The Ontario Securities Commission (the OSC) through its Innovation Office, will provide exemptive relief (the exemption) to Franctionvest Inc. (Franctionvest), an Ontario corporation from the requirement to register under Ontario securities legislation to conduct a short-term pilot of its business model.
The exemption temporarily relieves Fractionvest from the requirement to register as a dealer under Section 25 of The Securities Act (Ontario), in respect of the operation of the Platform and other activities in connection with the Pilot Test. The exemption expires on the earlier date which is 18 months after the date of the decision, or the date on which the Filer becomes registered.
Fractionvest seeks to test a platform that uses blockchain technology to distribute tokens that represent a fractional ownership in a real estate asset. The exemption that will allow the pilot test to go forward comes with certain conditions imposed by the OSC. These include: The pilot test will involve a single property located in the Greater Toronto Area and will only be available to no more than 100 accredited investors that complete Fractionvest’s onboarding process. The property will be owned by a limited partnership under the laws of Ontario, where the token holders will participate as limited partners, with the value of the tokens acquired by each investor not to exceed $150,000. Fractionvest plans to rent the property; the token holders will receive regular distributions of rental income less expenses. Franctionvest has also agreed it must submit a registration application nine months after the date of the decision.
The decision in its entirety can be download from the website of the Ontario Securities Comission.
For more information, please call Barbara Hendrickson at BAX Securities Law (416) 601-1004.
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