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OSC Exempt Market Review – OSC Staff Consultation Paper 45-710 – Considerations for New Capital Raising Prospectus Exemptions (“CP 45-710”)
Letter Summary:
While the addition of a crowdfunding exemption may ultimately prove to be useful for SMEs, it would be difficult to determine its efficiency until the exemption is in place and has been monitored for a few years. At first glance, crowdfunding appears to be inconsistent with many principles and procedures used in the current securities regime in Canada, but given the growing popularity of this idea in the U.S., it will likely become popular in Canada as well, including for the distribution of securities, and thus must be addressed by the regulators.
Overview of the Council’s Comments:
WedonotbelievethereareanyadditionalprospectusexemptionsthattheOSCshouldconsider. The existing prospectus exemptions, together with the proposed harmonized family memberandofferingmemorandumexemptions,shouldprovideSMEswithampleopportunities for fund raising while balancing investor protection considerations.