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Pursuant to National Instrument 45-110 Start-Up Crowdfunding Registration and Prospectus Exemptions (NI 45-110), a funding portal may be operated either by an investment dealer or exempt market dealer (registered funding portal) or pursuant to the registration exemption available in NI 45-110 (exempt funding portal). Registered funding portals are required to provide advice to investors about the suitability of the offered securities while exempt funding portals are prohibited from providing any advice about the suitability of any security for investment or the merits of any investment. Additionally, exempt funding portals must not receive any commission, fee or other similar payment from an investor but there is no such restriction on registered funding platforms.

Due Diligence


A funding portal must take reasonable steps to confirm that the head office of an issuer is in Canada before allowing the issuer to post a crowdfunding distribution on the funding portal’s platform. Registered funding portals have additional obligations for assessing an issuer and proposed offering (Know Your Product) and investors (Know Your Client) in connection with their registration as an investment dealer or exempt market dealer in addition to their suitability obligations (Suitability).



A funding portal must not allow a person to access its platform unless the person acknowledges that they are accessing a platform that, in the case of a registered funding portal, is operated by an investment dealer or an exempt market dealer (as applicable) that will provide advice about the suitability of the eligible security, or, in the case of an exempt funding portal, is not registered under securities legislation in any jurisdiction of Canada and will not (and is not authorized to) provide advice about the suitability of any security for investment, the suitability of any security for investment, or the merits of any investment.


The funding portal must make an issuer’s offering document and risk acknowledgement available to each purchaser through its platform and ensure that each purchaser completes the risk acknowledgement acknowledging certain risks in connection with the crowdfunding distribution and confirming that the purchaser has read and understands the offering document.


Upon receiving notice from an issuer that the issuer has amended its offering document, a funding portal must promptly notify each purchaser of that issuer’s crowdfunding distribution of the amendment, and the purchaser’s right to withdraw from the agreement to purchase the security by delivering a notice to the funding portal exercising their withdrawal rights.

Minimum Offering Amount Not Raised / Withdrawal Rights Exercised


If an issuer has not successfully raised the minimum offering amount by the 90th day after its offering document is first made available on the funding portal’s platform or an issuer has notified the funding portal that it is withdrawing its crowdfunding distribution, no later than 5 business days after the 90th day or the notice, as applicable, the funding portal must notify the issuer and each investor in that crowdfunding distribution that funds have been returned or are in the process of being returned and take reasonable steps to return, or cause to be returned, all funds to each investor.


The funding portal must also return all funds to an investor within 5 business days of receiving notification from an investor that they are exercising their withdrawal rights.


A funding portal must not close a crowdfunding distribution on its platform unless it receives payment for each eligible security from the purchaser of such security and all withdrawal rights have elapsed.


No later than 15 days after the closing of the crowdfunding distribution, the funding portal must release all funds due to the issuer at the closing of the distribution, notify each investor that the funds have been released to the issuer, and provide the issuer with the date of each investor’s subscription and of closing, the quantity and description of the eligible security purchased for each investor, the price per security, and the total commissions, fees and other payments paid to the funding portal, so that the purchaser can comply with the issuer’s obligation to deliver to each investor a written confirmation setting out such information.

Exempt Funding Portals Additional Obligations under NI 45-110

As alluded to above, an exempt funding portal cannot advise a prospective investor about the merits of an investment or recommend or represent that an eligible security is a suitable investment for them.


Exempt funding portals must hold each investor’s funds separate and apart from its own funds in trust for the purchaser in a designated trust account at a Canadian financial institution and must disclose on its platform a statement to that effect.


Eligibility and operational requirements for operating an exempt market portal are extensive and are set out in NI 45-110. Such details and the associated vetting process by the securities regulatory authorities are beyond the scope of this website.

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