Improved Securities Regulation for Business

It isn't often I find myself in agreement with the former Harper government. They (unsuccessfully) championed the creation of a single securities regulator in Canada. Currently 8 provinces have independent regulatory authorities - BC, Alberta, Saskatchewan, Manitoba, Ontario, Québec, New Brunswick, Nova Scotia. Why does this matter? Businesses must comply with regulations that differ (slightly) between these 8 jurisdictions. All of this additional compliance burden being placed on companies for a market that is relatively unimportant. For large corporations this is an annoyance that can easily be avoided. They can simply ignore our markets. For small businesses which account for 55% of all private sector jobs, this represents an almost insurmountable barrier. So what value does the BC Securities Commission provide (that couldn't be provided by a national regulator)? Consider the issue of regulating crowdfunding as a source of equity capital for small businesses in BC. In February of 2016 – the BC Securities Commission introduced regulations that allowed startups to raise small amounts of money from BC-based Crowdfunding portals… However a quick review of the National Crowdfunding Association of Canada’s directory reveals just how much this resembles the wild west. Of the 6 BC portals at least 2 have abandoned their websites, some portals have no listings – and the busiest I found showed a single active listing, along with many “future listings”. One of the equity portals listed – – has already pivoted away from its origins as an equity crowdfunding portal: “We have evolved to be better aligned with the needs of these companies and the investors wanting to back them by focusing our efforts on a lead investor, member network model. As a result of these changes, we are no longer operating as a crowdfunding portal.” Given the current state of flux in this sector, it may be wisest for early stage companies to look at crowdfunding as a way to launch creative content (eg. video games or internet-based tv series) or new products using Kickstarter or Indiegogo… The upfront compliance and regulatory costs associated with equity crowdfunding are very high. Admittedly it costs less than going public, however existing equity crowdfunding portals don’t appear to have much, if any traction. As a result those upfront costs will almost certainly be stranded. I think it is clear that maintaining an independent BC securities regulator is a waste of taxpayer resources. Arguments to the contrary by the BCSC are simply self-serving and should be ignored.


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  • David Pearce
    commented 2016-11-17 17:08:55 -0800
    Great idea. It is just so obvious!
  • David Pearce
    tagged this with Important 2016-11-17 17:08:54 -0800
  • Robert Farrow
    published this page in Make a suggestion 2016-11-16 08:04:39 -0800
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