OSC Unveils New Initiatives to Enhance Capital Access for Angel Investors and Startups
Admin3The Ontario Securities Commission (OSC) has recently introduced several initiatives to facilitate early-stage business funding and improve access to capital for businesses in the province. These measures, which are part of the OSC TestLab program, aim to support capital-raising efforts by evaluating innovative approaches to regulation and fostering a favorable environment for capital market growth.
The TestLab program focuses on testing new regulatory approaches and encouraging capital market innovations, ultimately contributing to a more vibrant and dynamic economy in Ontario. By addressing the funding challenges faced by early-stage businesses, the OSC hopes to stimulate growth and create opportunities for entrepreneurs and investors alike. The Ontario Securities Commission (OSC) has introduced several measures as part of its TestLab program to improve access to capital for early-stage businesses in the province.
These initiatives include, Extension of the Self-Certified Investor Prospectus Exemption until October 2025, providing new sources of capital for businesses and increased investment opportunities for qualified investors, Temporary Dealer Registration Exemptions for early-stage businesses and not-for-profit angel investor groups, supporting their efforts to connect investors with Ontario-based early-stage businesses seeking capital, Streamlined Distribution Reporting through a quarterly e-form (Form 32-509F2/45-509F1 - Alternative Report of Exempt Distribution) to simplify reporting requirements for exempt distributions. These time-limited initiatives aim to strike a balance between improving access to early-stage capital and maintaining appropriate investor protections. The OSC will use data and insights gathered from these initiatives to inform future policymaking and promote a thriving capital market for early-stage businesses in Ontario.
The Ontario Securities Commission (OSC) has unveiled interim class orders that introduce new measures designed to boost capital access for early-stage businesses in Ontario. The orders state that companies looking to secure capital from investors may be obligated to register as dealers, while not-for-profit angel investor groups engaged in trading or advising could also be subject to registration requirements. To address these requirements, the OSC has established a new dealer registration exemption for early-stage businesses, enabling them to raise up to $3 million in capital without the need for dealer registration.
There are two distinct pathways through which this exemption can be applied.The first exemption permits businesses to market their securities with assistance from either a registered dealer or an intermediary that is not required to register as a dealer, such as a crowdfunding portal or an angel investor group. The second exemption applies to businesses that raise funds without the involvement of these intermediaries. The OSC's primary goal is to streamline the capital-raising process for early-stage businesses while ensuring adequate investor safeguards are in place. Data and insights gathered from these initiatives will be utilized to guide future policy decisions and facilitate growth within the early-stage business environment in Ontario.
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