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Global rules on foreign direct investment (FDI)
Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
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Canada | Publication | June 26, 2024
On June 20, securities regulatory authorities in each of Alberta, British Columbia, Nova Scotia, Ontario, Quebec and Saskatchewan (the participating jurisdictions) issued temporary local blanket orders that allow exempt market dealers (EMDs) to participate in prospectus offerings subject to the restrictions set out below (the Blanket Orders). A similar blanket order is anticipated shortly in New Brunswick.
Prior to implementation of the Blanket Orders, which are substantially similar in each participating jurisdiction, EMDs were restricted to acting as dealers only where a distribution was made pursuant to an exemption from the prospectus requirement contained in the relevant securities legislation and in certain other limited circumstances. EMDs were not permitted to participate in a prospectus offering.
The Blanket Orders follow the January 2021 recommendation of the Capital Markets Modernization Taskforce to the Ontario government to amend Ontario securities laws to allow EMDs to participate as members of a selling group in prospectus offerings. The recommendation recognized the need for additional sources of finance for smaller and mid-size issuers in order to foster competitive capital markets.
Recognizing that the EMD registration category is subject to less stringent requirements than the investment dealer registration category, the Blanket Orders impose the following restrictions on an EMD’s participation in a prospectus offering:
The Blanket Orders will remain in effect until December 20, 2025, unless extended by the participating jurisdictions.
The CSA Notice regarding the coordinated Blanket Orders is available here. The following are links to the relevant orders of each of the participating jurisdictions:
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