The Alberta Securities Commission (ASC) has adopted multilateral instrument 45-108 Crowdfunding (MI 45-108). The new rule is available immediately and introduces a crowdfunding prospectus exemption for issuers, as well as a registration framework for funding portals.
The implementation of MI 45-108 follows the recent adoption of ASC rule 45-517 Prospectus Exemption for Start-up Businesses (ASC rule 45-517), which was introduced to help facilitate Alberta-based small or start-up issuers seeking to raise modest amounts of capital from Alberta investors. MI 45-108 is viewed as complementary with ASC rule 45-517 and is designed to accommodate moderate financings being raised strictly through an online funding portal across multiple Canadian jurisdictions.
“Small- and medium-sized businesses have unique needs and often limited resources. We believe that the introduction of these rules creates an attractive financing platform for these companies to raise funds locally and across Canada, while at the same time providing an appropriate level of investor protection,” says Stan Magidson, chair and CEO of the ASC, in a release.
Details on ASC rule 45-517 and MI 45-108 can be found on the ASC website.
The rules are outlined briefly below.
|ASC rule 45-517||MI 45-108|
|Investment limits (per investor)||$1,500 per distribution|
$5,000 with positive suitability advice from a registered dealer
|$2,500 per distribution|
$25,000 for accredited investors
|Offering limits||$250,000 per offering|
Maximum 2 offerings per year
Lifetime limit $1,000,000
|$1,500,000 per 12 months|
|Online funding portals||No registration exemption|
Use of funding portal not required
|Must use a registered funding portal|