How we’ve helped fintech businesses
OSC LaunchPad provides flexible approaches for fintech business to fulfil Ontario Securities Commission (OSC) regulatory requirements. Below are some examples of how we have helped companies in the past.
Coin and token offerings
Initial coin and token offerings can provide businesses with new opportunities to raise capital, however they may also raise investor protection concerns. OSC LaunchPad and the CSA Regulatory Sandbox have provided firms with exemptive relief to allow them to conduct coin and token offerings while ensuring that investor protection concerns are adequately addressed.
Limited-time registration and prospectus relief was granted to allow the distribution of tokens for the following companies:
Crypto-asset investment funds
Investment funds that invest in crypto assets are novel businesses in Canada. Limited-time terms and conditions have been imposed on the registration of the following firms to allow them to operate while providing the CSA an opportunity to monitor developments in this new area.
Internet-based peer-to-peer lending platforms are novel businesses in Canada. Terms and conditions have been imposed on the registration of the following firms to allow them to operate, with certain restrictions, while providing the CSA an opportunity to monitor developments in this area.
- Lending Loop
- Vault Circle Inc.
- Wealthsimple Inc. – Terms and conditions were imposed on the adviser registration of Wealthsimple to allow them to offer managed account portfolios consisting of securities other than exchange-traded funds to clients with investment restrictions.
Online venture capital raising platforms
AngelList received limited-time relief from the prospectus requirement and certain registrant obligations were granted to permit AngelList to operate an online platform that offers services to start-up businesses in the technology sector. These services include facilitating venture capital and angel investing in start-ups that meet certain criteria and have completed one of the approved incubator programs noted below.
- NEXT Canada
- Creative Destruction Lab
- York Entrepreneurship Development Institute’s Incubator Track
- Ontario Centres of Excellence’s Market Readiness Program
- FinMatch/Disintermediate Technologies Inc. – FinMatch is an online platform that matches permitted institutional clients with reporting issuers whose securities are listed on recognized exchanges on an anonymous basis. The FinMatch platform has novel elements. Terms and conditions were imposed on FinMatch’s registration to allow them to operate with additional reporting requirements to allow the CSA to monitor developments.
- TokenGX Inc. – TokenGX Inc. operates an online platform that facilitates the execution and delivery of an initial token offerings of security tokens. The firm also uses technology to facilitate the suitability determination for a client before accepting instruction from that client to buy a security token on the platform. Elements of the TokenGX platform are novel. Limited-time terms and conditions have been imposed on TokenGX’s registration to allow them to operate while providing the CSA the opportunity to monitor developments.
- BlockFilm Inc. – BlockFilm Inc. operates a platform that showcases Canadian film and film-like projects and facilitates capital raising in those projects through investments in security tokens by accredited investors. Elements of the BlockFilm Inc. platform are novel. BlockFilm will curate the issuers that are available on its platform by conducting creative due diligence on the project, however accredited investors interested in purchasing security tokens will be redirected to a website co-branded with TokenGX Inc., a registered exempt market dealer that operates a digital funding portal. BlockFilm Inc. has been granted time-limited relief from the requirement to be registered with terms and conditions to allow the CSA to monitor developments.
- WealthSimple Digital Assets Inc. – WDA operates a platform that facilitates the buying, selling and holding of crypto assets. Limited-time terms and conditions have been imposed on WDA’s registration to allow them to operate as they work towards transitioning the platform to an affiliated entity which is registered as an investment dealer and a member of the Investment Industry Regulatory Organization of Canada (IIROC).
RegTech compliance solutions
RegTech is the management of regulatory processes within the financial services industry through technology, specifically companies that help firms comply with regulations efficiently and more cost-effectively. The main functions of RegTech include regulatory monitoring, reporting, and compliance. While the OSC does not directly regulate RegTech companies, we do regulate the registrants and firms that they provide services to. We encourage innovation that assists market participants and have provided guidance to RegTech firms as they develop their services.
Are you developing a RegTech solution and would like to have a discussion with us? Contact the OSC LaunchPad team.