With the U.S. heading in this direction, it’s really important that Ontario keep pace if not even try to get out in front
The Ontario government appears set to support changes to securities laws to allow everyday investors to buy small ownership stakes in early-stage companies not yet ready to list on public markets, a move that could help prevent the potential drain of Canadian startups south of the border.
At a conference in Toronto Thursday morning, Brad Duguid, minister of economic development and innovation, spoke about the potential benefits that equity-based crowdfunding provides for entrepreneurs and said once the Ontario Securities Commission completes a review, the provincial government would look at ways to move forward with changes.
The minister told the audience at the Technicity conference that the changes could even be in place before changes to U.S. laws under the Jumpstart Our Business Startups (or JOBS) Act come into force.
“With the U.S. heading in this direction, it’s really important that Ontario keep pace if not even try to get out in front if we can do that in a way that ensures protection for consumers and investors,” Mr. Duguid said in an interview…
The Technicity conference brought together advocates of equity-based crowdfunding through online platforms including Cindy Gordon, the chair of the Canadian Advanced Technology Alliance’s division Invest CrowdFund Canada, which has been lobbying for legislative change through the country’s securities regulators.
“Everyone’s trying to grapple with how best to put this into play to make sense for the investors, investees and obviously there’s always a concern about fraudulent risk so there needs to be a fair bit of thoughtfulness about this,” she said.
“The good news is there are models and frameworks that the U.S. has architected with the JOBS Act and now it’s been legalized in the Netherlands and Italy and they’re doing it in the U.K. and Australia.”