Regulatory Alerts2020-02-27
Draft Regulation 45-110 respecting Start-up Crowdfunding Registration and Prospectus Exemptions
Canadian securities regulators issued Draft Regulation 45-110 to establish a prospectus exemption for start-up crowdfunding distributions and define the operational requirements for funding portals. The regulation mandates that issuers disclose specific financial and business information via Form 45-110F1 while limiting aggregate fundraising to $1,000,000 annually and individual investment caps to $2,500 or $5,000. It further imposes strict compliance obligations on funding portals, including investor verification, asset segregation, and the handling of withdrawal rights and fund distributions.
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