What you need to know
Innovation takes effort, time, and money. As a new fintech business, the last thing that you want to hear is that you're not complying with securities regulation and may need to cease your activities. While the OSC LaunchPad team may be able to provide some helpful information by speaking with you at events and can potentially offer you direct support, you can take an important first step by getting an initial understanding of whether and how securities regulations may apply to your business.
If your business involves any of the following activities, you may need to comply with securities regulatory requirements:
- Connecting investors with companies looking to raise capital. This can be as simple as making introductions through an online platform, website, or app.
- Setting up lending platforms that allow investors to fund loans or portions of loans.
- Recommending investments. A recommendation can range from featuring an investment on an online platform to speaking about the positive features of an investment.
- Online advising, including operating platforms that recommend model portfolios or other investments. (Sometimes referred to as “robo-advising”.)
- Setting up online platforms (including equity crowdfunding portals), auction boards, bulletin boards, apps, or similar facilities for securities trading.
- Operating angel investor organizations or networks, or acting as a lead investor.
- Using AI to recommend investments or facilitate trading.
- Arranging or participating in organized groups (e.g. meet up groups) or pitch sessions, where companies present their businesses, products, services, or applications to potential investors.
- Setting up means for investors and companies looking to raise capital to interact, including chat rooms, message boards, and other forms of social media.
- Helping to prepare offering documents, marketing materials, or other similar documents for companies looking to raise capital.
* The above activities also apply to any cryptocurrency or distributed ledger technology (e.g. blockchain)-based ventures.
If your business involves any of these activities, Ontario securities regulation may apply to you. You may need to:
- Register (sometimes referred to as "licensing"). Firms or individuals that are in the business of trading or advising in securities are subject to specific requirements under securities law.
- Prepare a prospectus or have a prospectus exemption. Companies that offer securities for sale to the public are subject to specific requirements under securities law.
- Meet other requirements, such as marketplace requirements.