FAIR Canada raised significant concerns with the CSA proposal that would allow exempt market dealers (EMDs) to participate in selling groups for prospectus offerings. EMDs do not help mitigate underwriting risk, cannot provide the same level of support to issuers as investment dealers, and are not able to provide ongoing advice to investors, leading to inconsistent treatment.
FAIR Canada is also concerned with the fact that the CSA previously considered amending National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations to permit this activity, but ultimately decided against it. Using a blanket order to make this change now not only contradicts the CSA’s earlier decision, but it’s also not the right tool for such a major policy shift.
Read the full comment letter here.