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On November 27, 2025, the Canadian Securities Administrators ("CSA") released CSA Multilateral Staff Notice 31-367 – Notice and Consultation Regarding CSA Coordinated Blanket Order 31-930 Exemption to Allow Exempt Market Dealer Participation in Selling Groups in Offerings of Securities Under a Prospectus ("Staff Notice 31-367"), announcing that the coordinated blanket order that granted temporary exemption from the restrictions on exempt market dealers ("EMDs") from participating in selling groups in prospectus offerings (the "Blanket Order") will not be extended.
The Blanket Order was announced on June 20, 2024, and is set to expire on December 20, 2025. The Blanket Order aimed to encourage continuous and ongoing support of issuers by allowing EMDs to participate in prospectus offerings, subject to certain conditions, where they would otherwise not be permitted to do so. For more information on the Blanket Order, please see our bulletin here: Being Part of the Group – EMDs Permitted to Sell in Prospectus Offerings – McMillan LLP.
The CSA reported that, as of October 20, 2025, only three EMDs filed the required forms to participate in prospectus offerings pursuant to the Blanket Order. Of those three EMDs, two participated in two prospectus offerings, each.
The CSA sought stakeholder feedback on the Blanket Order regarding whether a new exemption should be established to allow EMDs to participate in selling groups in prospectus offerings given the lack of participation under the current Blanket Order. The CSA reported the following feedback on the Blanket Order:
- Stakeholders reported concerns that the restriction on compensation under the Blanket Order may have reduced the incentive for EMDs as EMDs may expect to earn more compensation by distributing securities or from a referral arrangement.1
- EMDs cannot participate in electronic settlement and are not permitted to enter into carrying broker arrangements with investment dealers. As a result, to facilitate the use of the Blanket Order by EMDs, the issuer must be willing to provide paper certificates, increasing the costs and complexity of the transaction.
- EMDs would not be allowed to subsequently advise clients on the securities purchased except in certain prescribed circumstances. They also cannot establish an omnibus account with an investment dealer and trade listed securities on behalf of their client as such trading is not permitted for EMDs under securities law.
- Certain stakeholders noted that there may have been limited awareness or understanding of the Blanket Order among issuers and investment dealers.
The CSA posed a series of questions as a result of the above feedback to better understand the limited participation under the Blanket Order and will consider the comments provided in response when determining whether a new blanket order or exemptive relief should be granted. Comments and submissions under this consultation period can be provided until January 26, 2026.
Footnote
1. The Blanket Order required, among other conditions, that compensation paid to the EMD not exceed 50% of the lowest total compensation paid or payable to any selling group member that is an investment dealer.
The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.
© McMillan LLP 2025
