On Jan. 24, a group of business, financial, and legal experts will convene in rural New Brunswick to discuss what the province can and should do to allow companies to raise equity through crowdfunding.

This meeting, led by Nancy Mathis, the executive director at the Wallace McCain Institute for Business Leadership, is noteworthy because New Brunswick in the past three months has been at the cutting edge of the national discussion on crowdfunding. Though the New Brunswick Securities Commission (NBSC) has not yet committed to attending the meeting, it does have a keen interest in the recommendations that come out of the meeting. “From the beginning, we wanted to make sure the New Brunswick investment community . . . was aware of the issues around crowdfunding,” says David Barry, the chair and CEO of NBSC. “There’s been a lot of hype around the issue, but we want people to understand the regulatory issues.”

Crowdfunding is a new form of financing in which companies (or charities and other undertakings) solicit funding through a web portal, so a large number of individuals kick in money to fund a company. The practice is quite simple and could in theory help meeting the pressing demand for capital in young companies. However, regulators are charged with protecting investors, and must make sure that individuals aren’t swindled through bogus crowdfunding schemes.

Charities, artists, and athletes often use the practice, crowdfunding by companies to raise equity is now not allowed in Canada or the U.S. However last year, the American government last year passed the Jumpstart Our Business Startups Act (also know as the JOBS Act), which would allow a form of crowdfunding. Now the Securities and Exchange Commission is studying how the law could be implemented.

Still the international fascination with crowdfunding is profound, and the NBSC understood that it should move quickly to educate itself and the broader community on the matter. When it held its Fullsail conference last November, it chose crowdfunding as the topic for discussion. It was the first time a provincial securities commission had held a public consultation on the matter, and it was livestreamed over the web and followed by securities regulators across the country. Many questions asked during the discussions were emailed in by regulators in other provinces monitoring the discussion online.

In Mid-December, several provincial commissions including New Brunswick released changes to their securities rules so that companies could raise up to $500,000 in total and up to $2,000 per 12-month period from each investor using an offering memorandum (OM) without providing audited financial statements. (The rules had previously allowed the use of an OM only with audited financial statements.)

That brought regulations in most provinces closer to what would be needed to allow crowdfunding. However, Barry warns that regulations can’t change immediately because such changes require a lengthy consultation process. He adds the commission will be interested in the recommendations of Mathis’ group, which hopes to craft a “made-in-New-Brunswick” solution that can be rolled out quickly.

“The goal of the meeting, in my view, is to discuss and develop a workable and practical equity crowdfunding model from a business perspective,” says Norman Betts, the former New Brunswick finance minister, who plans to attend the meeting. “Secondly, we will identify what regulatory issues have to be addressed for the model to work. Recent progressive changes by the NBSC have laid the initial, and perhaps final, framework for crowdfunding initiatives to be a New Brunswick reality in the near term.”

It’s also expected that all Canadian provinces will bring a similar regulatory structure across the country once it is allowed, and they may restrict it to Canadian issuers tapping Canadian investors through a Canadian portal. But now, there is no Canadian crowdfunding site for companies.

What this means is that there is an opportunity out there for someone to launch such a site, and there’s nothing to prevent an Atlantic Canadian from doing it. “It would be a business opportunity,” says Barry. “And, it would be up to them whether they wanted to take advantage of that opportunity.”