MaRS VX

Headnote

Application by not-for-profit entity (the Filer) for relief from certain know-your-client (KYC) and suitability requirements contained in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103) -- Filer proposing to operate online portal bringing together accredited investors and issuers that aim to solve social or environmental challenges in Ontario -- Filer to be registered as restricted dealer -- Filer will comply with customary gatekeeper KYC requirements, such as establishing identity of client, confirming client is an accredited investor, and complying with anti-money laundering requirements -- no transactions will be executed, settled or cleared through the portal -- Filer will not issue securities or have related or connected issuers -- relief granted subject to certain investment limits and terms and conditions set out in the decision -- decision is time-limited and will expire on the earlier of (i) two years and (ii) 90 days after any material change in the Filer's business, operations or capital -- decision may be amended by the Commission on written notice to the Filer -- relief granted based on the particular facts and circumstances of the application -- decision should not necessarily be viewed as a precedent for other filers in Ontario or in other jurisdictions.

Applicable Legislative Provisions

National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations, ss. 13.2(2)(c), 13.3 and Part 15

Applicable Staff Guidance

OSC Staff Consultation Paper 45-710, Considerations for New Capital Raising Prospectus Exemptions

June 17, 2013
 

IN THE MATTER OF
THE SECURITIES LEGISLATION OF
ONTARIO
(the “Jurisdiction”)

AND

IN THE MATTER OF
MARS VX
(the “Filer”)

DECISION

Background

The regulator in the Jurisdiction has received an application from the Filer (the "Application") for a decision under the securities legislation of the Jurisdiction of the regulator (the "Legislation") for relief pursuant to section 15.1 of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations ("NI 31-103"), from the know-your-client and suitability requirements in sections 13.2(2)(c) and 13.3 of NI 31-103 in respect of accredited investors that have access to the Filer's Private Portal (as defined below), subject to the terms and conditions set out in the Decision (the "Exemption Sought").

Interpretation

Defined terms contained in National Instrument 14-101 Definitions have the same meaning in this decision unless they are defined in this decision (the "Decision").

Representations

This Decision is based on the following facts represented by the Filer:

The Filer

1. The Filer is applying for registration as a restricted dealer pursuant to section 25(1) of the Securities Act (Ontario) and NI 31-103.

2. The Filer is a not-for-profit entity and is a wholly-owned subsidiary of MaRS Discovery District ("MaRS").

3. MaRS is a registered charity and a not-for-profit entity without share capital created by letters patent under the Canada Corporations Act having its head office located in Toronto, Ontario that carries on its operations without pecuniary gain.

4. The Filer and MaRS will both continue to be not-for-profit entities.

The Platform

5. The Filer's objective is to facilitate impact investing by bringing together via an online platform (the "Platform") accredited investors (as such term is defined in section 1.1 of National Instrument 45-106 -- Prospectus and Registration Exemptions ("NI 45-106") in Ontario and potentially in other jurisdictions and issuers that are social impact issuers and/or environmental impact issuers in Ontario aiming to solve social or environmental challenges in Ontario.

The term "impact issuer" means a small or medium-sized venture or fund with less than $25 million in revenues at the time of initial access to the Private Portal, a prioritized mission, earned revenues and proven impact, including for-profit corporations, non-profit corporations, for-profit cooperatives and non-profit cooperatives.

The term "social impact issuer" means an issuer that focuses on creating opportunities and/or breaking the cycle of poverty in subsectors including, but not limited to, affordable housing, employment services, food security, education, First Nations and new Canadians.

The term "environmental impact issuer" means an issuer that focuses on building environmental sustainability in subsectors including, but not limited to, renewable energy, sustainable agriculture, consumer products, water and transportation.

6. The Filer will allow only social impact issuers and/or environmental impact issuers in Ontario to use the Private Portal.

7. The Filer may, at a later date, propose to allow accredited investors resident in other Canadian jurisdictions to use the Private Portal to make investments in social impact issuers and environmental impact issuers in Ontario. Prior to allowing accredited investors in another Canadian jurisdiction to use the Private Portal, the Filer will apply for and obtain registration as a restricted dealer in that jurisdiction or make such other arrangements as are acceptable to the regulator or securities regulatory authority in that jurisdiction. The Filer undertakes not to rely on section 4.7(1) of Multilateral Instrument 11-102 Passport System ("MI 11-102") to passport this Decision into another Canadian jurisdiction without the prior written consent of the regulator or securities regulatory authority in that jurisdiction.

8. The Platform will have two portals: one public (the "Public Portal") and the other private (the "Private Portal").

9. The Public Portal will contain information on the Filer, its social/environmental objectives, the Platform, and the requirements/process for prospective investors and issuers to access the Private Portal.

10. The Private Portal will be password-protected and accessible only to:

(a) accredited investors (as such term is defined in section 1.1 of NI 45-106), which have provided to the Filer a signed written agreement (an "Investor Agreement") and supporting documentation to establish such status and their residence;

(b) issuers seeking to raise capital on a private placement basis via the issuance of debt or equity securities that have satisfied the Filer's access criteria and provided supporting documentation to establish such status and that have provided to the Filer a signed written agreement (an "Issuer Agreement") agreeing to comply with the requirements described in paragraph 23 of the representations to this order, among other requirements. No other persons outside the Filer will have access to the Private Portal; and

(c) upon request, Commission staff.

11. Prospective investors will be provided with a description of the various categories of the definition of accredited investors as part of the Investor Agreement and each prospective investor will be required to indicate in a certificate accompanying the Investor Agreement within which category of the definition of accredited investor the investor qualifies. The Filer will have procedures to verify the identity, accredited investor status and residence of prospective investors. The Private Portal will be supplemented by outreach initiatives approved by the Filer and provided by issuers that have access to the Private Portal including webinars, meetings, presentations, investor breakfasts and other forms of marketing targeted exclusively to accredited investors that have satisfied the requirements for accessing the Private Portal and their financial advisors. Only accredited investors who have signed the Investor Agreement will be invited to the marketing events described in this paragraph. Any additional information about issuers or offerings, beyond information already available on the Private Portal provided at these supplementary outreach initiatives will be filed on the Private Portal shortly after each such supplementary outreach initiative.

12. All visitors to the Filer's website will see a statement in plain language that:

(a) only accredited investors resident in jurisdictions where appropriate regulatory approvals are granted may use the Private Portal; and

(b) only social impact issuers and/or environmental impact issuers located in Ontario may use the Private Portal.

The Filer's website will contain disclosure that states that although the Filer is registered as a restricted dealer under securities legislation, no securities regulatory authority has approved or expressed an opinion about the securities offered on the Portal. The Filer will not make any statement that contradicts the foregoing sentence.

13. The Private Portal will make available certain general disclosure about issuers, including, but not limited to, the business description, the mission of the entity, management biographies, the impact of the issuer, third party certification (i.e. whether the issuer has a Global Impact Investing Rating System (GIIRS)/B Corporation (BCorp) social and environmental performance accreditation), basic financial information (including current revenues of the issuer), the security being offered, the minimum investment in such offering and the amount the issuer would like to raise, so that accredited investors may independently evaluate and assess whether investments in such issuers should be made and/or maintained. The Private Portal will clearly distinguish between issuers that are: (a) for-profit corporations; (b) non-profit corporations; (c) for-profit cooperatives; and (d) non-profit cooperatives.

14. To access more detailed information such as, but not limited to, the business plan, detailed financial statements, pro-forma financial projections, articles of incorporation, third party impact assessments, the list of the board of directors and officers and an offering document (if applicable), an accredited investor must request access from the issuer to an additional screen on the Private Portal, referenced as the issuer's "Deal Room", which may contain this information as provided by the issuer. When granted access to the issuer's "Deal Room" on the Private Portal, the accredited investor would also be able to contact the issuer through a discussion board, a feature available only in the issuer's "Deal Room" on the Private Portal. This discussion board will be monitored by the Filer and any violations of the Filer's policies by either the investor or the issuer on the discussion board may result in removal of either the investor or issuer from the Private Portal. The issuer's contact information will also be provided on the Private Portal, so the accredited investor would have the ability to contact the issuer directly. None of the issuer's information listed in this paragraph or in paragraph 13 of the representations to this order would be available on the Public Portal.

15. The Filer will monitor any new postings on the Private Portal and any interactive communication channels on its website and within one business day will remove any material from the Private Portal or its website that it deems inappropriate, including material that raises investor protection concerns.

16. Only one authorized person from each issuer will be provided with modification access to the Private Portal. If such user ceases to be employed by the issuer, the Filer will change the profile username and password within two business days of notification by such issuer. Issuers will be required to promptly notify the Filer of the cessation of employment of such authorized user. Access to the Private Portal will be controlled and revised solely by the Filer's staff members.

17. Accredited investors that are users of the Private Portal will have access only to the contact information of other accredited investors who declare that their information may be made accessible to users of the Private Portal. Any communication between users of the Private Portal via the Private Portal would be limited to discussing a specific offering. This communication would be facilitated on the applicable issuer's "Deal Room" on the Private Portal, on which accredited investors would be able to ask questions of other accredited investors regarding the specific offering in order to facilitate obtaining information and/or due diligence regarding the issuer. A disclaimer will appear on each issuer's "Deal Room" on the Private Portal outlining these restrictions. The Filer's staff will have access to each issuer's "Deal Room" on the Private Portal and within one business day will remove any content that is not permitted under this paragraph. There will be no secondary trading of securities conducted through the Private Portal.

18. The Filer will have policies governing the information that a social impact issuer and environmental impact issuer can post on the Private Portal (the "Posting Policies"). The Posting Policies will provide that any information that an issuer posts on the Private Portal must:

(a) comply with applicable securities legislation;

(b) not contain promotional statements or material that cannot be reasonably supported or misrepresentations;

(c) be presented in a fair and balanced manner; and

(d) not be misleading.

The Issuer Agreement will require issuers to comply with the Posting Policies.

Investor Agreement and Investor Screening

19. Each Investor Agreement will include the following acknowledgement from an investor:

(a) investing in issuers whose offerings are posted on the Private Portal has significant risk. The main objective of these issuers is not to maximize returns to investors and you should invest in issuers whose offerings are posted on the Private Portal only if you are prepared not to receive any return on your investment and to lose your investment in its entirety; and

(b) the investor understands the significant risks associated with offerings posted on the Private Portal including the severe illiquidity (including that there is likely no market for resale of securities issued through offerings posted on the Private Portal) and potential volatility of the investment.

20. The Investor Agreement will also require the investor to acknowledge that the Filer is not responsible for any misrepresentations by an issuer, including for any errors, omissions or misstatements in issuer materials provided to any investor through the Private Portal.

21. The Investor Agreement will also require that:

(a) each investor notify the Filer promptly of any changes to his, her or its status as an accredited investor; and

(b) each investor will be required to recertify his, her or its eligibility as an accredited investor annually. If, after an Investor Agreement is entered into, the Filer becomes aware that an investor is not, or there is a reasonable basis for believing that the investor is not, an accredited investor, the Filer will immediately take appropriate action, including removing that investor's access to the Private Portal.

22. In order to verify the identity and accredited investor status of an accredited investor and permit him, her or it to have access to the Private Portal, individual accredited investors will be required to provide to the Filer a piece of government issued identification to prove his or her identity and residence; in addition, accredited investors will need to provide documentation confirming his, her or its accredited investor status, such as: (i) a copy of the investor's notice of assessment from Canada Revenue Agency for the two most recent calendar years; (ii) a copy of the investor's most recently prepared financial statements or client account statements from a financial institution or registrant reflecting their financial assets; or (iii) a reference letter from a Canadian financial institution, registrant or chartered accountant confirming the investor's income, financial assets and/or net assets. In the event that false information is provided, the Filer will notify the Commission and prohibit that investor from accessing the Private Portal indefinitely.

Issuer Agreement and Issuer Screening

23. The Issuer Agreement will require the issuer to confirm that it is responsible for compliance with applicable securities laws, including those pertaining to prospectus exemptions, the drafting/delivery/filing of offering memoranda, the filing of reports of exempt distributions and the payment of private placement fees. In addition, the Issuer Agreement will require each issuer to prepare and send to its security holders that invest through the Private Portal:

(a) annual audited financial statements within 120 days of year-end;

(b) six-month interim financial statements within 60 days after the end of its six-month interim period; and

(c) in each case, together with those financial statements, an update on the issuer's business activities, including with respect to the use of proceeds received by the issuer from its investors; in each case, for so long as the issuer has outstanding securities in respect of which offerings were posted on the Private Portal.

The Issuer Agreement will require that annual audited financial statements of an issuer be prepared in accordance with generally accepted accounting procedures determined with reference to the Handbook of the Canadian Institute of Chartered Accountants (the "Handbook") and audited in accordance with generally accepted auditing standards determined with reference to the Handbook, and that interim financial statements of an issuer be prepared in accordance with generally accepted accounting procedures determined with reference to the Handbook.

24. In order for an issuer to access the Private Portal, it must have satisfied the Filer's access criteria and provided supporting documentation to establish such status. The issuer's application will be reviewed by the Filer for compliance with the access criteria before such issuer is given access to the Private Portal.

25. At the time of initial application by an issuer to access the Private Portal, the Filer will require directors and officers of the issuer:

(a) to complete a personal information form that will cover substantially the same questions as the personal information form set out in Appendix A to National Instrument 41-101 General Prospectus Requirements; and

(b) to consent to criminal record and other background checks and the collection of personal information in accordance with applicable privacy legislation. The consent form will note that the Filer may provide a copy of the completed personal information form and the results of any criminal record or other background check to the Commission.

If requested by the Commission, the Filer will provide Commission staff with copies of any completed personal information form and the results of any criminal record or other background check. The Filer will arrange for criminal record checks to be conducted on directors and officers of each issuer at the time of initial application. Whenever an issuer appoints a new director or officer, the procedures set out in this paragraph will be conducted with respect to such individual.

26. Each issuer will be required to provide at least two business references in order to help establish the reputation of the issuer's leadership. The Filer will arrange for criminal record and other background checks (including securities violations checks) to be conducted on each issuer at the time of initial application.

27. In order to verify the Ontario residence of social impact issuers and/or environmental impact issuers, the Filer will require such issuers to provide copies of constating documents indicating the location of such issuer's registered office and an officer's certificate with respect to the issuer's primary place of business.

28. Upon reviewing the completed personal information forms and the results of the criminal records checks described in paragraphs 25 and 26 of the representations to this order, the Filer will observe the following procedures:

(a) in the event that a criminal record check or other background check of an issuer reveals a previous conviction for fraud, securities violations or other similar improprieties, such issuer will not be permitted access to the Private Portal;

(b) any issuer with outstanding or previous material litigation shall be required to disclose such material litigation on its online profile on the Private Portal;

(c) in the event that a completed personal information form or criminal record check or other background check on a director or officer of an issuer reveals a director or officer with a previous conviction for fraud, securities violations or other similar improprieties, such issuer will not be permitted to access the Private Portal unless such director or officer resigns;

(d) any director or officer who was, within 10 years before the date of the personal information form, a director, chief executive officer, chief financial officer or other executive officer of any issuer (including the issuer seeking to access the Private Portal) that:

(i) was subject to a cease trade order or similar order, or

(ii) became bankrupt or became subject to a similar insolvency proceeding,

as more particularly set out in subsection 10.2(1) and paragraph 10.2(1.2)(a) of Form 51-102F2 ("Form 51-102F2") under National Instrument 51-102 -- Continuous Disclosure Obligations, shall disclose such cease trade order (or similar order) or bankruptcy (or similar insolvency proceeding) on the issuer's online profile on the Private Portal;

(e) any director or officer who, within 10 years before the date of such personal information form, became bankrupt or became subject to a similar insolvency proceeding, as more particularly set out in paragraph 10.2(1.2)(b) of Form 51-102F2, shall disclose such bankruptcy (or similar insolvency proceeding) on the issuer's online profile on the Private Portal; and

(f) any director or officer who was subject to:

(i) any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or who entered into a settlement agreement with a securities regulatory authority, or

(ii) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor in making an investment decision,

as more particularly set out in subsection 10.2(2) of Form 51-102F2, shall disclose such penalty, sanction or settlement agreement on the issuer's online profile on the Private Portal.

Operations of the Filer

29. In carrying out its activities described in this order, the Filer will not:

(a) provide specific recommendations to particular investors about the suitability of a purchase of an issuer's securities;

(b) recommend or solicit any particular purchase or sale by an investor of an issuer's securities;

(c) sell, trade, execute, instruct, accept or deliver trading instructions for an issuer's securities;

(d) buy or sell securities as principal or agent (including, without limitation, mutual funds or scholarship plans);

(e) act as a portfolio manager or investment fund manager;

(f) participate in the creation of offering documents or selling/marketing materials in respect of an offering other than providing assistance to issuers with respect to their pitch information prior to it being made available to investors and without limiting the obligations of issuers in respect of such materials, or otherwise give specific details about an issuer's securities other than by making them available on the Private Portal or pursuant to the outreach initiatives described in paragraph 11 of the representations to this order;

(g) comment on the merits or expected returns of an investment in an issuer's securities;

(h) assist with the completion of an issuer's subscription documentation, if any;

(i) accept or handle funds for the purchase of an issuer's securities or hold assets of investors;

(j) clear or settle any trades of an issuer's securities;

(k) invest itself in any issuer or underwrite any issuer; or

(l) collect know-your-client information (except the Filer will collect information to the extent necessary to identify and qualify accredited investors and issuers as described above in paragraphs 22 and 24 of the representations to this order).

30. The Filer intends to comply with all of the registration requirements otherwise applicable to an exempt market dealer under the Act and NI 31-103, with the exception of the know-your-client and suitability requirements in sections 13.2(2)(c) and 13.3 of NI 31-103, subject to the terms and conditions set out in the Decision.

31. The Chief Compliance Officer of the Filer will conduct reviews of all prospective issuers and investors, including reviewing the Investor Agreement, Issuer Agreement and other related documentation, before granting the issuers and investors access to the Private Portal and will establish and maintain relevant policies and procedures in order to monitor and assess compliance by the Filer and individuals acting on its behalf with relevant Ontario securities legislation.

32. The Filer will report to the Commission any material changes in its business, operations or capital.

33. The Filer will not participate in a "referral arrangement" as such term in defined in section 13.7 of NI 31-103.

34. The Filer will not lend money, extend credit or provide margin to an investor or recommend that an investor use borrowed money to finance any part of a purchase of a security.

35. The Filer will not issue any securities and will not have any related or connected issuers.

36. The Filer will document and, in a manner that a reasonable investor would consider fair and effective, respond to each complaint made to it about any services of the Filer or any representative of the Filer.

37. The Filer will require its current employees and prospective employees that meet the definition of "registered individual" or "permitted individual" in section 1.1 of National Instrument 33-109 -- Registration Information ("NI 33-109"):

(a) to complete an employee form that will cover substantially the same questions as set out in Form 33-109F4 Registration of Individuals and Review of Permitted Individuals to NI 33-109 ("Form 33-109F4"); and

(b) to consent to criminal record and other background checks and the collection of personal information in accordance with applicable privacy legislation. The consent form will note that the Filer may provide a copy of the completed employee form and the results of any criminal record or other background check to the Commission.

If requested by the Commission, the Filer will provide Commission staff with copies of any completed employee form and the results of any criminal record or other background check. The Filer will arrange for criminal record checks to be conducted on prospective employees at the time of initial application. Before hiring a prospective employee, the Filer will conduct the procedures set out in this paragraph with respect to such individual.

38. In the event the completed employee form, criminal record check or other background checks reveal a previous conviction for fraud or other criminal offences that are required to be disclosed under Form 33-109F4, securities violations or other similar improprieties, such employee will immediately be asked to resign from his or her position with the Filer or the Filer will not hire such prospective employee.

39. The Filer will not refer to itself as a marketplace, exchange, bourse, trading system or any derivation of these terms. In addition, the criteria for an issuer to access the Private Portal will not be referred to as "listing standards", the vetting process and acceptance to provide access for an issuer to the Private Portal will not be referred to as "listing" the issuer and the Issuer Agreement will not be referred to as a "listing agreement".

40. All advertising, marketing or related materials (the "Advertising") of the Filer will comply with applicable securities legislation. The Filer will ensure that any Advertising:

(a) does not contain promotional statements or material that cannot be reasonably supported or misrepresentations;

(b) contains only information that is presented in a fair and balanced manner;

(c) used to find or solicit potential investors, clearly and prominently states that only accredited investors may enter into an Investor Agreement and be granted access to the Private Portal;

(d) used to find or solicit potential issuers, clearly and prominently states that only social impact issuers and/or environmental impact issuers located in Ontario may enter into the Issuer Agreement and be granted access to the Private Portal; and

(e) is consistent with the risk disclosure described in paragraph 19 of the representations to this order.

41. To cover part of its costs for operating and maintaining the Platform, including for initial and ongoing due diligence to ensure that Private Portal participants are and remain accredited investors, or are and remain eligible issuers in Ontario, the Filer will charge access fees to issuers on a per offering basis. Investors will not be charged any fees.

42. To assist social impact issuers and/or environmental impact issuers in complying with their obligations under securities legislation, the Filer will prepare an informational brochure (or similar document) for issuers summarizing:

(a) securities legislation governing material posted on the Private Portal, including sections 38, 46 and 126.2 of the Act;

(b) the terms and conditions of the accredited investor exemption in NI 45-106 including requirements to file reports of trade;

(c) when information posted on the Private Portal would constitute an offering memorandum under section 130.1 of the Act and the effect of that section;

(d) requirements relating to the offering memorandum in Part 5 of OSC Rule 45-501 Ontario Prospectus and Registration Exemptions; and

(e) the guidance in section 1.3 of Companion Policy 31-103CP Registration Requirements, Exemptions and Ongoing Registrant Obligations on the circumstances in which an issuer may have to register as a dealer.

The brochure will contain a statement that such brochure is a general discussion of certain legal matters and should not be relied upon as legal advice and that each issuer will be responsible for ensuring its compliance with applicable securities legislation.

43. The written information, documents and materials (the "Supporting Documents") the Filer has provided for the purposes of review by staff of the Commission are accurate as at the date of this Decision, including Supporting Documents relating to:

(a) the structure, operation and administration of the Platform, including matters relating to information technology;

(b) the officers, directors, members and employees of the Filer, including:

(i) the qualifications, knowledge and experience of the officers, directors and employees of the Filer relating to social impact issuers and/or environmental impact issuers; and

(ii) the persons who will be responsible for legal and regulatory affairs and compliance; and

(c) the organization and affairs of the Filer, including the program model of the Filer and its existing and proposed plans for financing,

except to the extent the Supporting Documents have been otherwise modified or superseded by a statement contained in a subsequently delivered Supporting Document or a representation to this order.

Furthermore, the Filer will revise the text of the proposed website pages and online contracts and policies which it previously delivered to comply with the representations and conditions in this Decision.

Financial and Other Reporting

44. The Filer will provide annual audited financial statements to the Commission and will meet all other applicable financial reporting requirements and the working capital, insurance and audit requirements under Part 12 of NI 31-103.

45. The Filer will provide quarterly (within 30 days of the end of each quarter of its financial year) to the Commission a report on:

(a) the amounts raised through offerings on the Private Portal that were successfully completed within the quarter based on information received from issuers, on a per offering basis, including the name of the issuer, details on the type and amount of the offering, the industry of the issuer and the number of investors participating in each such offering;

(b) the names and types of issuers given access to the Private Portal and the types of offerings posted on the Private Portal;

(c) the names and types of issuers denied access to the Private Portal at the time of initial application and the reasons for denial of access;

(d) the names and types of issuers granted access to the Private Portal at the time of initial application that were subsequently removed from the Private Portal and the reasons for removal;

(e) the types of accredited investors (e.g. permitted clients and non-permitted clients, and the clause they are relying on in section 1.1 of NI 45-106 that qualifies them as an accredited investor) given access to the Private Portal;

(f) the nature of the assistance provided to the issuers in respect of their outreach initiatives, as set out in paragraph 11 of the representations to this order; and

(g) such other information as the Commission may reasonably request.

The Filer shall provide this information on a more frequent basis if requested by the Commission.

In addition, the Filer shall provide this information in the format (e.g. electronic, paper) requested by the Commission.

46. The Filer will have a mechanism to survey accredited investors and issuers given access to the Private Portal and will include survey questions requested by the Commission. The Filer will conduct any surveys when requested by the Commission and will provide the Commission with the survey results within the time period specified by the Commission, acting reasonably.

47. The Filer will submit the applicable anti-money laundering and anti-terrorism reporting described in CSA Staff Notice 31-317 Reporting Obligations Related to Terrorist Financing for Registrants, Exempt International Dealers, and Exempt International Advisers.

Recordkeeping and Access by the Commission

48. The Issuer Agreement and the Investor Agreement will require issuers and investors to consent to the information the Filer collects being disclosed to the Commission, as may be requested by the Commission from time to time. The Filer will comply with applicable privacy legislation and will have in place appropriate information technology systems and other systems to protect issuers' and investors' confidential information and privacy.

49. The Filer will maintain records that: (a) accurately record its activities and financial affairs; and (b) demonstrate the extent of the Filer's compliance with the applicable requirements of securities legislation.

50. The Filer will maintain: (a) a copy of all information submitted via the Private Portal by investors and issuers; and (b) information it is required to keep under applicable securities law, for at least seven years in a safe location and in a durable form.

51. The Filer will deliver to the Commission at such time or times as the Commission may require, any of the books, records and documents (including the information submitted via the Platform by investors and issuers) of the Filer.

52. Any person designated in writing by the Commission may: (a) enter the premises of the Filer during regular hours; and (b) inquire into and examine the books, records and documents (including the information submitted via the Platform by investors and issuers) of the Filer and make copies thereof.

53. For greater certainty, the Filer will remove any issuer from the Private Portal or prohibit any person from accessing the Private Portal at the request of the Commission.

Decision

The Decision Maker is satisfied that the Decision meets the test set out in the Legislation for the Decision Maker to make the Decision.

The Decision of the Decision Maker under the legislation is that the Exemption Sought is granted provided that:

1. Unless otherwise exempted by a further decision of the Decision Maker, the Filer complies with all of the registration requirements of an exempt market dealer under the Act and NI 31-103, subject to paragraph 2 below; and

2. The Filer is exempt from the know-your-client and suitability requirements in sections 13.2(2)(c) and 13.3 of NI 31-103 on the basis that the following terms and conditions will apply to investors that have access to the Private Portal:

(a) if the investor is a permitted client that has waived the know-your-client and suitability requirements of sections 13.2(2)(c) and 13.3 of NI 31-103 under sections 13.2(6) and 13.3(4) of NI 31-103, respectively, there will be no maximum amount that such an investor may subscribe for on the Private Portal;

(b) if the investor is either: (i) an accredited investor that is not a permitted client; or (ii) a permitted client that has not waived the know-your-client and suitability requirements of sections 13.2(2)(c) and 13.3 of NI 31-103:

(A) the investor shall be limited to investing a maximum of $25,000 in a single offering on the Private Portal in a calendar year and a maximum of $50,000 in total in all offerings on the Private Portal in a calendar year; or

(B) there will be no maximum amount that the accredited investor may subscribe for in a particular offering on the Private Portal if the investor provides the Filer with a letter from a registered dealer confirming that such dealer has fulfilled the know-your-client and suitability requirements of NI 31-103 with respect to that particular offering on the Private Portal and that the said offering is a suitable investment for the investor.

This Decision shall expire on the earlier of:

(a) two years after the date hereof; and

(b) 90 days after any material changes in the Filer's business, operations or capital.

This Decision may be amended by the Commission from time to time upon prior written notice to the Filer.