The US Securities and Exchange Commission made its big announcement on Wednesday setting out a comprehensive proposal for how equity Crowdfunding rules would actually work.
As a Canadian lawyer who has been writing about the importance of finding a way to harmonize securities laws, not only between Canadian provinces, but also with US and UK regulators, the news couldn’t be better. At least for the moment.
Page 216 of the SEC proposal opens the door to permit “nonresident funding portals” (read Canadian portals) to have their issuers (read Canadian companies) solicit equity investments from US investors. However, in order to do so, the SEC is calling on foreign regulators (read the Canadian Securities regulators; OSC, FCAA etc.) to enter information sharing arrangements (I suppose a form of joint regulation). A call that should be acted upon by Canadians
The proposal states:
Under the proposed rules, registration pursuant to Rule 400 of Regulation Crowdfunding by a nonresident funding portal (a funding portal incorporated in or organized under the laws of any jurisdiction outside of the United States or its territories, or having its principal place of business outside the United States or its territories) would be first conditioned upon there being an information sharing arrangement in place between the Commission and the competent regulator in the jurisdiction under the laws of which the nonresident funding portal is organized or where it has its principal place of business that is applicable to the nonresident funding portal.
The invitation is on the table.