Securities regulators in Ontario, Alberta, British Columbia, Quebec, New Brunswick, Nova Scotia and Saskatchewan have clarified that they do not intend to extend a previously announced time-limited exemption aimed at supporting capital raising, which expires on Dec. 20.
The securities regulators in these provinces released a Canadian Securities Administrators (CSA) staff notice to update market participants on its plan to discontinue the multilateral initiative to extend the role of exempt market dealers to assist with capital raising.
The CSA previously announced the time-limited exemption in “CSA Notice Regarding Coordinated Blanket Order 31-930 Exemption to Allow Exempt Market Dealer Participation in Selling Groups in Offerings of Securities Under a Prospectus.”
Introduced in late June 2024, the exemption allowed exempt market dealers to help start-ups and small- to medium-sized enterprises participate in selling groups in prospectus offerings, thereby raising capital as they grow and mature.
In a news release, the CSA noted the limited use of the exemption. Thus, in the recently published multilateral staff notice, the securities regulators opened a 60-day comment period, closing on Jan. 26, 2026.
The CSA invited those interested to give feedback, which will help the securities regulators formulate policies and weigh in on whether they should publish a revised exemption in the future.
Questions for input
The multilateral staff notice listed the following points of interest, among others, for those intending to provide comments:
- Are there any significant factors not identified in the staff notice that contributed to the limited use of the blanket order?
- Should securities regulators limit the compensation provided to exempt market dealers participating as members of selling groups in prospectus offerings? Why or why not?
- If such compensation should be limited, how should the regulators establish the limit?
- Can mechanisms other than compensation limits serve a similar role?
- To what extent does an exempt market dealer’s inability to access electronic settlement impact an issuer’s or underwriter’s decision to include an exempt market dealer in a selling group of a prospectus offering?
- To what extent does an exempt market dealer’s inability to subsequently advise clients on the purchased securities impact an exempt market dealer’s decision to participate in selling groups for prospectus offerings?
- Is there any confusion regarding how issuers and investment dealers may involve exempt market dealers in selling groups in prospectus offerings?
- Do other factors affect an issuer’s or an investment dealer’s decision to include exempt market dealers in a selling group of a prospectus offering?