On July 29, 2015, the Nova Scotia Securities Commission (NSSC) published Blanket Order 51-508 Exemptions from Multilateral Instrument 51-105 Issuers Quoted on the U.S. Over-the-Counter Markets (Nova Scotia Blanket Order 51-508).

As we've previously discussed MI 51-105 can subject issuers who carry out certain types of investment activities in certain provinces to Canadian public company-type obligations. Adopted by every province other than Ontario, MI 51-105 is intended to discourage the manufacture and sale of OTC-quoted shell companies that can be used to facilitate abusive market practices.

In response to the concern that MI 51-105 would have  an unintended and overreaching impact, regulators in almost all Canadian jurisdictions that adopted MI 51-105 have issued blanket orders to exempt certain issuers from the application of the instrument.

Notably, Nova Scotia Blanket Order 51-508 provides that section 3 of MI 51-105 does not apply if a prospectus exempt distribution by an OTC issuer is restricted to permitted clients only and any promotional activities in or from Nova Scotia in respect of the distribution are directed only at permitted clients. Nova Scotia Blanket Order 51-508 revokes a previous blanket order issued by the NSSC (Blanket Order 51-506) and is consistent with similar blanket orders adopted in other provinces.

The New Brunswick Financial and Consumer Services Commission published similar blanket order (New Brunswick Blanket Order 51-506) on August 31, 2015.