The prospects are excellent that equity-based crowdfunding will soon be allowed in Nova Scotia and New Brunswick, but first securities regulators are looking for feedback on new rules for the online fundraising.

The Nova Scotia Securities Commission and New Brunswick’s Financial and Consumer Services Commission have joined with their counterparts in Saskatchewan, Manitoba and Quebec to produce a set of proposals that would let companies raise money through crowdfunding. The Ontario Securities Commission is working on a similar paper.

Crowdfunding, or raising money by seeking small contributions online from a huge pool of people, is now legal as long as it’s being used to raise money for a charity or for an advanced sale of a product.

However, Canadian securities regulators so far have not allowed companies to raise equity funding through crowdfunding because of worries about investors getting scammed.

 “Our main focus is investor protection,” said Tanya Wiltshire, a spokeswoman for the Nova Scotia Securities Commission. “We’re trying to make sure that people are protected and find a way that this can go forward without undue risks.”

Now the five provinces have come up with proposals that would allow equity-based crowdfunding on approved web portals in certain circumstances.

Each of the five provincial regulators is seeking consultation with the public until June 18, after which they will examine how to proceed individually depending on the feedback they receive. Both the New Brunswick and Nova Scotia commissions are looking for written submissions.

Under the proposals being studied by regulators, established companies could raise as much as $1.5 million in a single campaign and draw no more than $2,500 from each individual investor. The proposal calls for special rules for startups, which would be allowed to raise as much as $150,000 per campaign through individual investments of as much as $1,500.

The proposals lay out rules for portals, issuers and investors, all with the goal that investors will have enough information to make informed decisions.

“Whether through crowdfunding or more traditional methods of raising capital, being an informed investor remains important,” said Jeff Harriman, the capital markets specialist at New Brunswick’s Financial and Consumer Services Commission.

“Companies intending to use crowdfunding will still be required to provide information so that the investor can make an informed decision.”

People familiar with the matter believe this process will result in equity-based crowdfunding being allowed in these provinces in 2015 or 2016. The startup segment of the proposal is based on rules already in effect in Saskatchewan, meaning they have been proven to work effectively.

In theory, Canadian startups would gain a competitive advantage. Regulators in the U.S., for example, still haven’t allowed crowdfunding two-and-a-half years after they were authorized to do so by Congress and the president.

However, the practical question is how many companies will benefit from a program that will produce $150,000 in funding and leave them with hundreds of shareholders. Many expect the proposals in their current form will help but not revolutionize fundraising.

The Nova Scotia commission is now working on a series of consultation sessions in Kentville, Pictou County, Halifax and Dartmouth in the first week of June. The details will be posted in May on the commission’s website, nssc.gov.ns.ca.