Bloomberg by Eric Lam | October 3, 2013

TMX Group Ltd. (X), owner of Canada’s largest stock exchange, is investigating the “potentially game-changing” use of crowdfunding as a source of capital markets investment, Chief Executive Officer Tom Kloet said.

“It’s an interesting development that’s becoming more and more real,” Kloet said, after speaking at the Investment Industry Association of Canada annual conference in Toronto today. “We’re watching it.”

Related: As crowdfunding gathers speed, financial industry changes loom

In crowdfunding, entrepreneurs go online and seek cash from the general public to help fund projects, including potential products or even art.

Kloet declined to say if Toronto-based TMX Group was considering building its own version of the technology or if it was looking at an acquisition.

“We haven’t formed a view yet. We’re looking at it and trying to understand what it means and do investors understand what they’re getting into when they go through the crowdfunding format,” he said. “Things like that will test the boundaries of investor protection versus the need to efficiently let people get capital.”

To contact the reporter on this story: Eric Lam in Toronto at elam87@bloomberg.net

Source: Bloomberg