Ontario Releases Guidelines for P2P Lending

Peer to peer lending has been increasing rapidly in many parts of the world, such as the UK, USA and China, where the market is booming. However, in some other areas the development of P2P lending has been slower, for example in Canada.

Many factors could contribute to why Canada’s P2P market has a slower growth than other countries, but certainly the lack of clear guidance in provinces like Ontario, has played a role. In fact, the existing Canadian P2P marketplaces have been very cautious in their operations, most of them making sure to comply to the existing securities laws. And they did well, given that the Ontario Securities Commission (OSC) has recently released a guiding statement warning P2P operators that they may be subject to securities laws, depending on their business model.

In particular, ordinary loans are not considered securities, but they might be depending how they are provided, for example bonds, debentures and other “investment contracts”. In this case, the companies has to comply to the existing relevant securities laws and the Ontario Securities Commission also suggested to check with them whether they need to register as investment adviser or dealer.

All in all Ontario Securities Commission has not made it easier for peer-to-peer lending to establish in the province, but at least operators now know what they have to do: get in touch with OSC and check with them if they are doing everything alright.

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About the author - Irene Tordera

Born and raised in Milan, Italy, Irene is an International Business graduate, with a strong interest for innovative ideas that can simplify our lives.
During her studies, she co-founded an online community for sportspeople and worked in marketing positions at Ogilvy & Mather Advertising and at the European Business Angel Network, in Brussels. She is a passionate blogger about crowdfunding and the startup ecosystem.