PCMA Supports the New Initiative to Allow EMDs to Participate in Prospectus Offerings
June 21 2024 - 5:29PM
The Private Capital Markets Association of Canada
(
PCMA) supports the initiative announced yesterday
by six provincial securities regulators to allow exempt market
dealers (
EMDs) to participate as selling group
members in prospectus offerings. This initiative supports the
capital-raising efforts for early-stage and growing businesses
across Canada.
The Ontario Securities Commission (OSC),
Autorité des marchés financiers (AMF), B.C.
Securities Commission (BCSC), Financial and
Consumer Affairs Authority of Saskatchewan (FCAA),
Alberta Securities Commission (ASC), and Nova
Scotia Securities Commission (NSSC) have jointly
introduced this time-limited exemption, effective until December
20, 2025 (collectively, the Blanket Orders). This
action underscores the applicable CSA members’ recognition of the
vital role EMDs play in fostering the growth of Canadian
businesses.
“This is a welcome development for the Canadian capital
markets,” said Brian Koscak, PCMA Vice Chair and Chair of the
PCMA’s Advocacy Committee. “We are particularly pleased to see EMDs
regain the right to participate in prospectus offerings. This
restoration of EMD participation rights, previously rescinded in
2017, highlights the regulators’ recognition of EMDs’ ongoing role
in supporting capital formation.”
The PCMA particularly commends the following aspects of the
initiative:
- Continuity of Relationships: EMDs can maintain
their relationships with issuers as they transition from private to
public capital raises.
- Expanded Capital-Raising Opportunities: This
change provides growing businesses with more options for raising
capital, potentially accelerating their growth and success.
- Support for Economic Growth: By enabling EMDs
to participate more fully in the capital raising process, this
initiative has the potential to drive economic growth and job
creation across Canada.
While the PCMA supports the Blanket Orders, it looks forward to
observing how the 50% compensation cap for EMDs will impact their
participation. The Blanket Orders state that the total compensation
to EMDs cannot exceed 50% of the lowest total compensation paid or
payable to any selling group member who is an investment
dealer.
PCMA Chair David Gilkes commented, “We look forward to ongoing
discussions with CSA and PCMA members to help maximize the benefits
of these Blanket Orders for all capital market stakeholders.”
The PCMA encourages its members to familiarize themselves with
the conditions outlined in the Blanket Orders and develop new
relationships with Canadian investment dealers to take full
advantage of this new opportunity to support Canadian
businesses.
**About the Private Capital Markets Association of
Canada**
The PCMA is a not-for-profit association founded in 2002 as the
national voice of the exempt market dealers, issuers and industry
professionals in the private capital markets across Canada.
The PCMA plays a critical role in the private capital markets
by: assisting hundreds of dealers and issuer member firms and
individual dealing representatives to understand and implement
their regulatory responsibilities; providing high-quality and
in-depth educational opportunities to the private capital markets
professionals; encouraging the highest standards of business
conduct amongst its membership across Canada; increasing public and
industry awareness of private capital markets in Canada; being the
voice of the private capital markets to securities regulators,
government agencies and other industry associations and public
capital markets; providing valuable services and cost-saving
opportunities to its member firms and individual dealing
representatives; and connecting its members across Canada for
business and professional networking.
**For media inquiries, please contact:**Brian
KoscakPCMA Vice-Chair and Chair of PCMA Advocacy Committee
PCMA Office Address: Suite 5700, First Canadian
Place 100 King Street West, Toronto, ON, M5X 1C7info@pcmacanada.com
1-877-363-3632