FinTech start-ups get regulatory boost

The Ontario Securities Commission (OSC) has assembled a team and an advisory committee to help fintech start-ups secure early-stage financing and accelerate time-to-market. The OSC LaunchPad initiative — a first in Canada — debuted this week with a two-year program with the Univ of Toronto's Creative Destruction Lab (CDL), NEXT Canada and San Francisco-based AngelList to link start-up fintech firms with eligible venture and angel investors.

The initiatives are aimed at modernizing securities law requirements for emerging fintech companies and streamlining regulations to reduce time for negotiations between companies and prospective investors.

The LaunchPad initiative will provide direct and tailored support to eligible businesses, even providing "exemptive relief" in certain cases so that firms can test products, services and applications. It will also utilize its advisory committee to gain a better understanding of issues faced by fintech start-ups and apply its insight to modernize regulation for similar businesses in the future.

"This is an exciting opportunity for Canadian innovators … emerging fintech businesses now have an opportunity to work with securities law experts from day one," said OSC CEO Maureen Jensen in a press release. "This initiative reflects the OSC's commitment to regulation that is in step with innovation."

The CDL and NEXT Canada are partnering with AngelList — a US webbased, Chinese-backed platform for startups, angel investors and job-seekers to fast-track Ontario-based companies seeking seed and pre-seed investment. The platform allows investors to syndicate with other angels to consider investing in companies mentored through CDL and OSC's LaunchPad.

CDL assists firms in the broad technology space as well as those focused on artificial intelligence and machine learning. AngelList has helped more than 1,000 companies in the US secure $455 million in financing since its launch six years ago, waiving listing fees but taking a 5% equity share in the value created by the firm. If the Ontario program is successful, AngelList will consider expanding nationally.

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