On June, 17, 2013, the Ontario Securities Commission issued its decision approving the terms and conditions under which MaRS VX, known as MaRS Social Venture Connexion (SVX), will be permitted to operate an online platform for connecting impact issuers and accredited investors. MaRS VX, a wholly owned subsidiary of MaRS Discovery District, is the first online capital-raising platform to receive securities regulatory approval to operate in a Canadian jurisdiction. MaRS VX is expected to be officially launched in September 2013.1
The MaRS VX Platform
MaRS VX’s objective is to facilitate impact investing by bringing together, via an online platform, accredited investors (as defined under applicable securities laws) and impact issuers aiming to solve social or environmental challenges in Ontario.
The platform will be accessible to issuers that are seeking to raise capital on a private placement basis and that satisfy MaRS VX’s access criteria. Issuers granted access to the platform will be permitted to provide information about their proposed offerings and their operations to prospective investors. Issuers will also be required to provide ongoing disclosure to investors that invest through the MaRS VX platform.
Accredited investors that are permitted clients (as defined under applicable securities laws) and that have waived "know-your-client" and "suitability" requirements are not subject to any limits on the amounts that they can invest in offerings on MaRS VX.
For other accredited investors:
- Each investor is limited to investing a maximum of $25,000 in a single offering on MaRS VX in a calendar year and a total maximum of $50,000 in all offerings on MaRS VX in a calendar year.
- There will, however, be no limit on the amount the investor may invest in a particular offering on MaRS VX if the investor provides MaRS VX with a letter from a registered dealer confirming that the dealer fulfilled "know-your-client" and "suitability" requirements for that offering and that the offering is a suitable investment for the investor.
Importance of Decision
The decision is groundbreaking because it provides the first detailed framework for an online capital- raising platform that will satisfy the requirements of a Canadian securities regulator. It is expected, therefore, to be a benchmark decision for those seeking to establish similar platforms. Elements of the decision also draw from the crowdfunding initiatives being considered by securities regulators in Canada and elsewhere around the world, particularly the investment conditions described above.
1 Torys advises MaRS VX on all securities regulatory aspects of its operations.
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