provided the investor has obtained suitability advice from a registered dealer.
With the rise of fintech and a quickly evolving landscape from traditional sources of fundraising, we are happy to see the BCSC’s agility and attention to these fast paced updates. For more information, check out the BCSC’s crowdfunding page or reach out to us!