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The Ontario Securities Commission.Peter Power/The Globe and Mail

The Ontario Securities Commission is taking the next step toward helping make it easier for businesses to raise money using a crowd-funding model.

The regulator said Wednesday it is considering a crowd-funding prospectus exemption as part of its work to help make it easier for startups as well as small and medium-sized businesses to raise money.

Ordinarily, companies cannot distribute securities unless a prospectus detailing the business and the risks associated with the securities has been filed with the regulator.

Other exemptions being considered are a family, friends and business associates exemption, an offering memorandum exemption and a streamlined version of the existing rights offering exemption.

"The exempt market plays an important role in Ontario's capital markets, especially for startups and SMEs," commission chairman Howard Wetston said in a statement Wednesday.

"It is important as a securities regulator that our continued work in this area promotes an exempt market that is innovative and globally competitive and that facilitates capital raising while protecting investors."

The Ontario Securities Commission published a consultation paper last year discussing new capital raising prospectus exemptions.