Proposed crowdfunding exemptions

Submitted by admin on Tue, 05/06/2014 - 12:07

crowdfunding

Crowdfunding is coming soon to a securities regulator near you

Companies are continuously finding innovative ways to use crowdfunding to raise money for specific projects, but it has never involved the issuance of securities until now.

The Nova Scotia Securities Commission, in conjunction with other members of the Canadian Securities Administrators, published for comment on March 2014 the Integrated Crowdfunding Prospectus Exemption (the Crowdfunding Exemption) and the Start-Up Crowdfunding Prospectus Exemption (the Start-Up Exemption). The proposed exemptions would allow both reporting and non-reporting issuers to raise capital through internet portals.

The proposed crowdfunding exemptions are intended to cut through the red tape to give companies a new cost effective way to raise capital and give investors more opportunities to invest in start-ups and small and medium size enterprises (SMEs) at different stages in growth.

The main differences between the proposed exemptions are that the Start-Up Exemption:

· Is available to non-reporting issuers only
· Does not require portal registration
· Allows for lower capital raising and investment limits

All CSA participating jurisdictions welcome written comments until June 18, 2014. There will be public consultation meeting at the NSCC Kingstec and Waterfront Campuses in June.

Please see invite for more information.

Failure to file annual financial statements.
Failure to file interim financial statements.
Failure to file an annual or interim management’s discussion and analysis (MD&A) or an annual or interim management report of fund performance (MRFP).
Failure to file an Annual Information Form (AIF).
Failure to file a certification of annual or interim filings required by Multilateral Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings (MI 52-109).
Failure to file required proxy materials or a required information circular.
Failure to file an issuer profile supplement on the System for Electronic Disclosure by Insiders (SEDI).
Failure to file a material change report.
Failure to provide a written update after filing a confidential report of a material change.
Failure to file a business acquisition report.
Failure to file annual oil and gas disclosure prescribed by National Instrument 51-101 Standards of Disclosure of Oil and Gas Activities (NI 51-101) or technical reports for a mineral project required under NI 43-101 Standards of Disclosure for Mineral Projects (NI 43-101).
Failure to file a mandatory news release.
Failure to file corporate governance disclosure as required by national Instrument 58-101 Disclosure of Corporate Governance Practices (NI 58-101).
Failure to file audit committee disclosure as required by Multilateral Instrument 52-110 Audit Committees (MI 52-110) or BC Instrument 52-509 Audit Committees.
Failure to include disclosure in an issuer’s MD&A relating to disclosure controls and procedures and their direct effectiveness that is referred to in a certificate filed under MI 52-109.
Financial statements of the reporting issuer, or the auditors’ report accompanying the financial statements, do not comply with the requirements of NI 51-102 Continuous Disclosure Obligations (NI 51-102), National Instrument 81-106 Investment Fund Continuous Disclosure (NI 81-106) or National Instrument 52-107 Acceptable Accounting Principles, Auditing Standards and Reporting Currency (NI 52-107).
The reporting issuer has acknowledged that its financial statements, or the auditors’ report accompanying the financial statements, may no longer be relied upon.
The reporting issuer’s AIF, MD&A, MRFP, information circular, or business acquisition reports do not contain information for each of the content items required by NI 51-102 or NI 81-106.
The reporting issuer’s technical disclosure or other reports do not comply with the disclosure requirements of NI 43-101 or 51-101.
Failure to pay a fee required by the Act or the regulations.
Failure to comply with any other requirement related to continuous disclosure.