Category Archives: Legal Issues and Regulation

BCSC sponsors British Columbia’s first Regtech Hackathon

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British Columbia Securities Commission Release | Nov 16, 2017

VANCOUVER, Nov. 16, 2017 /CNW/ - The British Columbia Securities Commission (BCSC) today announced its sponsorship of the first ever Regtech Hackathon held in British Columbia. The one-day Hackathon will challenge participants to create innovative solutions to help industry meet its regulatory requirements more efficiently and effectively, and improve regulatory quality and competitiveness.

"The BCSC is a strong supporter of industry-led innovations and solutions," said Mark Wang, Director, Capital Markets Regulation, BCSC. "We are excited to be a part of this event, because we believe it has the potential to generate some truly novel and exciting ideas to help advance regulatory technologies."

The Regtech Hackathon is part of the National Crowdfunding Association of Canada's (NCFA) VanFUNDING 2017 Conference on Tuesday, November 28. Teams of three to six people will select a problem statement to solve and work throughout the day on their pitch with help from experienced mentors, including some BCSC staff members.

The full problem statements are available on the VanFUNDING Conference's website, and address the following five areas of focus:

  • Blockchain, Crowdfunding, and Smart Contracts
  • Capital Markets Innovation
  • Know Your Client (KYC)
  • Investor Protection and Investment Literacy
  • Registration and Compliance (Tracking)

"We are thankful to the BCSC and other industry partners for their support," said Craig Asano, NCFA Founder and CEO. "This collaborative approach is the basis for developing creative and innovative regtech solutions. We encourage entrepreneurs and regulatory experts, innovators, data analysts, designers, and developers to join us in helping discover and launch some amazing B.C. regtech-focused projects."

The winning team will have an opportunity to present their pitch to the VanFUNDING Conference, as well as a chance to win prizes valued at over $20,000. Submissions will be judged on innovation, user experience, pitch, and viability.

The Regtech Hackathon will take place at the Morris J. Wosk Centre for Dialogue located at 580 West Hastings Street, Vancouver, B.C. More information on the Hackathon, including how to register, can be found on the VanFUNDING Conference website.

About the British Columbia Securities Commission (www.bcsc.bc.ca)

The British Columbia Securities Commission is the independent provincial government agency responsible for regulating capital markets in British Columbia through the administration of the Securities Act. Our mission is to protect and promote the public interest by fostering:

  • A securities market that is fair and warrants public confidence
  • A dynamic and competitive securities industry that provides investment opportunities and access to capital

Learn how to protect yourself and become a more informed investor at www.investright.org

SOURCE British Columbia Securities Commission

For further information: Media Contact: Alison Walker, 604-899-6713; Public inquiries: 604-899-6854 or 1-800-373-6393 (toll free), inquiries@bcsc.bc.ca

Related Links

http://www.bcsc.bc.ca


The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding, alternative finance, fintech, P2P, ICO, and online investing stakeholders across the country. NCFA Canada provides education, research, industry stewardship, and networking opportunities to over 1600+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada.  For more information, please visit:  www.ncfacanada.org

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VanFUNDING 2017 Brings Over 50+ Leading Blockchain, Fintech & Capital Innovation Experts to Vancouver NOV 28 @Morris Wosk Centre

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NCFA Canada | Craig Asano | Nov 15, 2017

Looking for world class education, funding, partnerships and growth within the blockchain and financial tech sector?

VanFUNDING 2017 GOING MAINSTREAM is the premier West Coast conference dedicated to connecting people looking to form long-lasting partnerships, investment and business opportunities.

In less than 2 weeks, VanFUNDING2017 Blockchain, Fintech & Funding Conference and Regtech Hackathon  descends on Vancouver November 28th, 8am-6pm at the Morris Wosk Centre for Advanced Dialogue. There is also a VIP networking event on November 27 from 530-8pm at the Diamond cocktail lounge where you can meet the biggest names in Fintech.

VanFUNDING 2017 offers world class program and education delivered via keynotes, TEDx-style presentations, panels and workshops covering Blockchain, Fintech, Regtech, and Innovation Finance topics from a diverse range of perspectives including technology, finance, legal, global innovation and humanity.

The title sponsor is Raymond James, with Gowling WLG, Victory Square Technologies, Blockchain Intelligence Group, and Etherparty as platinum partners.

“We are proud to sponsor The National Crowdfunding Association of Canada,” says Sean Martin, Managing Director, Investment Banking at Raymond James Ltd.  “There has been an explosion of blockchain technology that has proven 2017 to be the tipping point of financial innovation.”

The conference features over 50+ expert speakers and mentors from companies and organizations such as Microsoft, IBM, TSX Venture Exchange, Blockchain Intelligence Group, RightMesh, Grow VC, AIBB.io, CoinPayments, Pegasus Fintech and TokenFunder. They will be covering ground-breaking topics such as Blockchain smart contacts, Initial Coin Offerings, emerging regulations, and opportunities in PeerToPeer crowdfinancing, investment opportunities, cryptocurriences, intelligence applications and global financial marketplaces.

"Vancouver is quickly establishing itself as a prominent market for blockchain innovation on the global scene. Victory Square has always supported events that facilitate discussion and collaboration on disruptive new technologies and the VanFUNDING conference falls in line with this mandate. We look forward to an excellent event that will allow our local tech community access to some of the global thought leaders in the blockchain space," said Shafin Diamond Tejani, CEO of Victory Square Technologies.

"We look forward to a great conference & BCs first ever Regtech Hackathon and would like to thank everyone involved from organizers, volunteers, sponsors, community partners and of course our awesome speaking roster!  Special thanks to the BC Securities Commission for their support, and a growing list of Regtech Hackathon partners such as Vancity, Supirio and Launch Academy who all recognize the need for a collaborative approach to developing innovative Regtech solutions.

While Regtech is new in Canada, its gaining significant traction globally, and firms are gaining a competitive advantage.  Participation in the hackathon is inclusive and we encourage entrepreneurs and regulatory experts, innovators, data analysts, designers and developers to all join us in helping discover and launch some amazing BC Regtech-focused projects", said Craig Asano, CEO VanFUNDING.

VanFUNDING 2017 brings together start-ups and leading industry professionals in a unique venue, selected to promote interactive dialogue and discussion. Combined with workshops and a Regtech Hackathon co-hosted with the BC Securities Commission where $20,000 is up for grabs in cash and prizes, this is a not to be missed event that provides opportunities for all types of businesses in the blockchain and financial technology sector to innovate, learn and network.

 

For more information about VanFUNDING 2017, please visit:  http://vanfundingconf.ca/

 


The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding, alternative finance, fintech, P2P, ICO, and online investing stakeholders across the country. NCFA Canada provides education, research, industry stewardship, and networking opportunities to over 1600+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada.  For more information, please visit:  www.ncfacanada.org

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Ontario to ease regulations on financial startups

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The Globe and Mail | | Nov 8,  2017

Ontario is opening up some of its regulations to give financial startups more opportunities to test new products and services in a bid by the province to boost the fast-growing financial technology sector.

Finance Minister Charles Sousa laid out his strategy for the so-called fintech sector before a business crowd in Toronto on Tuesday. He said the government will create a "regulatory super sandbox" (a set of rules that exempts firms from some requirements so they can experiment with new business models and products). It will also launch an agency known as the Ontario FinTech Accelerator Office to help startups get established.

"We have the evolution, the convergence of IT and financial services. We see it happening all over the world, and Ontario has become an attraction for this because we have strong talent," Mr. Sousa said. "It's about seizing the opportunities."

With an increasing number of Ontarians moving away from bricks-and-mortar financial institutions to online services that offer everything from investing advice to cryptocurrencies such as Bitcoin, Mr. Sousa said government regulators will work with businesses to design regulations that best serve the emerging industry.

New rules, implemented quickly and tailored for fintech, could also protect consumers who are investing in unregulated products such as Bitcoin, the Finance Minister added. "We want to make sure it's at the forefront and it's transparent, that people can find security and comfort with what is being proposed," he said.

See:  NCFA Submission to Ontario Ministry of Finance: Urgent Need for Regulatory Change

British and Australian regulators already allow businesses to apply for more flexible rules, said Jim Hinton, an intellectual property lawyer at Bereskin and Parr. "We're catching up, but nobody is too far ahead. The opportunity is still there," he said.

With Canada's financial sector dominated by a few companies, innovation is slow, Mr. Hinton said. "It's been a little bit stifling to innovation because they haven't had the need to innovate. Loosening regulatory power will allow new Canadian fintech to come up. It'll allow them to grow domestically and then go international with products tested in Ontario."

While many financial decisions in Ontario now need a customer to go to a bank and sign paperwork, a new approach to regulation could allow that to be done digitally, Mr. Hinton offered as an example of what startups might want. He expected companies might also want to test new investment products.

Mr. Sousa promised regulators will adopt a more "nimble" approach to financial rules. The new fintech office will also help co-ordinate support for the industry.

The provincial Liberals, who are expected to call an election for early next June at the latest, are hoping that embracing fintech will create jobs at startups in Toronto and the Kitchener-Waterloo area.

Continue to the full article --> here


The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding, alternative finance, fintech, P2P, ICO, and online investing stakeholders across the country. NCFA Canada provides education, research, industry stewardship, and networking opportunities to over 1600+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada.  For more information, please visit:  www.ncfacanada.org

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Competition Bureau invites feedback on draft FinTech report

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Press Release | Competition Bureau | Nov 6, 2017

November 6, 2017 – OTTAWA, ON – Competition Bureau

As part of its commitment to engage with Canadians on emerging issues, the Competition Bureau has published a draft report on its market study concerning technology‑led innovation in the Canadian financial services (FinTech) sector.

The financial services sector is a pillar of the Canadian economy. From consumers buying groceries to businesses making investments that create the jobs of tomorrow, practically everything we do relies on this sector.

Recently, there has been a wave of new, innovative, and technology-based means for Canadians to access financial services. The introduction of innovative products is an opportunity to inject greater competition in the sector. When there is more competition, we generally see lower prices, more choice and convenience for consumers, as well as higher levels of innovation.

“The future is now. Let’s get it right by providing policymakers with the information they need to nurture a competitive environment that allows Canada’s FinTech companies to innovate and grow globally.”

-John Pecman, Commissioner of Competition

However, innovative products are often challenged by the rules associated with the old ways of doing business. The draft report contains a number of recommendations for regulators and policymakers to consider. Each recommendation is aimed at modernizing the regulation of financial services to support innovation and greater competition through FinTech.

See:  Competition Bureau suggests Canadian FinTech sector’s slow growth due to regulation, consumer complacency

Through the publication of a draft report, the Bureau continues to engage with stakeholders, including businesses, consumers, and domestic and foreign regulators and policymakers. Interested parties are invited to provide their feedback on the draft report no later than November 20, 2017 by completing the online form, or by sending comments to the coordinates below:

Competition Promotion Branch
Competition Bureau
50 Victoria Street
Gatineau, Quebec
K1A 0C9
Fax: 819-934-9293

The Bureau will soon release a final report which takes into consideration the views collected during the consultation period.


The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding, alternative finance, fintech, P2P, ICO, and online investing stakeholders across the country. NCFA Canada provides education, research, industry stewardship, and networking opportunities to over 1600+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada.  For more information, please visit:  www.ncfacanada.org

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How to Take Advantage of the New Trends in Blockchain, Cryptocurrency and Financial Technology

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VanFUNDING 2017 | November 6, 2017 | Morris Wosk Centre for Advanced Dialogue, Vancouver

In just 3 weeks timing, on Nov 28 the 3rd VanFUNDING 2017 (#VF2017) takes place in downtown Vancouver at the Morris Wosk Centre for Advanced Dialogue, an immersive financial innovation forum and premiere hackathon dedicated to connecting people looking for leading education, funding, investment opportunities and partnerships within the financial tech sector.

Hosted by the National Crowdfunding Association of Canada in partnership with Raymond James, Gowling WLG and Blockchain Intelligence Group, VanFUNDING is back for a third year. This year’s theme is “Financing Infrastructure Eruption – Going Mainstream” and features:

  • Nov 27:  Pre-event networking on November 27 from 5:30 – 8:00pm at the Diamond Cocktail Lounge
  • Nov 28:  First ever BC ‘Regtech Sandbox Hackathon’ co-hosted by the BC Securities Commission, with $20,000 value of cash and prizes for winners on November 28
  • Nov 28:  Full-day interactive conference including keynotes, panel discussions, workshops and a facilitated Town Hall on November 28

VanFUNDING showcases an amazing lineup of speakers from leading blockchain, fintech and crytocurrency experts from Raymond James, Gowling WLG, Blockchain Intelligence Group, Launch Academy, Robocoder, Sweetbridge, Responsive.AI, Katipult, LendingLoop, Blocksale, NewsBTC, PrivacyShell, RightMesh, Digital Futures, Frontfundr, Venture Law, Grow VC Group, Pegasus Fintech and many more, with 40+ speakers / 30 sessions discussing ground-breaking topics such as:

  • 2017 Fintech Disruption and the Future of Money
  • The Explosive Nature of Bitcoin and Investing in Crypto Assets
  • The ICO Revolution and Global Token Economy
  • The Potential of Distributed Ledger Technologies to De-risk Unsecured Loans (for the masses)
  • GOING MAINSTREAM: Scaling Opportunities & Challenges of Global Finance: Blockchain, Regtech, AI, Crypto, P2P and Fintech
  • How to spot a fraudulent ICO
  • SAFTs do they protect investors or entrepreneurs?
  • Workshop:  Public Initial Blockchain Offering (PIBCO) - The process and benefits for your business
  • Best Practices of Raising Capital Online
  • Why the Benefits of Fintech Partnerships May Outweigh Competing
  • Regulatory Perspectives: Can Canada Unlock its Blockchain and Fintech Potential?
  • Regulation of Tokens Offerings and the Value of Self-regulating Code of Conduct
  • Transacting in a Global Digital World: What P2P Technology Can do for Humanity

#VF2017 is a not-to-be missed BLOCKCHAIN and FINTECH FUNDING conference that pushes boundaries to discuss the latest developments, educate, inspire, and connect leading innovators, entrepreneurs, investors, service providers, thought leaders and policy makers in the quickly emerging sectors of fintech, P2P, crowdfinance, blockchain ICOs, digital currencies and alternative finance.  Learn more at:  vanfundingconf.ca

 

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Register BEFORE NOV 8 and Save 30%:   Get a Discounted Ticket Now

Register today and get 10% off with promo code NCFA_COIN Link to apply deal

Chance to win a free pass to #VF2017:  Tweet 2 Win Contest

Sign-up and become a VanFUNDING affiliate partner

 

The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both investment and social crowdfunding, blockchain ICO, alternative finance, fintech, P2P and online investing stakeholders across the country.  NCFA Canada provides education, research, leadership, support, and networking opportunities to over 1600+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a vibrant and innovative online financing industry in Canada.  Learn more About Us or visit www.ncfacanada.org.

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NCFA Submission to Ontario Ministry of Finance: Urgent Need for Regulatory Change

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NCFA Canada About Us | Internal Working Committee | Nov 4, 2017

Ontario's Crowdfunding Requirements are Market Stifling

Nov 4, 2017 Toronto -- Canada’s crowdfunding regime must be competitive, in line with global trends, and ‘smarter’ to enable wider access to small amounts of capital (i.e. < $5 million) by early stage companies. There is a ‘funding gap’ in the market as many smaller companies find it extremely challenging to raise funding. This means fewer innovative start-ups, fewer opportunities for investors and constraints on economic growth (and jobs).

Since the regulatory regime came into force on Jan 25, 2016, the National Crowdfunding Association of Canada (NCFA) has conducted numerous stakeholder consultations which overwhelmingly tell us that the current requirements are overly prescriptive, complex and burdensome (costly).  They restrict crowdfunding to a limited number of investors and discourage smaller issuers and licensed dealers from participating.

As a result, Ontario and Canada are falling behind international comparators such as the United Kingdom (U.K.) and the United States (U.S.). Companies and investors are reluctant to participate due to the high costs (relative to the small financing size), unwarranted transactional and ongoing regulatory burdens, and educational gaps.  This pushes many talented entrepreneurs, investors and key stakeholders to overseas jurisdictions that understand (and support) innovation and the economic potential of start-ups and small businesses.

In its 2017 Ontario Exempt Market Report, the Ontario Securities Commission (OSC) confirmed that M1 45-108 had not been used at all in Ontario. A small number of issuers have used online platforms to raise capital under the Accredited Investor or Offering Memorandum exemptions. In the NCFA’s view, this warrants further analysis and changes to the existing regime.

The U.K. has a more innovative risk-based regulatory approach that is acknowledged to be world class and is highly adaptive to emerging technologies. NCFA strongly encourages Canadian regulators to study its approach.  The U.K. also has assumed a leadership role with incentives and funding to support early market traction and education.  In the U.K., crowdfunding activity continues to flourish, representing 25% of all equity deals announced in 2016.

The U.S. has also made significant progress with 134,000 small businesses benefiting from crowdfunding in 2016 (some of which are Canadian) versus only 7,450 in Canada.  In the U.S. there is an ongoing effort to fix bugs and improve regulation with a focus on protecting investors and providing improved opportunities for smaller entrepreneurs and investors to generate wealth (e.g. “H.R. 4855 Bill “Fix Crowdfunding Act” passed by the House on July 6th, 2016).

While NCFA has participated in numerous key stakeholder fintech consultations with a wide range of regulatory and competition agencies such as the MoF, BCSC, OSC and the Competition Bureau there is:

"Urgent need for regulatory change that must be addressed from the top down to ensure these issues have a political champion with the mandate to reduce critical barriers that limit economic growth and Canada's ability for fintech innovations and peer to peer distributed technologies to be globally competitive.", said Craig Asano, CEO, NCFA Canada.

Thanks to the NCFA internal working committee on regulations and governance, lead by NCFA Advisor, Robin Ford and the numerous individuals and companies that participated to prepare the submission, and/or participate in various meetings with government agencies, such as the MoF, BCSC, OSC and Competition Bureau across the country to foster Canadian fintech competitiveness and help reduce barriers for both new entrants and operators looking to scale and remain competitive with international trends.

"The current regulatory approach to crowdfunding is not working. We are sending our innovators and entrepreneurs to the US for capital! Regulators, governments, and other stakeholders must collaborate on a more risk-based and flexible approach to this rapidly evolving sector while also recognizing that start-ups and scale-ups need a helping hand to unleash their economic potential" -- Robin Ford, NCFA Advisor and Regulations and Governance Committee Lead

 

Meeting with the Ontario Ministry of Finance

On October 20, NCFA met with with Ontario's MoF to discuss ways to enhance access to capital (esp. for small businesses), stimulate investment and improve competitiveness in line with international fintech trends & distributed technologies impacting Crowdfinance, P2P, Blockchain ICOs, Altfi and global digital marketplaces.

Call to Action:

  1. Work harder to harmonize and reduce unjustified regulatory burden:   We strongly encourage the Ontario government, and the OSC, to work smarter (and harder) to streamline regulation across the country, reduce undue burdens that undermine cost effective capital formation for young companies (and that bear no relation to the risks presented by crowdfunding), and provide the required resources and support to encourage the crowdfunding sector and to improve Ontario’s competitiveness.
  2. Canada (Ontario) Needs a political champion to promote regulatory change:   Industry needs to garnish support from the Ontario MoF to champion the proposed regulatory changes deemed the highest priorities for change based on data/evidence, consensus from wide stakeholder consultations and comparative analysis of Canadian markets with international jurisdictions such as the UK and the US.
  3. Address urgent pressing challenges and implement NCFA's proposed specific regulatory changes:  such as lack of harmonization and mutual recognition, overly prescriptive rules (vs. risk/principles based regulatory approach), full service Sandbox with cohorts etc (vs current concierge service) and educational/resource gaps. 


Download the Ontario MoF Submission --> PDF here

 

The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both investment and social crowdfunding, blockchain ICO, alternative finance, fintech, P2P and online investing stakeholders across the country.  NCFA Canada provides education, research, leadership, support, and networking opportunities to over 1600+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a vibrant and innovative online financing industry in Canada.  Join Us!  Learn more About Us or visit www.ncfacanada.org.

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OSC approves first ICO in Ontario to TokenFunder

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OSC LaunchPad | Nov 23, 2017

Release:  OSC Launchpad approves Token Funder to be the first token offering out of Ontario

OSC approves initial coin offering

Investment Executive | James Langton | Nov 23, 2017

The Ontario Securities Commission (OSC) has approved Ontario's first-ever regulated initial coin offering (ICO).

Under the auspices of the Canadian Securities Administrators' "regulatory sandbox", the OSC granted regulatory relief to Toronto-based Token Funder Inc., which will exempt the firm from the dealer registration requirements, and allow it to carry out an ICO under existing prospectus exemptions.

"We are pleased to announce that we just approved the first token offering out of Ontario. It is important that we continue to foster innovative new ways to raise capital and invest, and this announcement is a testament to the dedicated support we are providing in this space," the commission says in a statement.

According to the OSC's decision, the firm was established to create a "smart token asset management platform", which is intended to, among other things, "facilitate third-party issuers raising capital through the offering of blockchain-based securities, including tokens and coins."

Token Funder also intends to provide token and coin management and governance services for issuers, and to facilitate token transfers, subject to regulatory approval.

The proposed ICO will be used to fund the creation of the platform, and to facilitate transfers of digital FNDR tokens under prospectus exemptions. The firm is planning to create 1 billion FNDR tokens on the ethereum blockchain, and to distribute up to 200 million on them as part of the offering (raising around $10 million).

The relief was granted with conditions, including: the firm will conduct know-your-client (KYC) and a suitability review for each investor; and investors undergo a comprehensive onboarding process to ensure, among other things that they have a "detailed understanding" of cryptocurrency and digital token offerings.

This "should not necessarily be viewed as a precedent" for other firms, the OSC decision says.


The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both investment and social crowdfunding, blockchain ICO, alternative finance, fintech, P2P and online investing stakeholders across the country.  NCFA Canada provides education, research, leadership, support, and networking opportunities to over 1600+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a vibrant and innovative online financing industry in Canada.  Learn more About Us or visit www.ncfacanada.org.

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