31. Create an Ontario Regulatory Sandbox in order to benefit entrepreneurs and start-ups. In the longer-term, consider developing a Canadian Super Sandbox

Globally, regulatory sandboxes have allowed businesses to test new and innovative products, services, business models and delivery mechanisms in the real market, with real consumers with expedited blanket relief orders.


To spur the growth of innovative companies, the Taskforce proposes the creation of an Ontario Regulatory Sandbox that would have an expanded scope to include new and existing innovative start-ups operating across the financial services sector in Ontario. Firms would be allowed to test innovative products and business models with a light regulatory touch.

The Ontario Regulatory Sandbox would be undertaken jointly by the OSC LaunchPad and the FSRA. There are several entrepreneurial models that are subject to regulatory oversight that overlaps between the OSC and FSRA. In the longer-term, the Taskforce proposes an expansion of this Sandbox into a Canadian Super Sandbox in which all provincial and federal financial services regulators allow Canadian financial services businesses to test their innovative ideas. This would spur innovation nationally.

Would the creation of an Ontario Regulatory Sandbox and a Canadian Super Sandbox help spur innovative start-ups and entrepreneurs to grow and raise capital? If so, other than expedited blanket relief orders, what other services/regulatory relief can these sandboxes offer to help businesses raise capital and apply lighter touch regulation to allow these businesses to innovate? What are other ways that the OSC can help foster innovation? What sort of cultural changes would be required at the OSC in order to develop a flexible approach to regulation to foster economic growth and innovation?

32. Requirement for market participants to provide open data

Advancements in technology have not only assisted businesses to operate more efficiently and seek new and innovative business models, but also have enabled the distribution, collection and sharing of data globally and instantaneously.

Open data is defined as structured data that is machine-readable, freely shared, used and built on. Data governance standards are required to maintain integrity and confidentiality of data. One of the primary benefits of open data is its support and alignment with fostering innovation and building technology solutions. Many financial technology (FinTech) solutions require open data to create efficiencies and offer better technology solutions for business and services to its customers/investors.


Other global jurisdictions, including the U.K. and E.U., mandate open data to increase competition and promote alternatives to consumers giving them choice, while other jurisdictions, such as Japan, India and Singapore, have promoted data sharing arrangements. The Taskforce proposes that the OSC mandate that capital market participants provide open data so that data sharing arrangements can be further encouraged and facilitate more FinTech solutions for businesses (thereby reducing costs and minimizing duplication of processes) and investors. Greater accessibility to data would assist businesses in providing new products/services and long-term solutions to support innovative business models, but it must be done while ensuring investor protection and privacy of investors are not compromised.

Do market participants view open data as an opportunity to innovate and improve business operations? Please identify any concerns or challenges that may arise from this proposal and any corresponding solutions. Do you see a role for the province in setting data protection and privacy standards?

33. Allow for greater access to capital for start-ups and entrepreneurs

The COVID-19 pandemic has reiterated the importance of capital formation for start-ups and entrepreneurs in ensuring a sustainable economy.

Formal angel investor “groups” or “networks” may be viewed as “investment clubs” for accredited investors. They attract quality earlier-stage issuers for investment consideration, professionalize and share due diligence, share domain knowledge and expertise in particular industries and assist in reducing the cost of capital of a transaction. Angel investor groups generally seek to invest in a diversified portfolio of start-up businesses, where smaller investments are made by many investors across many issuers, thereby helping to diversify the risk.

Angel investors are not clients of their angel groups, as they make their decisions on an independent basis, and they provide scarce early-stage funding and mentorship to entrepreneurs. Certain angel groups seek to be structured to earn a fee from working with their members to collaboratively finance these start-ups, and may, in certain circumstances, trigger registration under traditional concept of registration.


The Taskforce proposes modernizing the rules so that this early-stage financing of start-ups can be undertaken by angel groups to assist with capital formation. The Taskforce proposes changes to the current registration requirements to enable angel groups to work with their “accredited investor” members to encourage investments in early stage issuers.

Please provide feedback on the proposed approach and outline any challenges and concerns that may arise from this proposal. Should this apply to only not-for-profit angel groups? Should changes in registration requirements be by way of regulatory relief (exemption), exemptive relief or through a form of no-action letter (as discussed elsewhere in this consultation report) when meeting specific requirements? How can P2P lending frameworks be leveraged to support capital raising of such early-stage start-up businesses?