OSC Unveils Fresh Initiatives to Enhance Provincial Businesses’ Access to Capital

"Ontario Securities Commission (OSC) Unveils Strategic Measures to Facilitate Capital Access for Early-Stage Businesses Across the Province"

"The Ontario Securities Commission (OSC) has taken proactive steps to bolster the financial landscape for early-stage businesses in the province by introducing a series of impactful measures. These initiatives, designed to enhance access to capital, mark a significant milestone in the OSC's ongoing commitment to fostering a dynamic and thriving entrepreneurial ecosystem."

"One of the key measures implemented by the OSC is the extension of the self-certified investor prospectus exemption until October 2025. This extension aims to provide continued support and flexibility for early-stage businesses seeking capital, enabling them to navigate regulatory requirements more effectively." In addition to the prospectus exemption extension, the OSC has introduced new, temporary dealer registration exemptions tailored specifically for early-stage businesses and not-for-profit angel investor groups. These exemptions, also effective until October 2025, serve to streamline the investment process, removing barriers and facilitating smoother transactions within the startup community."

These groundbreaking initiatives are part of the OSC's TestLab, an innovative platform dedicated to testing new regulatory solutions and approaches. By leveraging data and insights gathered through these initiatives, the OSC aims to drive informed policymaking and foster an environment conducive to sustainable growth and innovation. The OSC's commitment to supporting early-stage businesses underscores its role as a forward-thinking regulator dedicated to driving economic development and promoting entrepreneurship throughout the province of Ontario."

"OSC Introduces Interim Class Orders: Changes to Capital Raising Requirements for Ontario Businesses""Today, the Ontario Securities Commission (OSC) announced interim class orders that redefine the capital raising landscape for businesses operating in the province. Under these orders, businesses seeking investment from individuals may find themselves subject to dealer registration requirements. Similarly, not-for-profit angel investor groups involved in trading or advisory activities may also face registration obligations."

"One of the key provisions outlined in the OSC's interim class orders is the introduction of dealer registration exemptions tailored specifically for early-stage businesses. Under these exemptions, eligible businesses in Ontario can raise capital of up to $3 million without the necessity of registering as a dealer."

"These exemptions offer flexibility in how businesses market their securities. The first exemption permits businesses to market their securities with the assistance of a registered dealer or an intermediary such as a crowdfunding portal or an angel investor group that does not require dealer registration. The second exemption applies when businesses raise funds without the involvement of such intermediaries."

"However, to qualify for these exemptions, businesses must meet certain criteria. They must be classified as early-stage, employ fewer than 100 individuals, maintain a head office and operational presence in Ontario, and their primary business purpose should not revolve around real estate, mortgages, or similar investments. Additionally, companies dealing with crypto assets or operating gaming or betting businesses are not eligible for these exemptions."These interim class orders represent a significant shift in the regulatory landscape, aimed at fostering innovation and facilitating capital access for early-stage businesses while ensuring investor protection within Ontario's vibrant entrepreneurial ecosystem."