After a regulatory experiment with an exemption that was intended to help exempt market dealers (EMDs) participate in certain capital-raising efforts flopped, securities regulators are looking for input on what went wrong, and how to improve in the future.
In mid-2024, the four big provincial regulators (Alberta, British Columbia, Ontario and Quebec), along with New Brunswick, Nova Scotia and Saskatchewan, introduced a temporary exemption that was intended to allow EMDs to join prospectus offerings that would otherwise be limited to investment dealers.
The exemption, which is set to expire on Dec. 20, was designed to enable EMDs to participate in efforts to raise capital for growing companies, as part of a broader imperative among the regulators to support capital formation and expand investment opportunities.
However, in a notice published Thursday, the regulators report that, so far, only two dealers have taken advantage of the temporary exemption. Now, they’re seeking feedback on why the uptake was so limited and how to design a more effective exemption.
The issues raised in the notice include whether restrictions on EMD compensation discouraged use of the exemption, and whether the firms’ lack of access to electronic settlement and their inability to provide follow-on advice to investors were impediments. It also questions whether dealers were aware of the temporary exemption.
The deadline for providing input on these issues is Jan. 26, 2026.
“Feedback provided will be used to assist in future policymaking and to consider whether a revised exemption should be published,” the Canadian Securities Administrators said.