New Canadian securities regulations are helping you take control of your portfolio
If you’ve got the good fortune to be friends with any securities lawyers, chances are they’ve been trying to pin you down at cocktail parties for a while now. You may even have heard the terms “crowdfunding regulations” or “JOBS act” or arcane abbreviations like “31-103” or “45-106F2”. Well, yesterday, the excitement in legal circles hit a fever pitch, with the publication of the blockbuster title “Multilateral CSA Notice of Amendments to National Instrument 45-106 Prospectus Exemptions Relating to the Offering Memorandum Exemption.” Let me tell you, this was a gripping page-turner for us at CoPower. Seriously!
So what’s the big deal about this fairly dry regulatory update, and why should you care?
Studies show that most Canadians have a solid amount of household investments, but few of us are in that “1%” that have access to a broad set of interesting investment opportunities. And unfortunately, that means that we don’t have that much control over our investments. For smaller amounts, options have been pretty limited: most of us are in “omnibus” mutual funds that earn mediocre returns, with opaque investment holdings. Worse, these mutual funds often have holdings that are hard to be proud of: weapons manufacturers, oil and gas companies, tobacco companies and other investments that many of us would prefer not to support with our wallets.
Fortunately, new technology is empowering people retake control of their money. One example of this is the success of crowdfunding platforms like Kickstarter, which help people support causes and projects they care about. But for most of us, our budget for donations is much smaller than our investment portfolios. And until now, only the very wealthiest have had the ability to really dictate where their investment dollars were going.
This brings us to the new securities regulations.
The new Offering Memorandum Exemption, coupled with the rise of online platforms, opens up new opportunities to Canadians by making private investments broadly accessible. Individuals can invest in opportunities they care about, like a local brewery, an early-stage healthcare company, or a green infrastructure bond, at a much lower entry level than previously possible.
At CoPower, we’ve been actively advocating for Canadians’ rights to take control of their investments since 2013. We’ve sent letters to the Canadian Securities Administrators both on our own byline, and in concert with other leading online investment portals, such as SeedUps Canada and the MaRS SVX impact investing platform. We’re thrilled that the regulators listened to our concerns, and we believe that the regulations as published are exactly what is needed for Canadians to start using the Internet to put their money where their values are.
Opportunities like rooftop solar, LED lighting and geothermal heating can give fiscally-conscious Canadians an investment opportunity that’s market-rate or market-beating and environmentally-conscious to boot. We think Canadians who care about the environment should be able to invest in their environment, and build value without sacrificing values. So starting next year, with the general availability of the Offering Memorandum Exemption across Canada, anyone will be able to invest in clean energy through CoPower’s online platform.
So now you can see why your securities lawyer friends have been so worked up about the new regulations: It’s the first step for Canada in empowering you to take back your portfolio.